MARKET TALK: Bet That Up; Mirage Can Head Higher
10 Jan 14:49
Edited by Thomas Granahan
Of DOW JONES NEWSWIRES
(Call Us: 201 938-5299; All Times Eastern)
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2:48 (Dow Jones) Robertson Stephens analyst Harry Curtis upgraded MGM Mirage
(MGG) to strong buy from buy and said the stock should trade at $37 to $39 a
share in the next 12 months. Room rates in Las Vegas seem to be returning to
levels in line with last year, and convention bookings in the 1Q have been
running ahead of last year's bookings, he says. Shares up 2% at $30.51. (DDO)
2:35 (Dow Jones) Pimco's Bill Gross in January investment outlooker article
says USD "is in the process of peaking" and can no longer be counted on to
positively influence inflation downward. As USD weakens, this will tend to
steepen the Tsy yield curve, hurting 10- to 30-year maturities and sending
their yields higher, but with 1- to 3- year yields held fairly low by Fed
keeping interest rates at low levels for much of the year. By the way, his
monthly commentaries always mix entertainment, personal revelation, boastful
talk of whipping challengers and sage financial advice. In this month's
edition, Gross says in his next life he'd like to be either a rock 'n' roll
singer or a reporter. (JNP/MSD)
2:27 (Dow Jones) Talk about lemons and lemonade. A Thursday Wall Street
Journal article airs concerns that retail stocks may have run out of steam
following their recent rally. Daniel Barry, an analyst at Merrill Lynch, says
that's a positive for the sector. "We believe this provides a wall of worry
that is necessary for the bull market to continue," Barry says. Thursday is the
last day for retailers to revise estimates, he adds, and any further revisions
will be to the upside. 4Q earnings will be better than expected for retailers,
and 1Q may be "as strong as any in the past four decades," Barry says.
Highlights surprisingly strong December sales from Wal-Mart (WMT), Target
(TGT), Costco (COST), BJ's (BJ) and Kohl's (KSS). (JMC)
2:11 (Dow Jones) Advent International has raised $1.9 billion for its fourth
global private equity fund, bringing the firms total managed capital to $6
billion. The fund will concentrate overseas, with 70% of its capital planned
for Europe. (RJH)
2:00 (Dow Jones) Santomero says strong dollar signals expectation of
recovery, and that there's been some signs of improvement in the labor market.
He adds the Fed has "flexibility" to cut rates more, if needed. Stocks behaving
a little better - DJIA off 30 at 10063, Nasdaq Comp gains 8 to 2053, and S&P
500 up 2 at 1157. (MSD/TG)
1:52 (Dow Jones) UCAR International (UCR) shares are rising 11% after CSFB
upgrades the stock to buy from hold. The firm applauds the company's
restructuring plan, which UCAR announced Wednesday morning, and projects the
plan - when it is fully implemented in 2004 - will add incremental annual
savings of 69c-75c/share. CSFB raises its EPS estimates for the next three
years and boosts its price target to $16. UCAR shares gaining $1.25 to $12.05
on more than three times its normal volume. (GS)
1:40 (Dow Jones) Fed Chairman Greenspan is slated to speak about financial
literacy later Thursday, which may not make waves. But round two - when he
pronounces on the economy in a speech Friday - could prove a pivotal
market-moving event, say some. Jim Bianco of Bianco Research LLC expects that
on Friday Greenspan "will step up to the podium in San Francisco and tell the
market what he will do on Jan. 30," because dealers and the fed funds futures
are divided in their view of whether Fed will cut rates, or hold at January
FOMC. This time, Greenspan wants "everyone on the same page", Bianco says.
