MARKET TALK: 50 BP Cut From Fed, And That's All Folks
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
12:05 (Dow Jones) The market may get 50 basis point reduction in interest
rates in March, but forget about Fed action afterward, one economist says.
"In this environment it is more important that rates are lowered fast, not
far," said Don Hilber, senior economist at Wells Fargo Banks. (KJT)
11:56 (Dow Jones) One upside to the day's tech selling - the downward move
has put several picks by Bear Stearns in the money. Altera (ALTR) at $26.63,
is within Bear's recommendation for aggressive buying when the stock is
between $24 and $27. Intel (INTC), at $32, is within Bear's range of $28 to
$32 and Lattice Semiconductor (LSCC), at $21.44, is within Bear's parameters
of $20 to $23. (KJT)
11:51 (Dow Jones) GKST Economist Brian Wesbury says "any belief that the
recession is already over is wishing upon a star." (JC)
11:43 (Dow Jones) Mellon Financial (MEL) can chalk up its success to its
focus on high-growth and high-value businesses, says analyst Judah Kraushaar
of Merrill Lynch. He reiterated his long- and short-term buys and continues
to see more than a 30% ROI in the shares this year. Kraushaar also said he
thinks Mellon may soon announce one or more transactions to sell its
leasing/asset-based lending businesses, to be completed in the 2Q. (TAS)
11:40 (Dow Jones) It's probably not the best time to take a wholesale
approach to sectors, says Christine Callies, chief market strategist with
Merrill Lynch. Instead, Callies likes five representatives of different
sectors, including Avnet (AVT) for technology, Alberto-Culver (ACV) for
consumer staples, Continental Airlines (CAL) for transportation, Engelhard
(EC) for basic materials and Smith International (SII) for the energy group.
(KJT)
11:33 (Dow Jones) The Options Clearing Corp. and the Board of Trade Clearing
Corp. have called off negoatiations about combining the two businesses, said
people familiar with the matter. Talks between the OCC, which is the world's
largest clearing house for financial derivatives and which is owned by the
five options exchanges, and the BOTCC have been on-again and off-again for
some time, although the latest round was characterized as extremely serious.
A merger would greatly expand the scope of each house's business, since the
BOTCC clears futures and futures options. (KXT)
11:28 (Dow Jones) At 2355, down 70, the Nasdaq Composite Index is less than
70 points from its closing low of 2291 on Jan. 2. Thing is, the index has
spent the morning positioning to move lower, by breaking through a support
point at 2360. As a result, "long positions are considered extra risky and
against the larger, underlying downward trend," said Arthur Hill, chief
technical analyst at TD Trader, a website devoted to technical analysis.
(KJT)
11:22 (Dow Jones) So much for that post-holiday rally. Shares of B2B
software darling Ariba (ARBA) dropped to $19.31 early Tuesday - the lowest
level since its IPO week in June 1999. With the Nasdaq sliding towards 2300
it's not the only former highflier setting new 52-week lows. Amazon.com
(AMZN) at $13 and JDS Uniphase (JDSU) at $31.75 both did as much this
morning. (MLP)
11:19 (Dow Jones) Stocks deteriorating fairly quickly. Nasdaq Composite less
than 100 points from Jan. 3 low of 2251, where chart watchers say the
selling needs to stop or we're heading to 2000. No surprise that technology
is leading the market lower, with loads of more pessimism from analysts.
DJIA getting strength from the two huge retailers, and oils in general a
little stronger. DJIA up 20 at 10891, Nasdaq off 75 at 2350, and S&P 500
falls 11 to 1290. (TG)
11:11 (Dow Jones) March S&Ps, which seemed to be holding their own, could
start to increase losses if March Nasdaq continues to fall, and the weakness
could spread. "This could turn into a day like Friday," one floor trader
says. (ZHS)
11:06 (Dow Jones) Treasurys in negative territory. Fed's short-dated coupon
pass fails to boost prices. 2-year down 1/32 at 100 2/32, yield up 1 BP at
4.72%. 10-year down 2/32 at 99 2/32, yield up 1 BP at 5.12%. (JNP)
10:58 (Dow Jones) Wall Street hoping strong quarterly results out of BEA
Systems (BEAS) on Thursday will reverse its recent share price slide. Lehman
says it expects top-line growth of 75% and a penny upside to its 9c EPS
target. CSFB predicts upside to its revenue target of $252M, or 69% growth,
and 9c EPS estimate. Both brokerages recommend buying the stock ahead of the
report. (MLP)
10:44 (Dow Jones) March Nasdaq extended losses in morning trading, but
traders cannot pinpoint the problem, other than to say blue-chips look more
attractive once again after analysts bad-mouthed tech stocks over the
weekend. "This is not so much a selloff as people being hard-pressed to buy
(Nasdaq)," said one floor trader. "They are bidding up the DJIAS and dumping
the Nasdaqs." (ZHS)
10:40 (Dow Jones) Merrill Lynch says euro may be harder hit than dollar by
repatriation into yen ahead of close of Japan's fiscal year on March 31,
since most dollar sales have already taken place during last three months,
says Merrill Lynch senior global debt strategist Karim Basta. A Merrill
survey of 120 fund managers in U.S., U.K., Japan and Europe shows exposure
to the euro has now reached a record high for the 12-yer history of this
survey, Basta notes (JNP)
(END) DOW JONES NEWS 02-20-01
12:07 PM
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