DJN: DJ MARKET TALK: Trader Doesn't See Bounce In June S&Ps
Edited by Thomas Granahan
Of DOW JONES NEWSWIRES
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2:40 (Dow Jones) June S&Ps are likely to be weaker throughout the afternoon
and could see a retest of the session low. Floor trader says market is
consolidating before another leg lower. "We are just marking time. The highs
are in for the day," he says. (DMC)
2:32 (Dow Jones) We've mentioned in the past how many of the biggest one-day
percentage gains on Nasdaq have come within the last year, as the Composite
was plunging - nine of the 10 largest have occurred since last March, as
have 16 of the biggest 20. But in six of those top 10 instances, the 10-day
return has been negative, according to research from Lehman's Jeff deGraaf
(the jury is still out on yesterday.) (TG)
2:20 (Dow Jones) Saying today's jobs report "confirms my concerns about a
spreading and deepening of the economic slowdown," Rep. Saxton, the incoming
Joint Economic Committee chairman, declares that speedy Fed action to cut
rates "is imperative." (JC)
2:08 (Dow Jones) Gee, all it takes is a possible recession, several telecom
warnings and one little bankruptcy filing to undo all the good done by Dell
announcing it may indeed meet the 1Q estimates it had already lowered?
Seriously folks, what further proof do you need that the last session's
rally was overdone - and that momentum still pushes the market too far in
either direction once it gets going? DJIA off 155 at 9761, Nasdaq falls 44
to 1741, and S&P 500 drops 22 to 1129. (GC)
1:52 (Dow Jones) At a time when some investors think volatility is shifting
from tech stocks to the non-tech sectors, the CBOE's tech sentiment gauge is
flirting with new highs. The CBOE's Nasdaq Volatility Index, or VXN, reached
80.46 Friday morning - the highest level since VXN was introduced Jan. 23
(the CBOE extrapolates VXN data back to 1995, during which VXN had exceeded
80 before, most notably last April and last December). Most recently VXN is
at 79.35, up 3.06. (KXT)
1:49 (Dow Jones) Contending that "the U.S. is in a recession today" that
"was made in Washington and must be fixed in Washington," GKST Economist
Brian Wesbury says: "The longer the Fed waits to cut rates, the worse it
will be for stocks and the economy. The quicker it cuts rates, the sooner
things will recover." (JC)
1:43 (Dow Jones) There's no question Fed needs to do "at least 50 BP,
possibly 75 BP" rate cut, but other economic data showing some signs of
stabilization could sway Fed from doing inter-meeting move and instead do 75
BP at May meeting, says Banc One head of research, Dana Johnson. (SPC)
1:39 (Dow Jones) Volatility associated with Bank of America's (BAC) options
escalated Friday, noted paul Foster, 1010WallStreet.com's option strategist.
This indicates investors expect the stock to be volatile as many worry about
its loan exposure to Pacific Gas & Electric, the troubled California utility
and unit of PG&E Corp. (PCG) that filed for bankruptcy. With BankAmerica
down $2.45 to $49.40, the implied volatility of the April 45 puts jumped
from about 46% Thursday to about 75% most recently. (KXT)
1:27 (Dow Jones) Motorola (MOT) down 20% to new lows on heavy trading amid
concerns about its FY01 outlook when it reports 1Q Tuesday. CSFB warns that
because of "continued weakness in the company's key businesses" its expects
the consensus FY EPS target to be sharply reduced. CSFB says "worst case"
scenario is breakeven EPS for year on revenue of $34B-$34.5B. The current
First Call estimates are EPS of 14c on revenue of $36.9B. (MLP)
1:22 (Dow Jones) Here's a study the Market Talk staff would have liked to be
a part of. Deutsche Banc surveyed 130 bars and 1,300 beer taps in Manhattan
to gauge which brewer dominates the lucrative tap business. The winner? The
self-proclaimed "King Of Beers," Anheuser-Busch (BUD), concludes beverage
analyst Marc Greenberg. A-B's Budweiser and Bud Light brands, the survey
says, lead all other domestic brands with 50% tap penetration. Coors Light
has 18% and Miller Lite has 7%. Why is all this important? More than
one-fourth of total beer sales and 46% of retail profits come from such
"on-premise" channels. (CEG)
1:17 (Dow Jones) Thursday's announcement of vendor financing valued at $25M
to California competitive telecom carrier Pac-West (PACW) is "a validation
of the company's business model," says UBS Warburg analyst Glenn Waldorf.
But uncertainty surrounding the policy of reciprocal compensation to
start-up carriers will pressure the stock, he adds. Waldorf rates Pac-West
at hold. (CBN)
1:10 (Dow Jones) Implied volatility associated with Motorola (MOT) spiked
Friday - a sign investors expect a big move. The company will report
earnings next Tuesday and at least one analyst had said he expected Motorola
to miss reduced estimates. Volatility associated with the at-the-money April
12.50 puts jumped to 100% from about 67% Thursday. (KXT)
1:07 (Dow Jones) June S&Ps continue to come off of lows. "We really
recovered fast," one floor trader says. "You can see people wanted to bid it
up." June S&Ps still sharply lower, but only a few points from where they
were trading prior to the PG&E news. (DMC)
1:00 (Dow Jones) Greenspan, delivering a speech at a conference organized by
the Fed, avoids any discussion of what steps the central bank might take in
the next few months to keep the economy out of a recession. He confines his
remarks to the need for better financial education in an increasingly
high-tech economy. (FL)
12:57 (Dow Jones) Record outflows from U.S. stock funds are expected for
March. After getting by February with a modest net inflow of $1.3 billion,
such funds are likely to face hefty outflows, which TrimTabs.com estimates
as $22.1 billion and Merrill Lynch sees as in "the low teens." "It appears
that investors have started to finally give up on this battered market,"
Merrill analyst John Lloyd says. (YXH)
12:49 (Dow Jones) June S&Ps fell to limit down level of 1128.00, 27 points
lower, putting a 10-minute trading curb in effect. Market moved to limit
down as PG&E's Pacific Gas unit said it filed for bankruptcy. (DMC)
12:46 (Dow Jones) Stocks bouncing back slightly after setting new lows
around the time that Pacific Gas & Electric's Chapter 11 news broke.
Nonetheless, the mood is still quite different from Thursday. Every DJIA
component but Johnson & Johnson, Philip Morris and Wal-Mart is in the red.
DJIA losing 159 at 9758, and Nasdaq Composite off 53 at 1731. (GS)
12:40 (Dow Jones) PG&E's beleagured Pacific Gas unit files for Chapter 11 in
California. The company said it is taking this action in light of its
unreimbursed energy costs, which are now increasing by more than $300
million per month, "continuing CPUC decisions that economically disadvantage
the company, and the now unmistakable fact that negotiations with Governor
Gray Davis and his representatives are going nowhere." PG&E remains halted
on the NYSE. (GS)
(END) DOW JONES NEWS 04-06-01
02:42 PM |
