here some market chit chat with bloodgeon leading the kaffee klatsch....
MARKET TALK: Blodget Says Current Yahoo Views Conservative
07 Mar 10:18
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
10:18 (Dow Jones) Still waiting on Yahoo! (YHOO) news. Merrill's Blodget says
it's conceivable company could be next in line of big preannouncers, but also
says current company targets of $220M-$240M in revenue and earnings of 4c-7c a
share are conservative, even considering slump in economy and advertising.
Shares halted, last trade $20.50. (TG)
10:09 (Dow Jones) Intel Corp. (INTC) Chairman Andrew Grove may have said
end-demand isn't going to "snap back" but investors were sure snapping up
shares of the chip giant Wednesday. The stock was recently up 3.6%. Tuesday
Lehman Brothers hosted a conference call with Grove, who said chips will remain
in the current demand environment for "some period of time." Following the
presentation, Lehman analyst Dan Niles lowered his estimates on Intel, although
Niles said he wasn't motivated to cut his numbers because of any comments out
of Grove. (DLF)
10:04 (Dow Jones) CSFB trims revenue and EPS estimates on Microsoft (MSFT),
citing reduced expectations for PC shipments and desktop software sales over
next two years. In near-term, CSFB cuts 3Q and 4Q revenue by $100M each to
$6.2B and $6.3B. Still sees 3Q EPS of 42c, but cuts 4Q EPS by 1c to 43c. CSFB
keeps buy rating. (MLP)
10:00 (Dow Jones) Stocks shoot for their third consecutive up day, but this
time the fear is back. Unlike the past two sessions, when the options market's
fear gauges fell as stocks gained, the CBOE's market volatility index, or VIX,
rose Wednesday morning along with stocks. This is a sign that even as traders
and money managers are buying in stocks, they are becoming increasingly anxious
about the market. After falling for four straight sessions, VIX most recently
is up 0.40 to 27.86. (KXT)
9:56 (Dow Jones) Monday was the beginning of the bouncing process in stocks,
and Tuesday was follow-through, says Lehman technician Jeff deGraaf. Maximum he
would expect from Nasdaq Comp is 2632, and that's probably too optimistic.
Target is more likely 2450-2500. Momentum is turning negative on Nasdaq 100,
with yesterday's activity reminding him of Feb. 15, which saw a gap open to the
upside, and weakness at end of day. "We are sellers short-term, expecting to
resolve the overbought condition," he says of high-tech index. (TG)
9:42 (Dow Jones) Nymex crude futures are expected to open 20-30 cents a
barrel higher after API, DOE data show an unexpected decline in U.S. crude
inventories last week. According to API, stocks fell nearly 4 million barrels
to a 25-year low of 275.799 million bbl. More talk of an imminent OPEC output
cut seen supportive. April crude, up 24c at $28.56 in overnight trade on
ACCESS, faces resistance at $28.80; resistance is seen at $28. (MXF)
9:39 (Dow Jones) After two days of firmer trade, floor traders expect March
S&Ps could hold gains Wednesday. "The market is in good shape right now," one
floor trader says. Resistance for market seen at session high of 1264.80 and a
move above there could take S&Ps to 1270 and possibly 1277. Support seen at
1243.70, and 1234.50, where buying is expected to form. (DMC)
9:34 (Dow Jones) Stocks out to early gains again. Tech strong - Nasdaq 100 up
2.1% - and Intel leads DJIA higher despite cautious comments from company.
Bullish stance from Abby Cohen also lending support. DJIA up 37 at 10627,
Nasdaq gains 38 to 2242, and S&P 500 improves 7 to 1260. (TG)
9:28 (Dow Jones) JDS Uniphase's (JDSU) profit warning was widely anticipated,
UBS Warburg analyst Joseph Wolf believes. Wolf says the market expected the
warning after major customer Nortel Networks Corp. (NT) warned last month.
"This news is clearly not JDS specific," Wolf said, noting recent warnings by
three other optical component makers. "Our longer-term view is that the optical
network is a long-term investment opportunity and that this is a bump, albeit a
severe one, in the road." (JDB)
9:22 (Dow Jones) Nasdaq Comp can rally to 2500, but take profits if it does.
