MARKET TALK: How Could You NOT Buy It After This?
08 Jan 16:19
Edited by Thomas Granahan
Of DOW JONES NEWSWIRES
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4:19 (Dow Jones) It's an old story: press release quoting spurious expert
giving stock pick hits the Internet - shares rise. That may not be why Paradyne
Networks (PDYN) shares closed up 17% Tuesday, but it seems as good an
explanation as any. Zacks Investment Research put out a release Tuesday, which
Yahoo! published, in which Kevin Kennedy of the "Coolcat Explosive Small Cap
Growth Stock Report" recommends Paradyne, among other companies. Internet
message boards are aflutter with joy. Maybe Kennedy is right, but remember what
some expert once said about a grain of salt? Company has no news to report.
(NBB)
4:04 (Dow Jones) Tech behaved OK, but it was the rest of the market that
wasn't so hot. Session had a tame feel to it, despite some big news. Economic
data weren't overwhelming, and Fed chiefs weren't notable. Tech outlooks were
mixed. DJIA drops 47 to 10150, Nasdaq Comp adds 18 to 2055, and S&P 500 eases 4
to 1160 (preliminary). (TG)
3:56 (Dow Jones) An acquisition of Georgia-Pacific's (GP) building products
unit by Willamette (WLL) would lower Nesbitt Burns forecast for Willamette for
2003 to $1.98 a share from $3.32 and leave the forest products concern with the
weakest balance sheet of the North American major integrateds, a pro-forma
analysis, before synergies, from Nesbitt Burns shows. The acquisition could
result in a drop in Willamette's stock price - currently at about $44.37, off
2.4% - to below $30, depending on the synergies obtained and the price paid,
the firm says, evaluating the potential deal. If, on the other hand, Willamette
does not ink a deal with G-P and if Weyerhaeuser withdraws its hostile $55 a
share offer, Willamette would likely trade in the low $30s. (JAW)
3:48 (Dow Jones) Cowen doesn't change numbers for Riverstone Networks (RSTN)
based on recent deal with PowerComm, but the pact does increase confidence in
company's ability to achieve quarter-over-quarter growth forecasts. Riverstone
is one of the better-positioned vendors to benefit from capex investments
shifting into metro, Cowen says, and raises price target to $24 from $19.
Shares up 0.6% at $19.63. (TG)
3:26 (Dow Jones) Sun Country Airlines met with one of three "serious"
potential investors Tuesday, the same day three of its creditors filed an
involuntary Chapter 7 petition against the company. "We've been meeting with
various potential investment groups who understand our plan is to secure an
investment and go to a court with a valid plan for reorganization under Chapter
11," Sun Country spokeswoman Tammy Lee said. Although Lee declined to identify
the three serious investors, she said two were Minnesota-based and none were in
the airline industry. Financier Carl Icahn, who has reportedly been involved in
discussions with several airlines and last year tried to outbid AMR Corp.'s
(AMR) American Airlines for Trans World Airlines, isn't one of them, she said.
(DE)
3:11 (Dow Jones) On Monday, Wall Street analysts could barely hold back their
excitement for tech, with names like Microsoft and Dell, among others, getting
big upgrades. Yet tech slumped late in the day. Tuesday, the Street is dealing
with a less-than-stellar outlook from AOL (last night), a Merrill downgrade of
a big high-tech sector, and some caution on Qualcomm from at least one firm,
and techs are acting pretty well. As Lehman's Jeff deGraaf said earlier today,
"Market's rarely reward what's anticipated." DJIA off 53 at 10142, Nasdaq Comp
adds 16 to 2053, and S&P 500 drops 5 to 1159. (TG)
2:53 (Dow Jones) Talk that Bank One (ONE) may acquire Bear Stearns (BSC) is
"fairly plausible," but the probability of a deal is low, says Sean Ryan, bank
analyst with Fulcrum Global Partners. Ryan says Bank One investors appear to be
losing patience with the bank's "turnaround story, nearly two years into
(Chairman and CEO) Jamie Dimon's tenure, which could increase Dimon's stated
desire to pursue acquisitions, as a means of delivering growth that continues
to elude the core franchise." Ryan views Bear Stearns as "an exceptional firm
and a potentially good fit with Bank One." But, generally, the odds are always
against any specific deal occurring, he says. (JAW)
2:42 (Dow Jones) A bankruptcy court will likely approve the sale of e.spire
Communications' (ESPIQ) CyberGate subsidiary to the company's chief executive
for $22.88 million. The company reviewed the terms of the sale with the
presiding judge at a hearing Tuesday morning. With no objections to the sale,
e.spire said it needs some time to iron out the details of the sale with its
debtor-in-possession lenders. The $22.88 million bid by CEO George Schmitt,
also the company's chairman, was selected as the highest and best bid at the
company's auction on Monday. (TB)
2:29 (Dow Jones) eBay (EBAY) reports next week, and Schaeffer's Investment
says the company has exceeded earnings expectations by an average of 36% for
the past five quarters. Technically, the stock has some work to do. The $70
level has been a pest for the shares, which have not closed a month above that
level since April of 2000. That said, the stock is holding support at the
10-week moving average, which has acted as support since mid-October.
