MARKET TALK: Drop In Unemployment Rate An Anomaly
01 Feb 16:13
Edited by Thomas Granahan
Of DOW JONES NEWSWIRES
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4:13 (Dow Jones) The surprise drop in the January unemployment rate is likely
an "anomaly" that does not change the overall trend of a weakening employment
picture, Kathleen Cooper, Commerce Undersecretary for Economic Affairs, told
Dow Jones Newswires in an interview Friday. Cooper also does not expect a
renewed focus on accounting procedures by large corporations in the wake of
Enron's collapse to pose a major obstacle to firms' capital spending plans.
(DAL)
4:04 (Dow Jones) Given all the action in stocks this week, and the big data
out Friday, it seems a little surprising today's session was among the more
tame of the week. Then again, given all the action in stocks this week, maybe
it as time for a rest. Anyway, data still pushing toward recovery. Banks a
little soft, techs slip, but nothing dramatic. After Tuesday, all in all not a
bad week. DJIA drops 16 to 9903, Nasdaq Comp eases 22 to 1911, and S&P 500
sheds 8 to 1122 (preliminary). (TG)
3:55 (Dow Jones) Median pre-money valuations of venture-backed companies
plunged in the Internet technology and products and services sectors.
Healthcare valuations, however, held up, with the median valuation dipping to
$17 million last year, down from $18.8 million in 2000, according to
VentureOne. Within healthcare, the medical devices sector saw an increase in
valuations for 2001. The median rose to $19.6 million, up from $17.2 million in
2000. (JAW)
3:42 (Dow Jones) No inflation? SBA says it's increasing its revenue-based
size standards for small businesses by 15.8% to account for inflation since
1994. (JCC)
3:27 (Dow Jones) Argentina's Grupo Galicia (GGAL) down 24.75% to $2.22 after
the country's supreme court ruled that cash withdrawal limits are
unconstitutional. (SR)
3:22(Dow Jones) With closing price of 97.935, June federal funds futures
fully pricing in chance of 25 basis point tightening in spring and beginning to
price in chance of a 50 basis point hike. (CMN)
3:17 (Dow Jones) Going back to 2000, the Nasdaq Composite has had 9 up months
and 16 down months, with an average monthly return of (2.16%), according to
Arnhold's John Roque. For the AMEX biotech index, it's 11 up, 14 down, with an
average monthly return of 2.71%, and for the SOX, it's 14 up, 11 down, and a
0.87% return. Thanks, but who cares, might be your response. Well, given how
much investors focus on these groups, it could be very important. "It ain't a
walk in the park to trade/invest in the ETFs representing these indexes," Roque
points out. (TG)
3:01 (Dow Jones) J.P. Morgan Chase's (JPM) venture capital portfolio has been
on a losing streak, as its stakes in telecom and tech companies suffered along
with the sharp decline in the Nasdaq, where new companies tend to list their
shares. The New York financial services giant, which has also been buffeted by
losses tied to Enron (ENRNQ) and Argentina, is expected to shave off about $2
billion from its VC portfolio, or to about $7 billion, said A.G. Edwards
analyst Diana Yates after a meeting with JPM CFO Dina Dublon. JPM plans on
keeping VC's bottom-line contribution to about 15%, though "that may be
extremly hard to accomplish during the highs and lows of the market." Shares
off 1.36, or 4%, at 32.69. (TAS)
2:50 (Dow Jones) Lehman Brothers analyst Eric Berg said Friday that Aflac's
(AFL) earnings could be hamstrung in the near future by difficulties in Japan -
nearly 70% of the supplemental insurer's earnings come from Japan. "The company
is still struggling in Japan," said Berg, adding a good portion of its 20%
earnings growth in 2001 is from margin improvement and a strengthening dollar.
Aflac reported its 4Q results late Thursday. Goldman Sachs analyst Joan Zief
said, in a separate note Friday, she expects sales growth in 2002 despite
concerns about how quickly that Japanese economy will turn around. (CUB)
2:37 (Dow Jones) Despite the stress over today's payrolls and the Fed
meeting, Tsys "didn't really do a whole lot this week," says Dan Antonellis, a
market strategist with Briefing.com. "Overall, the market is probably still in
a defensive stance," he says, adding that gains today merely short covering
after overly bearish pre-payrolls plays. (CMN)
2:34 (Dow Jones) Although venture-capital fund-raising totals have plummeted,
the median size of the funds closed in 2001 leapt to $150 million in 2001, up
from $100 million in 2000, according to VentureOne. The increase reflects a
shift in the types of firms out fundraising, says Dave Witherow, VentureOne
president. "In late 1999 and 2000, it was relatively easy for new players in
the industry to raise small funds. Today, institutional investors are far more
discriminating, making fundraising difficult for firms without a proven track
record. And established investors tend to raise larger funds." Of the venture
funds raised last year, only 36% were under $100 million, compared to 45% in
2000. And, although the number of $1 billion funds declined in 2001, the number
of funds totaling between $250 million and $999 million increased between 20%
and 30%. (JAW)
2:12 (Dow Jones) After Barrick Gold (ABX) announced higher-than-expected
costs related to its December merger with Homestake Mining, Canaccord Capital
analyst Brian Christie says he anticipates higher merger costs for Newmont
Mining Corp. (NEM) too. But, he adds, a strong gold price could negate market
reaction to that scenario. Newmont shareholders vote Feb. 13 on the three-way
deal with Normandy Mining Ltd. and Franco-Nevada Mining Corp. Barrick said
Thursday that pretax merger costs would be $117 million vs. earlier $75
million-$100 million guidance. (LMO)
1:57 (Dow Jones) Fundraising by venture-capital firms last year was only
about half of what it was in 2000, but, similar to venture investing, is
showing signs of stabilizing. Institutional commitments to venture investing
totaled $48.2 billion in 2001, down from the $90.1 billion raised in 2000,
according VentureOne. Despite the steep drop, last year's total is down only 5%
compared to 1999. Demonstrating that fundraising may be stabilizing, the amount
raised in the 4Q of 2001 totaled $9 billion, down only 5% from the previous
quarter's $9.5 billion. (JAW)
1:42 (Dow Jones) Despite Friday's encouraging news on the unemployment front,
Americans could still see the jobless rate climb in the months ahead. Jacob
Frenkel, president of Merrill Lynch International, said in an interview at the
World Economic Forum he is optimistic on the U.S. economy, but warned that
companies may continue to cut costs through job cuts. He said, "We should not
be confused if we see in the next quarter, or even two, a slight rise in (the)
unemployment rate, let's not be confused by saying 'Gee, we're getting into a
deeper recession.' " (GFC)
1:33 (Dow Jones) Students participating in this year's Kurt Thomas Investment
Challenge are likely to discover that investing in the market is no slam dunk.
About 120,000 students grades four through 12 are about to play the Stock
Market Game. For the second year, New York Knicks starting forward Kurt Thomas,
is sponsoring teams in New York City. The game begins next week, with each team
receiving $100,000 in funny money. Up to 10 top-performing students in New York
will get paid summer internships at Merrill Lynch (MER). (CWM)
(END) DOW JONES NEWS 02-01-02
04:13 PM |
