MARKET TALK: Fed's Stern Sees Heartening Economic Data
Edited by Thomas Granahan
Of DOW JONES NEWSWIRES
(Call Us: 201 938-5299; All Times Eastern)
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9:20 (Dow Jones) In a Dow Jones Newswires interview, Minneapolis Fed chief
Stern says recent data have been "on the heartening side" though caution is
still appropriate on the economic outlook. Remarks consistent with consensus
view that Fed still in easing mode, but not before March 20 FOMC meeting.
(BB)
9:13 (Dow Jones) Treasurys mixed to modestly higher, despite stock futures
showing higher opening for equities, in listless Monday morning trade. Some
traders expecting a quiet day if weather disrupts activity in New York on
both stock and bond markets. 10-year up 1/32 at 100 13/32, yield unchanged
on session at 4.95% (JNP)
9:08 (Dow Jones) "By year-end we look for the (Fed) funds rate to be 4%, 150
basis points below its current level," say economists at Goldman Sachs. (JC)
9:04 (Dow Jones) Merrill's Steve Milunovich says companies not slowing their
use of Internet technologies because of economy. Webification is a strategic
priority and a cost saver, he says, adding that he is seeing spending on
Windows 2000, NT servers, wireless products, and storage. Softer areas
include consulting, mainframes, printers and outsourcing. Prioritization is
taking place and projects are being delayed. Milunovich also said recent
meetings with CIOs revealed budgets were being reduced only recently as CFOs
"lower the boom." (TG)
8:56 (Dow Jones) Coca-Cola (KO) gets no love early in the first business day
after announcing President Stahl's resignation and formation of new, global
operating units. UBS Warburg's Caroline Levy says the shuffle could further
delay turnaround in volume growth, and she cuts price target to $52 from $61
and also lowers long-term EPS growth rate estimate to 12% from 14%. She
rates the stock a hold. Questions for investors: When will CEO Daft's plan,
including venture with Procter & Gamble (PG), produce top- and bottom-line
results, and what more can be done with core brands? (GC)
8:49 (Dow Jones) A few reasons why the Nasdaq may be nearing low, from
Arnhold's John Roque: A front-page, bearish article in the NY Times
(technicians often use these as contrary indicators), a recent road trip
showed most clients were realistic about the market and economy, fundamental
downgrades in large tech are happening, and Nasdaq has been down for five
weeks in a row. "The combination of the change in sentiment, the tremendous
oversold reading in Nasdaq, and the extreme downside volume says Nasdaq
should bounce," Roque says. That said Roque sees current limit to upside is
2400. (TG)
8:36 (Dow Jones) In raising Engelhard (EC) rating, Lehman says investors
increasingly embracing the company's new culture - including new chairman -
and future growth prospects. Lehman believes more P/E expansion will occur
this year, and raises its 12-month target to $30 from $26. But also says to
accumulate shares "opportunistically," as the shares have run up 20% so far
this year. (TG)
8:30 (Dow Jones) Stocks are looking at a flattish start to the week. The
Nasdaq closed Friday at its lowest level of the current bear market, while
the DJIA rebounded sharply from its lows of the session to close with a
slight advance. Not much so far on the corporate news front - some
management shuffling at Coke (KO), a soft 1Q outlook from Cypress Semi (CY),
a possible deal between Wal-Mart (WMT) and Amazon (AMZN) - but there is a
little data coming later in the form of a NAPM non-manufacturing reading and
Challenger layoff numbers. If things thin out on the trading floors later,
the action may become a little one-sided. Tsys showing some strength. (TG)
(END) DOW JONES NEWS 03-05-01
09:20 AM
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