MARKET TALK: A Lot More Of The Same For Japan, S&P Says
31 Jan 11:23
Edited by Thomas Granahan
Of DOW JONES NEWSWIRES
(Call Us: 201 938-5299; All Times Eastern)
MARKET TALK can be found using code N/DJMT
11:23 (Dow Jones) Japanese Government Bond market, with benchmark yield at
1.48% Thursday morning in NY, eyes S&P's directly worded statement that credit
quality in Japan expected to further deteriorate in 2002 in all sectors of
economy. Banking sector "weaker than ever before, and some form of government
intervention, especially for larger banks, appears to be inevitable." However,
S&P cites a few encouraging signs - structural adjustments in companies
expected to broaden and gather pace, says S&P MD for Asia Pacific region
Michael Petit - credit quality in corporate and banking sectors may take two
years to bottom out, however. (JNP)
11:15 (Dow Jones) With low of 98.04 this morning, June fed funds priced in at
least an 80% chance of a 25 basis point tightening by spring. That compares to
about a 60% chance priced in at Wednesday's close. (CMN)
11:10 (Dow Jones) Six Flags (PKS) says a purported class-action lawsuit
against it alleges that security and other practices at its park in Valencia,
Calif., discriminate against visitors on the basis of race, color, ethnicity,
national origin and/or physical appearance. The suit was filed on Nov. 27,
2001, and combines five previously filed complaints. The plaintiffs purport to
represent seven "subclasses" of visitors to the park and seek compensatory and
punitive damages in unspecified amounts, and injunctive and other relief. The
company has objected to the class allegations, arguing that the lawsuit cannot
appropriately be maintained as a class-action, and intends to vigorously defend
this case. Shares flat at $15.15. (DL)
11:00 (Dow Jones) Fired up about that surprising GDP reading Wednesday? Try
to contain your excitement. Bill Bruns, of Schaeffer's Investment, points out
the first-run number often looks much different than the final reading. In the
3Q, GDP first was reported as declining 0.4%, vs. expectations of a 1% drop.
The number got finalized at down 1.3%. Given everything facing stocks now,
including Tuesday's downside break of trading ranges on several major indexes,
caution is warranted. (TG)
10:49 (Dow Jones) You can't rule out accounting issues at individual
companies, says Salomon Smith Barney economist Steve Wieting, but panic selling
likely leaves U.S. markets more attractive, not less. Concerns about accounting
issues and earnings quality, in the aggregate, have little to do with
underlying business conditions. That said, the idea that earnings quality
issues are transitory is not a call suggesting that valuations are low. "We
expect little net recovery in earnings in 2002 on the same basis that earnings
were reported in 2001," he says. (TG)
10:38 (Dow Jones) The manufacturing outlook appears to be improving, says
Lehman Brothers. They're pegging the ISM index - due Friday - at 49, which is a
pace that's almost above water. (MSD)
10:27 (Dow Jones) Merrill Lynch (MER) continues to see no compelling reason
to merge with a commercial bank, its president and chief operating officer told
attendees at a Salomon Smith Barney financial services conference. It's a tune
Merrill has sung many a time, even as rumors crop up from time to time about a
possible linkup with joint venture partner HSBC Holdings (HBC). Both companies
have repeatedly denied such a merger would take place. "No one has yet made a
compelling case as to why [merging with a bank] is additive to our ability to
grow," O'Neal said. (CWM)
10:20 (Dow Jones) The Dow Jones-Bank of Tokyo-Mitsubishi business barometer
rose by 1.0% in the week ended Jan. 19, marking the third straight weekly
increase. "There is increasing evidence of a business cycle trough in
December," said Mike Niemira, senior economist at BTM. (JM)
10:13 (Dow Jones) Wall Street just gotanother big dose of economic data,
most of it pretty good - as long as you're in that wacky camp that believes a
stronger economy is a good thing. Chicago PMI up, deliveries higher,
help-wanted index gains. Stocks holding decent gains, with overall market