Schaeffer's analyst Jocelynn Drake says the shares may soon find themselves in
a face-off between support from moving average and overhead resistance at $70.
With a short-interest ratio of just 2.49, it's not likely short covering will
boost shares through $70, but whenever that area is topped, the stock should
have plenty of room to move higher. EBAY off 0.5% at $66.50. (TG)
2:10 (Dow Jones) N.Y. Fed head McDonough says the data point to an economy
that's finding its bottom. He sees no threat of contagion from Argentina. (MSD)
2:01 (Dow Jones) Merrill Lynch analyst Judah Kraushaar trimmed his 2002
earnings outlook for Citigroup (C) and FleetBoston Financial (FBF), citing
potential risk to the Argentina economic situation. He lowered Citigroup to
$3.30 a share from $3.35, and FleetBoston to $3.15 from $3.25. "Argentina
represents limited credit risk for both of these companies and both have
probably already set aside credit reserves for the deteriorating situation,"
Kraushaar said. (CUB)
1:48 (Dow Jones) ABN-AMRO's Ken Leon upgraded Scientific-Atlanta (SFA) to buy
from hold, concluding the worst is behind the cable set-top box maker. "SFA's
core business in North America should improve in the (second half of 2002),
especially with easier comparisons," Leon says. He particularly likes the
company's prospects in the German cable market, with transmission revenues
adding $81 million in calendar 2002 and $260 million in calendar 2003. (JDB)
1:34 (Dow Jones) There's a "lot of reassessment of the (economic) landscape"
going on right now in interest rate futures products, says Michael Wallace, a
senior economist with Standard and Poor's MMS International. Plays seen so far
seem to indicate participants believe they may have overestimated the degree of
tightening necessary in summer but underestimated next year, he says. (CMN)
1:26 (Dow Jones) Merrill Lynch revisited its view of the household-products
and personal-care industries, in response to Argentina's economic turmoil. Avon
(AVP) has the largest exposure in the group to that country, according to
Merrill, which cut Avon's 2002 EPS estimate by 4 cents to $2.28 a share; the
investment house maintained a buy rating. Merrill notes Avon shares already
reflect much of this profit cut. Because of lower Argentine exposure, other
companies didn't get an earnings cut. Shares off 0.6% at $44.50. (NBB)
1:15 (Dow Jones) Coach (COH) is due to report its 2Q, or "holiday quarter",
sales results on Wednesday morning, and the shares were recently up 4% at
$41.85. Lehman says its 92c 2Q view for the luggage retailer "could prove quite
conservative." Reiterates strong buy and ups 12-month price target to $48 from
$42. "Coach was a hot item for Christmas shoppers," adds David Lamer, an
analyst at Ferris Baker Watts. "The stores look pretty clean on fall product,
and they were not aggressive on sales promotions at all." Lamer currently
expects the company to earn 93c a share, in keeping with the Street's view.
(JMC)
1:02 (Dow Jones) Massey Energy (MEE) widened its two-month operating loss
view after the close of trading Monday, and Merrill Lynch responded with a
downgrade Tuesday. Merrill notes that Massey shares "will tread water until
management begins to meet their own preliminary expectations." Merrill cut its
2002 sales estimate to 50M from 54M tons and raised its average-cost-per-ton
expectation to $25.50 from $24.60. Merrill also notes that troubles don't
appear to be industrywide, but a problem specific to Massey. Its shares are the
second-biggest decliner on the NYSE, down 18.9% to $18.03. (NBB)
(END) DOW JONES NEWS 01-08-02
04:19 PM |
