MARKET TALK: Euro Gets Help On Another Front
19 Feb 13:04
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
1:04 (Dow Jones) While EUR is clearly benefiting from an unlikely ally -
Enronitis - it's also getting a helping hand from the JPY's weakness after the
very disappointing Bush trip. Clearly Bush wasn't going to publicly criticize
Koizumi for not pressing ahead with reforms, but the fact that he instead
lavished praise on the Japanese premier is taken as some sort of nod of
approval for Japan's very slow reform efforts. (GMM)
12:54 (Dow Jones) After receiving a slew of phone calls from individuals
concerned that J.P. Morgan Chase's (JPM) credit rating was on wobbly ground,
Moody's Investor Service late Friday affirmed its Aa3 ratings on the financial
services giant. While Moody's did say JPM's performance has been disappointing
of late, it still believes its "diversified stream of earnings from its
operating businesses, together with expense controls, should allow the bank to
absorb higher credit and risk expenses," the ratings agency said in a
statement. The earnings stream, together with its substantial capital base,
makes it unlikely that individual problem credits will hurt its credit rating,
Mode's added. JPM off 2.7% at $29.24. (TAS)
12:45 (Dow Jones) A state court in Jackson, Miss., rendered a jury verdict
awarding plaintiffs $1.745 million in actual damages and $750,000 in punitive
damages against Champion Industries (CHMP). The plaintiffs alleged Champion
Industries and its Dallas Printinc subsidiary engaged in unfair competition and
other wrongful acts in hiring certain employees. Champion said it has no
insurance coverage to cover the award, but it has a guaranteed right to appeal
under Mississippi law. The company intends to appeal the verdict. Shares off
6.5% at $2.90. (TAG)
12:38 (Dow Jones) Hewlett-Packard (HWP) said itscontention that 65% of
employees are "supportive" of the proposed merger with Compaq Computer (CPQ) is
based on a monthly survey conducted by an independent consultant. H-P said it
was releasing details to clarify the context of the surveys because many
employees have raised questions about the differing levels of employee support
reported in the news media. Support of the merger has also been questioned by
dissident H-P director Walter Hewlett, a vocal opponent of the deal. "The
question of how many H-P employees favor the merger with Compaq seems to have
taken on a life of its own in recent weeks," H-P said. H-P disputed a Feb. 15
report by Forbes.com that said 60% of 2,421 employees who responded to a survey
answered "not at all" or "not really" to the question, "How confident are you
in the future of H-P after hearing Carly's Q4 message?" (RG)
12:22 (Dow Jones) The unsecured debt of bankrupt energy company Enron (ENRNQ)
is trading in the teens, says Harold Rivkin, principal, H. Rivkin & Co.,
Princeton, NJ. Bids are at a dollar price of 11, while offerings are at 13.
Enron was "basically a brokerage company that gave the illusion of having
assets," said Rivkin. He predicts that the unsecured bonds will continue to
decline in dollar price, into the single digits, and then fractions of a
dollar, before going "down to nothing." (MCG)
12:08 (Dow Jones) It's a tad early, but brace yourself for the reconstitution
of the Russell benchmarks, which happens annually at the end of June based on
late-May market caps. This year, CSFB's quantitative strategy team expects a
quieter reconstitution, with the Russell 2000 seeing a projected 266 additions
(compared with 495 in 2001, 545 in 2000) and 165 deletions (compared with 276
in 2001 and 322 in 2000). There are also no drastic moves expected in sector
weight changes - perhaps a moderate increase in technology weighting. (KT)
11:51 (Dow Jones) PayPal (PYPL), which rose 55% in its debut Friday, is
suffering a sophomore slump typical of high-flying IPOs, with the shares off
8%. Analysts expected a drop, given that its gains were driven by individual
investors. "That's the thing with momentum investors," says Tom Taulli, analyst
with Netcap Ventures. "They don't stay around too long." (RJH)
11:38 (Dow Jones) Investors may be worried about news that Medi-Hut's (MHUT)
new accountant stepped down after only two weeks on the job, but the company
insists that "no out of the ordinary business situation caused" Grant Thornton
LLP's resignation." Out of the ordinary business or not, Medi-hut stock is down
28.4% to $2.72. A Medi-Hut spokeswoman says that the company will soon file yet
another 8K announcing its third accountant of the year. Grant Thornton declined
to comment on the matter. (CSR)
11:24 (Dow Jones) "There's no way the market can rally strongly when
financials are weak/weakening," ays Arnhold's John Roque. He notes the 1998,
1999-March 2000, and 2001 market declines didn't stop until the BKX (Philly
Bank index) got under 700, or about 13.5% below Friday's close. What's more,
Citigroup (C) is making a broadening top, with lower highs and lower lows. He
sees it as easy to call Citi to $35, retesting its September 2001 low, and says
shares have risk to $30. C off 3% at $42.70, weakest member of DJIA. (TG)
11:16 (Dow Jones) Despite strong housing starts data this morning, April fed
funds hardly moved from where they settled Friday. With last quote of 98.19,
April fed funds pricing in about an 8% chance of a 25 BP ease at March meeting.
That compares to a 6% chance of the ease at Friday's settle of 98.195. (CMN)
11:04 (Dow Jones) Stocks are falling again, but that's not swaying the
new-found conviction of Tobias Levkovich, U.S. institutional equity strategist
at Salomon Smith Barney, who has been pretty bearish but on Tuesday is out with
a note telling investors to start buying. "It's time to step up to the market
as a cyclical turn seems to be forthcoming," Levkovichwrote. "There is a
strong likelihood that business trends are about to improve." (KJT)
10:55 (Dow Jones) UAL may have averted a downgrade for now by reaching a
tentative agreement with its mechanics union. But S&P says that while the
parent of United Air Lines avoided the most damaging near-term risk, a strike,
its B+ rating remains on review for downgrade due to the "long and difficult
task ahead" to cut labor costs. UAL's 10.67% notes of '04 are up 1/2 pt at
64-65. Shares up 14.6% at $13.02. (RTB)
10:41 (Dow Jones) Stocks, as expected, getting whacked around pretty good.
IBM near bottom of Dow, partly on its revelations, and techs and financials
lending no help in general. The Nasdaq Comp matched its intraday low of Feb. 8,
a level not seen since early November. A handful of DJIA components are higher,
led by DuPont, but the weakness is broad Tuesday, with groups seen as key
leaders not acting well. Momentum in stocks still negative. DJIA off 71 at
9832, Nasdaq drops 30 to 1774, and S&P 500 falters 12 to 1092. (TG)
(END) DOW JONES NEWS 02-19-02
01:04 PM |
