MARKET TALK: CEC Entertainment, Now That's Eatertainment
15 Jan 08:56
Edited by George Stahl
Of DOW JONES NEWSWIRES
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8:56 (Dow Jones) CEC entertainment (CEC) shares are "moderately undervalued,"
Wachovia says, adding that the operator of Chuck E. Cheese restaurants "holds a
leading position in family eatertainment. It is our view that long tenured
management, strong brand recognition and significant operation experience
provide CEC a significant competitive advantage." The firm starts coverage at
buy with a $50 price target. CEC shares ended Monday at $45.72. (GS)
8:50 (Doe Jones) The far smaller-than-expected drop in retail sales has
prompted selling in Treasurys, but buyers quickly emerged, mitigating the
losses. The long end initially took most of the heat, but is now back near
pre-data levels. Sellers seem to be hindered by the near-certainty that the Fed
will cut rates later this month, and the potential that the recovery could be a
long drawn out affair despite still-healthy consumer demand. (SV)
8:46 (Dow Jones) Fed funds lower across most contracts after retail sales
release. Feb said to be slightly decreasing odds of 25 bps rate cut at Jan FOMC
to around 60% vs about mid-60% at the close Mon and 70% early Mon. Market now
looking ahead to Beige Book. (SPC)
8:44 (Dow Jones) There were upward revisions to retail sales in November.
Total sales were revised to -3.0% from -3.7% and ex-auto sales were revised to
-0.2% from -0.5%. On balance, the upward revision to November and the minimal
decline in December suggest there was a solid gain in consumer spending in 4Q.
(JM)
8:41 (Dow Jones) Kmart's (KM) problems are spreading to others, as Salomon
Smith Barney downgrades Kimco Realty (KIM) to neutral from outperform. "Our
rating change is based on the uncertainty surrounding the situation at Kmart,
Kimco's largest tenant, representing 13% of rents in the core portfolio." The
firm keeps its estimates on Kimco but says they "may prove optimistic depending
on the number of lease terminations or rejections." Salomon says most stores
would be releasable, but it may take some time and it's unclear whether the
rent prices would change. (GS)
8:37 (Dow Jones) Retail sales slipped by 0.1% in December, despite a very
large 4.2% decline in gas station sales due to price declinse. Both auto and
nonauto sales were down 0.1% as well. One area of welcome strength was clothing
store sales, up 2.6%. In addition, electronic store sales were up 2.0% and
furniture store sales were up 1.4%. (JM)
8:29 (Dow Jones) The DJIA and Nasdaq begin the day below 9900 and 2000,
respectively, for the first time in 2002. Particularly disturbing Monday was
the selloff in the final hour of trading. Investors have been taking profits in
the belief that the late December rally is unsustainable by the economy (a
theory backed by Greenspan on Friday) and corporate earnings, a theory
supported Tuesday by Tyco (TYC), which announced earnings in line with views,
lowered current quarter guidance but backed FY estimates. That outlook suggests
the company doesn't see a rebound this quarter but does later this year. Other
big earnings today: Intel (INTC), EBay (EBAY) and a bunch of banks. Elsewhere,
UBS and Enron detail their deal; Dec. retail sales report in a minute. Europe
uninspiring; Asia down sharply. Dollar up vs. the euro, down against the yen.
(GS)
(END) DOW JONES NEWS 01-15-02
08:56 AM |