(JNP)
1:29 (Dow Jones) While Gap (GPS) cleared away millions of shirts, jeans,
sweaters and coats in December with steep markdowns that will take their toll
on profits, earnings will be shored up by a combination of strong expense
control and the sheer dollar volume of holiday sales, says ABN-Amro's Christine
Kilton-Augustine. The company says 4Q results will be "no worse" than its 6c 3Q
loss. Street 4Q consensus had expected a 12c loss after Gap's warning last
month that 4Q loss would be "significantly worse" than 3Q's. The clearance
sales will leave year-end inventories cleaner than previously expected, Gap
says. Shares recently up 14%. (JMC)
1:22 (Dow Jones) At a time when economic predictions fill the air, John
Spratt, ranking Democrat on House Budget panel, quotes John Kenneth Galbraith
to the effect that "the main function of economic forecasting is to make
astrology look respectable." (JCC)
1:12 (Dow Jones) PBHG Large Cap Value Fund manager Ray McCaffrey has slahsed
his $550-million fund's technology weighting to a significant underweighting
position of 14% from nearly 30% only a few weeks ago. After their double-digit
rally this year, many tech stocks "now have priced in recovery." He is now
heavy in pharmaceutical and supermarket-chain stocks because of their
"historically low valuations" in what he sees as a "fully valued" market. His
favorites are Merck (MRK), Schering-Plough (SGP), Kroger (KR) and Safeway
(SWY). Unlike many value fund managers, McCaffrey trades rapidly, and turned
over his portfolio 10 times both in 2001 and 2000 with successful results.
(YXH)
1:00 (Dow Jones) A lack of activity in financial markets helped push
fixed-rate mortgages to a five-week low, Freddie Mac says. The 30-year rate for
the week ending Jan. 11 fell to 7.06% from 7.14%. The 15-year rate also fell
this week to 6.55% from 6.62% a week ago. And 1-year ARMs remained unchanged at
5.26%. (JSX)
12:46 (Dow Jones) As if to show the limits of any upside in a holiday season
stricken by terrorists and an economic recession, Wal-Mart (WMT) on Thursday
failed to raise its 4Q earnings guidance of $1.48 to $1.49 a share, even though
its December same-store sales gained 8.2%, blowing past its expectation of a 4%
to 6% increase. That's because Wal-Mart's sales were driven by a surge of
customers that flocked to buy staple items and other goods that were priced the
lowest, with the lowest margins, says Jeff Feiner, an analyst at Lehman
Brothers. (JMC)
12:40 (Dow Jones) Some things in life don't change but the S&P indexes often
do, at least once a year, as mergers, spin-offs and other corporate activities
rejigger the components of the S&P 500, Mid-Cap and Small-Cap indexes. While
updating its list of possible deletions, Salomon Smith Barney's research team
says Electronic Arts (ERTS) and SunGuard Data Systems (SDS) are among the
largest tech names eligible for inclusion, while eBay (EBAY), IDEC
Pharmaceuticals (IDPH) and Ace Ltd. (ACE) are among the largest non-tech
candidates. Because financial services, technology and energy are the most
underweighted sectors, Salomon names Ace, Electronic Arts and BJ Services (BJS)
among the top picks for possible inclusion into the S&P 500. (KT)
12:29 (Dow Jones) Lehman Brothers (LEH) has raised $1.6 billion for a
merchant banking fund that will make real estate investments, primarily in
North America and Western and Central Europe. The Wall Street firm, which began
talking to potential investors in mid-2000 about the fund, called Lehman
Brothers Real Estate Partners, had originally set out to raise $1 billion from
pensions, foundations and other institutions and high net-worth individuals.
Lehman's private equity group has raised more than $5 billion in various
private equity and venture capital funds since 1997. (KT)
12:19 (Dow Jones) If the yacht isn't enough to get the ladies' attention, the
convertible BMW will surely help. Dealers of Brunswick Corp.'s (BC) Sea Ray
boats are offering one of the most unusual enticements to join the megayacht
set at the New York National Boat Show: a free BMW Z3 with the purchase of a
motor yacht of more than 46 feet in length. To get the free car, a buyer has to
plunk down some bigchange: Its 510 Sundancer was listed at $861,000. That's
not cheap, but it's a big drop from the regular price a boat of that size would
fetch: $1,111,393, according to the manufacturer's suggested retail price. A
Sea Ray 480 Motor Yacht, which normally retails for $820,000, was priced at
$652,000. (RJH)
12:03 (Dow Jones) New CBO report says Medicaid spending is rising rapidly -
up by more than 18% so far this fiscal year, after surging by 10.5% from 2000
to 2001 - and that defense spending in first quarter of fiscal year is up about
10% (after adjusting for a pay-date shift), in part because of U.S. military
activity in Afghanistan. CBO says spending for many other government programs
and activities also has grown. (JCC)
(END) DOW JONES NEWS 01-10-02
02:49 PM |
