Consumer Sentiment Weakest Since 1993
Edited by Ray Hennessey
Of DOW JONES NEWSWIRES
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10:11 (Dow Jones) The 87.8 mid-April Michigan sentiment reading is the
lowest since 1993, one economist notes, adding that weakness spread to
current conditions, which had been holding up better than expectations. (BB)
10:07 (Dow Jones) Wal-Mart's (WMT) anouncement at the bottom of its March
sales report that its 1Q earnings "may come in below our original estimate
of $0.32 but will be up slightly from the prior year's 1Q of $0.30 a share"
is a bad sign for the retail sector, says Emme Kozloff, an analyst at
Sanford C. Bernstein & Co. Wal-Mart is the most powerful merchandise buyer
in the country, and "if Wal-Mart is experiencing margin pressure, the rest
of the sector has got to be experiencing the same pain." (JMC)
10:05 (Dow Jones) With the air out of the Internet bubble, Geocapital
Partners has decided to take a breather. The Fort Lee, N.J., venture-capital
firm pulled the plug on its latest fund-raising effort in December,
returning $200 million in committed capital to investors, because of the
tough climate for investing in start-ups. A new round of fundraising isn't
likely until the fourth quarter "at the earliest," says Steve Clearman,
managing general partner and co-founder of Geocapital. (JAW)
10:00 (Dow Jones) The good news is that Research In Motion (RIMM) "blew away
our best-case revenue estimates" in its fiscal fourth-quarter, Merrill Lynch
says. The bad news is that the company is saying the next two quarters will
see revenue at the low end of expectations. Research In Motion is likely to
stay in a $20 to $30 trading range until the economy improves, the firm
says. (RJH)
9:54 (Dow Jones) Amid a slew of dismal March sales figures coming from
specialty retailers this morning, the only major bright spot is American
Eagle Outfitters (AEOS), whose same-store sales rose 5.3%, says Eliot
Laurence, an analyst at Jefferies & Co. The company beat most analysts'
expectations of a flat or low-single digit improvement because its lines of
casual teen sportswear "are hot right now, and they've won customer
mindshare." But like its competitors, American Eagle is facing a slower
economy, and "they still have to execute" with strong clothing assortments,
Laurence adds. (JMC)
9:47 (Dow Jones) Blackrock (BLK) reported first quarter diluted earnings of
39 cents, beating the street forecast of 38 cents and up sharply from 30
cents a year earlier. This, however, is no indication for 1Q earnings of
other asset managers. Blackrock, along with Federated Investors and John
Nuveen, benefited from the shift of investor money into fixed income from
the sinking stock market. Separately, Blackrock chairman Laurence Fink said
on a conference call the firm is eager to acquire an equity manager to
expand its equity platform. (YXH)
9:40 (Dow Jones) June S&Ps are likely to stay weaker, but floor traders do
not rule out an attempt to work back to unchanged. Market action might
consist of positioning ahead of the 3-day weekend. "People might not mind
holding a position overnight, but over a couple of days is a different
story," one trader says. Profit taking after recent gains possible, too.
(DMC)
9:36 (Dow Jones) Retail sales in March, in an early evaluation, are at least
as bad as expected, if not worse. Apparel stores such as Gap (GPS), Kohl's
(KSS) and Limited (LTD) reported March same-store sales well below
expectations. Department store giants Sears (S) and Federated Department
(FD) also reported sales below expectations. In addition, Sears warned about
its 1Q. Discount stores, such as Wal-Mart (WMT), K-Mart (KM) and Target
(TGT), held up the best, but that should be expected during an economic
slowdown. Other bright spots included J.C. Penney (JCP), May Department
Stores (MAY) and the overall lack of first quarter warnings, possibly
indicating that retailers are hopeful for a late turnaround. (GS)
9:29 (Dow Jones) Juniper Networks (JNPR) shows Thursday it's human, too.
This fast-growing network equipment maker used to think nothing of beating
analysts' earnings estimates by 8 cents a share or so. But for 1Q, it
matched the consensus and actually slightly fell short of the revenue view,
revealing its exposure to the telecom capex slowdown that has hit other
networking firms. And Juniper's outlook for 2Q and 2001 is slightly lower
than analysts' estimates. "We must also operate within the reality that
there's no immunity to short-term fluctuations," CEO Scott Kriens says
during conference call. (PDL)
9:24 (Dow Jones) Concerns that the current slowdown is akin to the
stagnation of the 1980s are "premature or misplaced," says Merrill Lynch
investment guru Christine Callies. Back then, capital spending was
"unusually depressed" for 10 years because of the dollar's rise, the
downsizing of the manufacturing sector, two credit crunches, and strong
competition from Japan semi companies. (RJH)
9:18 (Dow Jones) After reviewing its most recent annual report, Salomon
Smith Barney analysts remain concerned about Conseco's (CNC) financial
condition. Analyst Colin Devine said, "From a bottom-line perspective, we
continue to regard its overall financial condition and earnings outlook,
despite repeated management 'turnaround memos' to the contrary, as
'challenged,' and believe that at a bare minimum it needs a substantive,
albeit hihgly dilutive, equity recapitalization in order to reduce leverage,
improve credit rating and once and for all clean-up the balance sheet."
Devine said he expects Conseco's first-quarter results to be "plagued by
so-called nonrecurring 'legacy' charges." (RJH)
9:11 (Dow Jones) Stocks now look headed for a weaker opening, since the
economic data, while clearing the way for further easing, probably isn't
enough for the Fed to get more aggressive about rate cuts (as in, cutting
intermeeting). (RJH)
9:03 (Dow Jones) Yahoo (YHOO) may have spared investors from big surprises
last night, but its 1Q results weren't enough to get Prudential analyst Mark
Rowen to raise his hold rating. Rowen says it is "apparent...that the
company is still in the early stages of a metamorphosis, with a long road
ahead." (RJH)
(END) DOW JONES NEWS 04-12-01 |
