MARKET TALK: Navigating Amazon Numbers Will Be Adventure
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
1:22 (Dow Jones) Lots to look for when Amazon.com Inc. (AMZN) reports 4Q
later Tuesday. High on analysts' lists are fulfillment costs and other
operating expenses and what they say about the company's ability to increase
efficiency. Some analysts are looking for the company to lower previous 2001
revenue guidance of $4 billion. And many are looking for some guidance on
when the e-tailer will break even. Company observers also wonder about a
layoff announcement, in the wake of an unconfirmed rumor Monday that Amazon
will cut up to 20% of its workforce. (RS)
1:12 (Dow Jones) Details of Saks (SKS) plan to sell nine stores to May Dept.
Stores (MAY) appear to please. Saks is selling from department-store group,
which has suffered. And while the $310M disposal price could be affected by
book losses (goodwill write-offs), any such loss would in turn "generally"
be offset by gains made on re-buying debt, which is what Saks plans to do
with most of the proceeds. SKS up 5%. (GC)
1:00 (Dow Jones) Floor trader says a 50 BP cut Wednesday is priced into the
market. "If we get 50 BP, we'll probably rally, but I can't see us going
much into the 1400 area," he says. "Then we might see selling come in."
March S&Ps last up 3.50 at 1373.50. (DMC)
12:48 (Dow Jones) DJIA near its highs for the session at 10794, up 92 on the
day. Recognizable old economy names such as Procter & Gamble, AT&T,
International Paper, DuPont and General Electic are leading the DJIA higher.
Nasdaq continues to trade in a narrow range at 2842, basically flat for the
day. (GS)
12:42 (Dow Jones) Do I hear 75 basis points? Fuji Futures chief strategist
John Vail thinks so, pegging the odds of a 75 BP move Wednesday at 65%. Most
think a 50 BP cut is still the most likely scenario, but Vail notes that
Greenspan doesn't want to be blamed for a recession, and there's little
downside to making a more aggressive move. (BB)
12:29 (Dow Jones) President Bush, asked Tuesday what he thinks the Fed
should do, said: "Mr. Greenspan needs to make his decisions independent of
what I think. I learned a pretty good lesson during the transition, and that
was I had commented out loud about one of the actions he took - and that was
the last time I'm going to comment about the actions that Mr. Greenspan
takes. He's an independent voice and needs to be an independent voice." (JC)
12:23 (Dow Jones) Corporate bond market on pace to turn in best or
second-best performance in a decade this month, says Morgan Stanley Dean
Witter. After the run-up, MSDW recommends scaling back from aggressive
overweight to more modest overweight in corporates. (DA)
12:19 (Dow Jones) Mylan Laboratories Inc. (MYL) is optimistic about the
fiscal fourth quarter and the coming year, even though pricing competition
and litigation woes over a generic blockbuster anti-anxiety drug haven't
disappeared. The company expects earnings of 30 cents to 33 cents a diluted
share for the fiscal fourth quarter ending March 31 as a result of
sequential growth in its generic and designer drug lines. (BMM)
12:14 (Dow Jones) For the "good is never good enough" files, a 50 BP Fed
rate is now more than 100% priced into February Fed funds futures. They are
now priced for a 54.5 BP cut, or roughly a 27% chance of a 75 BP move (or of
50 BP tomorrow and 25 BP inter-meeting before the end of Feb). (SV)
11:58 (Dow Jones) Equity indexes made run at some key resistance levels
Monday, but on light volume. Given the current short-term overbought
momentum readings, says Scott & Stringfellow's Dick Dickson, that's probably
an indication of a failed attempt to break resistance. Key levels to watch
in next few days are: 2700 on Nasdaq Comp, 1370 on S&P 500, and 10800 on
DJIA. (TG)
11:49 (Dow Jones) Sealed Air Corp. (SEE) continues to be blown around by
asbestos liability concerns. The company hasn't made or sold any
asbestos-related products and its business is solid, but it goes to show how
nervous investors are about holding shares of any company that even comes
close to the asbestos issue. Sealed Air is implicated in the ever-expanding
web of asbestos litigation because it bought a unit from W.R. Grace (GRA) in
1998 and is named as a co-defendant in asbestos cases with Grace, which is
contemplating filing for Chapter 11 bankruptcy. Sealed Air was off $2.29
recently to $29.10. (CCW)
11:43 (Dow Jones) Expect good reaction from most emerging markets to lower
Fed rates. Higher exports and lower rate prospects, combined with wider
yield differentials, should help to make them more attractive again. As long
as politics doesn't get in the way. (NEH)
11:38 (Dow Jones) The market may be pleased that Procter & Gamble (PG) beat
Wall Street's estimate for the 2Q, but apparently it's also relieved that
management didn't lower near-term earnings guidance. The stock has been weak
recently - falling 3.5% Monday - as investors began to think P&G might make
such a move along with its 2Q earnings announcement. No such thing happened
and shares of P&G, a Dow component, are up more than 5% Tuesday. (CEG)
11:24 (Dow Jones) When Internet-access providers Earthlink (ELNK) and
MindSpring announced their merger in September 1999, CEO Garry Betty
predicted the company would have 8 million subscribers by the end of 2001.
Times have changed. In reporting 4Q 2000 results Tuesday, Earthlink said it
expects 5 million customers by year-end, up only 300,000 for the year. Amid
heavy competition and soft PC demand, the company's dial-up access customer
base actually contracted slightly in 4Q and isn't expected to show any
growth during 2001. Earthlink is now pinning its hopes on broadband growth.
(PDL)
11:14 (Dow Jones) Treasurys opened strong and built on that strength via the
nasty confidence number. Bonds will have a hard time gaining from here,
however, because the Fed meeting will limit many players' appetite for
taking on new positions, participants say. The 10-year is up 23/32 to yield
5.20%, in a session where gains are spread evenly through the yield curve.
(MSD)
(END) DOW JONES NEWS 01-30-01
01:22 PM
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