helped by Intel upgrade, good P&G numbers, and goodwill generated by
Wednesday's late rally. For all the big numbers out so far this week,
tomorrow's employment report steals the show. DJIA up 46 at 9809, Nasdaq adds
10 to 1922, and S&P 500 climbs 3 to 1117. (TG)
10:05 (Dow Jones) Shares of Research In Motion (RIMM) are up 7% early after
Goldman Sachs analyst Rajiv Das upgraded the stock to his recommended list. Das
had previously rated the stock market outperformer. The company, maker of the
BlackBerry e-mail device, is also benefiting from a favorable comparison
between BlackBerry and Palm's (PALM) latest competitive offering, the i705, by
Wall Street Journal technology product reviewer Walter Mossberg. "In my view,
the new Palm i705 is a weaker e-mail device than the RIM," Mossberg wrote in
his column Thursday. (SEW)
9:54 (Dow Jones) McLeodUSA's (MCLD) Chapter 11 petition listed consolidated
assets of $4.8 billion and debts of $4.57 billion. McLeodUSA's pre-packaged
bankruptcy filing comes just days after another telecom giant, Global Crossing
(GBLXQ), filed the fourth-largest Chapter 11 case in history. The filing also
comes just a week after telecom giant Winstar Communications (WCIEQ) converted
its Chapter 11 reorganization case to a Chapter 7 liquidation. Those holding or
controlling 5% or more of the voting shares are Wellington Management Co.,
Clark E. McLeod and Alliant Energy Investments Inc., according to the petition.
(DE)
9:43 (Dow Jones) ABN-Amro ups Polo (RL) target to $33-$34 from $27-$29 in
light of better-than-expected holiday comps from Tiffany (TIF) and upbeat
pre-announcement from Neiman Marcus (NMG). Company reports 3Q next week, and
ABN-Amro says Polo can hit brokerage firm's 46c estimate, which is at high end
of Street. Keeps buy rating, and says fall menswear lines are being received
well by retailers. Shares off 0.8% at $27.21. (TG)
9:33 (Dow Jones) Compaq Computer (CPQ) estimates it will spend about $750
million on capital expenditures for land, buildings and equipment during 2002.
The company spent about $927 million during the last fiscal year on capital
expenditures. Uses of cash for this year also include purchases of equipment to
be leased to third parties of about $440 million. Compaq said it expects to
fund expenditures for capital requirements from a combination of available cash
balances, internally generated funds and financing arrangements. (CD)
9:26 (Dow Jones) As the U.S. economy starts to move ahead, analysts see at
least a 3-month lag for similar gains in the euro zone and this could set the
scene for a euro dip to the "low eighties." EUR/USD is $0.8626; USD/JPY is
Y133.12; EUR/JPY is Y114.89. (JRH)
9:22 (Dow Jones) Goldman Sachs analyst Richard Strauss told investors that
brokerage stock prices have started to look more appealing following the hit
the group took this week after PNC restated its 2001 earnings. He would feel
even more bullish if prices came down another 5% to 10%, back to the level seen
at the end of September. He also cut his 1Q earnings estimate for Lehman
Brothers (LEH) to $1 from $1.18 a share, and for Morgan Stanley (MWD) to 65
cents from 69 cents, citing light trading volumes. (LC)
9:13 (Dow Jones) PricewaterhouseCoopers' decision to split off its consulting
business in an IPO comes as the auditing side dominated last year's IPO market.
PwC audited the results of 24 IPOs, though those deals represented 54.2% of all
money raised in the market in '01, according to Thomson Financial. Ernst &
Young was a distant second, handling just 16.8% of proceeds. Arthur Andersen,
incidentally, was far back in fourth, even before all the Enron-auditing
hubbub. (RJH)
9:03 (Dow Jones) Citizens Communications (CZN) expects to record a pretax
gain of $300 million in the 1Q ending March 31 from the sale of its water and
waste water treatment operations to American Water Works (AWK). The transaction
closed Jan. 15 for $859.1 million in cash and $120.4 million in assumed debt
and other liabilities. The sale is part of Citizens' plan to divest its public
utilities services businesses. (CC)
(END) DOW JONES NEWS 01-31-02
11:23 AM |
