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Thomson I-Watch Morning Update
thomsoninvest.net
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Market-Moving News
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* The weaker-than-expected July industrial production report and
recent surge in equities led investors to book profits again in
Japan. The Nikkei Index slipped 1.4% to 16,901.7, slipping back
below 17,000. Renewed interest rate worries after the strong US
housing data and profit taking on yesterday's gains took the Hong
Kong market lower. The Hang Seng Index slipped 0.8% to 17,096,
closing off its intra-day lows.
* Despite the directionless trade in the UK, the FTSE 100 is testing
its recent highs, gaining 0.5% to trade at 6,616. Telecom and major
oil stocks are leading the market higher. In France, telecom shares
are also giving stocks a lift. The CAC40 has jumped 0.8% to 6,686.
Equities traded in Germany are bucking the major European trend, as
traders warily await tomorrow's interest rate announcement from the
European Central Bank. The DAX has lost 0.4% to 7,262.
* The S&P Futures will have a positive influence on the market's
open today. The Futures are trading down 2.8 points, above Fair
Value, which is at negative 4.2 points.
* Economists will be looking for indications of further cooling in
the economy in the 10:00 release of the July Economic Leading
Indicators. The Thomson IFR consensus estimate forecasts a 0.1%
decline, after the Index rose 0.1% in the previous month.
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Stocks to Watch
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* Analyst Recommendation Revisions:
Merrill Lynch upgraded GTECH Holdings (GTK) to a "Buy" from an
"Accumulate" rating, finding several positive catalysts that should
lead to price appreciation in the next 12 months. The company hired
a new Chairman recently and announced a major expense reduction
campaign Tuesday.
First Union raised Inktomi (INKT) to a "Buy" from a "Market Perform"
rating on expectations for improved momentum in the enterprise
caching market.
SunTrust Equitable Securities lowered its rating on Dixie Group
(DXYN) to a "Buy" from a "Strong Buy" after the company warned 3Q
earnings will fall below expectations.
* Institutional Money Flows:
Brokerage stocks benefited from consolidation rumors. GS gained $5
to close at $127 7/16, DLJ surged $3/16 to $84, LEH rose $3 15/32
to $140 1/2, and NITE gained $2 15/16 to close at $30 3/8. Select
internet-related stocks continued to dip lower on advertising
concerns. EBAY slipped $1 13/16 to $61 1/8 and YHOO dipped $1 1/16
to $121.
* The investment segment of Switzerland's Credit Suisse (CSGZN.S),
Credit Suisse First Boston, will reportedly buy Donaldson Lufkin &
Jenrette (DLJ) for roughly $12.5 billion or $90 per share. Sources
say CSFB will pay DLJ's majority owner, Axa Financial (AXF), part
of French company AXA (AXAF.PA), half-cash and half-stock, while
other shareholders will receive $90 in cash. AXA holds a 70%
stake in DLJ. The acquisition is expected help CSFB expand its
US investment presence and follows rival UBS' (UBSZN.S) bid for
PaineWebber (PWJ). In pre-opening trade, DLJ has climbed to $85
after closing at $84 in after-hours trading.
* Whirlpool (WHR) warned that it expects to report a 3Q profit in
the range of $0.95-$1.05 and a 4Q profit of $1.45-$1.55. The First
Call/Thomson Financial consensus estimate predicted 3Q and 4Q
earnings of $1.52 and $1.68, respectively. The company cited North
American pricing pressures, challenging European environment, and
Circuit City's (CC) exit from the major appliance business.
Whirlpool sees momentum improving in 2001 due to newer products and
brand-building initiatives. The news follows Monday's 11% drop
after Prudential Securities lowered its rating on WHR to a "Sell."
In pre-opening trade on Instinet, WHR has fallen to $28 after
closing Tuesday at $37 7/8.
* Comverse Technology's (CMVT) FY00 2Q earnings climbed $0.10 to
$0.36 compared with the year-ago results. CMVT's earnings topped
the First Call/Thomson Financial mean forecast by 2 cents.
Including acquisition charges of $10.8 million, CMVT earned
$0.30.
* Zale Corp (ZLC) booked FY00 4Q earnings of $0.32, improving from
the year-ago results of $0.23 and surpassing the First Call/Thomson
Financial consensus estimate of $0.29. Separately, Chairman Robert
DiNicola announced plans to retire. The company said President CEO
Beryl Raff will succeed DiNicola.
* Esterline Technology's (ESL) FY00 3Q earnings climbed to $0.45
from last year's same-quarter earnings of $0.34. The First
Call/Thomson Financial consensus estimate predicted earnings of
$0.42. Including a $0.10 gain related to the reduction of
pension benefit obligations, ESL earned $0.55. |