So says Kent Engelke, of Anderson & Strudwick. No surprise why. First, access
to capital is almost non-existent. Second, interest rates are not the
over-riding factor for capital spending - those decisions are cash-flow and
profit driven. Profits are down, so capex is, too. Finally, the world is
saddled with excess capacity, which has to be absorbed and written off. (TG)
9:12 (Dow Jones) Recent field checks showing that supply in the optical fiber
market is starting to loosen led Merrill Lynch analyst Steven Fox to lower his
2001 earnings estimate for Corning Inc. (GLW) to $1.20 from $1.39. Fox says
that more of the glass fibers should become available as the year progresses,
putting pressure on pricing. He said service providers are focused on better
using current capacity. Fox's comments come a day after Corning competitor JDS
Uniphase (JDSU), which makes components similar to Corning, issued a new profit
warning. Fox maintained his near-term accumulate and long-term buy rating on
Corning's stock. (JDB)
9:09 (Dow Jones) After breaking the Y120 level in London trading, the dollar
is not much below, at Y119.90, as New York opens. Confusion over comments made
by Bank of Japan Governor Masaru Hayami that intervention to weaken the
Japanese currency is a possible option to boost the flagging economy sent the
dollar over the key level. (JRH)
9:00 (Dow Jones) Goldman's Abby Joseph Cohen is one bull who won't be penned
in. She raises the firm's equity allocation to 70% from 65%, the first bump up
in a year. Cohen also leaves unchanged her projection that the Dow, which
closed Tuesday at 10591, will reach 13000 by year-end and the S&P 500, which
closed at 1253, will be at 1650 by Dec. 31. "We are increasingly confident that
a too gloomy consensus scenario is (already) priced into share prices," Cohen
said in note to clients. (KJT)
8:57 (Dow Jones) Yahoo! (YHOO) cancels appearance at Merrill conference,
first time it has canceled the day before. As a result, Merrill's Henry Blodget
says it's prudent to review usual reasons that lead to cancellations: impending
earnings preannouncement; major acquisition; take-out or strategic investment;
and/or major management change. He also adds Yahoo! has never been a "business
as usual" company, so it may be none of these things. "Let your imagination
roam," he says. (TG)
8:46 (Dow Jones) Prudential fine-tunes Target (TGT) 2001 estimate - to $1.55
from $1.54 - but says there may be 9c upside to that view. Feb. sales lower
than expected, as sales softened during final week, but Pru not alarmed, with
Target management backing 1Q consensus of 28c a share. (TG)
8:38 (Dow Jones) More important than JDS (JDSU) revenue shortfall is decline
in margins, Lehman says. Firm had factored in March gross margins of 50.5% vs.
51.4% in December, but now believes 48% is more realistic, and lower than that
in June is likely. Cuts FY01 view to 65c from 72c, and FY02 estimate falls to
55c from 74c, vs. consensus 82c. Still best positioned in optical component
sector, Lehman says, but firm remains cautious on stock, as revised estimates
could still be at risk. (TG)
8:33 (Dow Jones) Look for Outback Steakhouse (OSI) to trade off, as February
same-store sales revealed "a sharp slowdown" from January's results, says
Janice Meyer at CS First Boston. The analyst, who's neutral on the stock, says
Outback has posted flat or down traffic in four of the last five months.
"Though some of the weakness may be due to softer consumer spending, we think
some may be company-specific," Meyer advises clients. (RLG)
8:30 (Dow Jones) Plenty more bad news for equities, but it doesn't look like
major indexes are going to get hit. In fact, stocks are poised to move higher,
trying to build on two consecutive days of gains. Among companies warning about
profit shortfalls: JDS Uniphase (JDSU), Dow Jones (DJ), and Broadcom (BRCM).
Meanwhile, Bear Stearns (BSC) said hitting its views may be difficult. Good
news from Abby Cohen. Goldman's bullish strategist, who hasn't wavered much
from her upbeat outlook on stocks, now has bumped up her equity allocation by
5%. Fed's Beige Book coming later in afternoon. Stock futures looking good,
Tsys flat. (TG) |
