PMCS can go either way for shorts or longs ...have to play it with the index from here , unless more negative comments are issued ...in at $101+
DJ MARKET TALK: Weakness In Tsys Goes On
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
10:27 (Dow Jones) Treasurys market sell-off continues, with 10-year now down
21/32 since data and its yield up 6 bp on session to 5.37%. Nevertheless,
"we could have got slogged more", were it not for Greenspan balancing his
remarks that government can afford to cut taxes, with remarks that
government can continue to pay down the debt. (JNP)
10:24 (Dow Jones) Greenspan cautions that "the current economic weakness may
reveal a less favorable relationship between tax receipts, income, and asset
prices than has been assumed in recent projections." (JC)
10:22 (Dow Jones) Greenspan says "the flurry of increases in outlays that
occurred near the conclusion of last year's budget deliberations is
troubling because it makes the previous year's lack of discipline less
likely to have been an aberration." (JC)
10:21 (Dow Jones) It appears Greenspan's testimony has a little for
everyone. Clearly he makes the case for a tax cut. But also highlights
importance of dwindling federal debt for lower cost of capital. Reiterates
long-held view that tax cuts better than spending increases. Expect some
additional fiscal stimulus in the months ahead. (BB)
10:20 (Dow Jones) Greenspan says CBO expected to again raise its budget
surplus projections next week. (JC)
10:18 (Dow Jones) Greenspan emphasizes at outset of his Senate Budget
Committee testimony that, "I speak for myself and not necessarily for the
Federal Reserve." (JC)
10:16 (Dow Jones) Oil companies continue pump hefty profits out of high oil
and gas prices. Both Phillips Petroleum Co. (P) and Unocal Corp. (UCL)
topped analyst expectations for the fourth quarter. Phillips improved its
return on capital employed in 2000, continued to chip away at its debt and
exceeded its 4Q production target. Amerada Hess Corp. (AHC) will report its
fourth-quarter results later Thursday. (CCC)
10:04 (Dow Jones) Existing home sales fell by 7.4% to 4.74 million, sharper
than expected, especially given the decline in mortgage rates. Existing home
sales are deemed to occur at close, so they reflect mortgage rates two or
three months earlier, before the sharper fall. (JM)
10:02 (Dow Jones) Sam Heyman's restated offer for Hercules Inc. (HPC)
Wednesday isn't likely to rally the chemical company's stock, said Salomon
Smith Barney analyst Gil Yang. "Hercules is already in play," he said. Also,
there are a few negatives. Credit rating agency S&P lowered its ratings on
Hercules' debt, adding $7 million in interest expense this year. If Moody's
takes similar action, interest expense could climb $3 million to $4 million
more. Yang thinks Hercules has a 50/50 chance of a sale. (CCC)
9:58 (Dow Jones) Treasurys moderately higher ahead of Greenspan's
Congressional testimony at 10:00 a.m. ET. 10-yr at 103 15/32, up 6/32, yield
down 3 bp at 5.28%. (JNP)
9:53 (Dow Jones) JPY is moving in "a counter-intuitive way to the
fundamental picture," says Lara Rhame, currency analyst at Brown Brothers
Harriman in New York. The ECI data looked USD-positive, she said, but the
JPY didn't slip in response, unlike the EUR/USD and GBP/EUR. Instead,
interest-rate differentials are driving USD/JPY. (RF/JEN)
9:42 (Dow Jones) March Nasdaq is weak in early trade, extending the opening
losses slightly. Market has support at the overnight low of 2695. A move
through there could take the market to test layered chart support from 2686
to 2672, a floor technical trader says. Resistance comes in around 2739, the
pivot point, and 2753. (DMC)
9:38 (Dow Jones) At Salomon Smith Barney's financial services conference,
St. Paul Cos. (SPC) Chairman and CEO Douglas Leatherdale said commercial
insurance premiums are likely to increase at double-digit levels for the
next two to three years, and could move upward at about a 4% growth rate
after that. He said he expects prices to reach "adequate" levels before any
downturns. (CUB)
9:33 (Dow Jones) March S&Ps and Nadsaq start weaker, with Nasdaq leading the
losses. However, activity is bound to be light ahead of comments from
Greenspan, due at 10 a.m. ET. Traders are hoping for a preview of coming
attractions at next week's FOMC meeting. Focus also remains on earnings.
(DMC)
9:30 (Dow Jones) Nymex crude futures seen opening unchanged to 10 cents a
barrel lower, pressured by Wednesday's close near the intraday lows. Little
news overnight. If nearby March can rise and break $29.80, Wednesday's high,
"things look positive," analyst says. March crude, down 5c to $29 in
overnight ACCESS trade, has support at $28.65. (MSX)
9:26 (Dow Jones) Enron Corp. (ENE) shares are already 25 cents higher in
premarket trading, as the energy company kicks off an all-day analyst
meeting in Houston. Earlier, said it was comfortable with 2001 earnings
estimates of $1.70 to $1.75 a diluted share, which is ahead of the First
Call/Thomson Financial consensus estimate of $1.69 a share. Enron also
expects to substantially complete its broadband network this year. Enron
expects bandwidth deliveries to increase eightfold this year. (CCC)
9:19 (Dow Jones) Lehman cuts Minnesota Mining (MMM) 2001 EPS view to $4.70
from $4.80, anticipating just 1.8% sales growth. Cut reflects current weak
economic environment in U.S., and firm believes benefits from cost-cutting
will be somewhat offset by weaker demand, difficult pricing environment, and
negative currency impact. Reiterates cautious market perform rating, and
says stock fully priced. (TG)
9:13 (Dow Jones) Dow Chemical Co. (DOW) once again showed its strength in
managing the high energy and raw material costs that have plagued the
chemical industry. Dow posted 4Q earnings in line with expectations. What
was its secret? "Bill, Michael and Pedro" said Lehman Brothers' Sergey
Vasnetsov, referring to Dow's executive management. However, Dow's might
doesn't mean it is immune to the pricing pressure in the performance
plastics business, where earnings before interest and taxes fell as higher
costs compressed margins. (CCC)
9:07 (Dow Jones) Recent oil company earnings releases are confirming Merrill
Lynch's 20%-plus growth estimate for exploration and production spending
during 2001. The primary drivers for increased spending are high levels of
oil company cash flow, and oil companies' inability to grow oil and gas
production volumes, Merrill Lynch analyst Kevin Simpson said. Since oil
services companies receive the benefit of this spending, Simpson expects it
will be a great year for oil service investors. (CCC) |
