DJ MARKET TALK: Techs Ravaged As Global Economies Slow
12 Mar 10:47
Edited by Thomas Granahan
Of DOW JONES NEWSWIRES
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10:47 (Dow Jones) In a bad sign for networking technology companies, the
economic slowdown is spreading beyond the U.S. Until now, a number of these
companies were pointing to the U.S. economy as the main culprit for their woes.
But now there is broadening evidence of international economic weakness, says
Alex Henderson, analyst at Salomon Smith Barney. Henderson cut his price
targets for Nortel Networks (NT), Cisco Systems (CSCO), JDS Uniphase (JDSU),
Corvis Corp. (CORV) among a number of others, pointing out that Japan is
slipping back into a recession; Korea, Taiwan and Singapore are seeing rapid
erosion in the export markets for electronics; Australia's economy is "slowing
sharply;" Mexico's industrial production slowed in first quarter; auto
production in Argentina fell in January and February; and Germany's industial
output shows signs of stagnating. (BED)
10:36 (Dow Jones) NRG Energy (NRG) may have the building blocks in place to
expand its already significant generation presence, particularly in the U.S.,
said Merrill Lynch analyst Elizabeth Parrella, who resumed coverage of the
stock with a buy rating. The company has a strong pipeline of power plant
projects, a relationship with Dynegy Inc. (DYN) that helps its trading ability,
and geographic diversity, she said. Parella set a 12-month price target of $35
for the stock, which recently traded at $27.60. (CCC)
10:28 (Dow Jones) Prudential PLC (PUK) Chief Executive Jonathan Bloomer says
the combination of Prudential and American General Corp. (AGC) is expected to
yield $130 million in cost savings by the end of 2002. In a webcast with
analysts, Bloomer said the combination will give the insurer greater scale in a
consolidating world market, and a larger U.S. reach. (CUB)
10:24 (Dow Jones) Online brokers aren't escaping the wide-ranging cuts in
earnings estimates Monday. Robert Sobhani, of Banc of America Securities,
lowered earnings views for the March quarter on E*Trade Group (ET), Ameritrade
Holding (AMTD), Charles Schwab Corp. (SCH), CSFBdirect (DIR) and stock and
Knight Trading Group (NITE). Sobhani also lowered views on TD Waterhouse
Group's (TWE) 2Q, which ends in April. Also lowering estimates on TD Waterhouse
was Russell Keene, of Keefe Bruyette & Woods. Both analysts noted that
stock-trading activity has been weak among retail investors. Shares of online
brokerage firms are down. (GFC)
10:15 (Dow Jones) Though stocks have provided a bid for Treasurys, there is
also a fair bit of selling into the strength. There is a lot about the Fed,
since the economy ex-stocks looks good. That means the 25 BP or 50 BP debate
comes down to whether the Fed is inclined to move based on the stock market,
and some people doubt that. (SV)
10:09 (Dow Jones) Some stats on the Nasdaq bear market: The Composite index
is now in worst bear-market ever - if not on time basis then on percentage
basis - down 60% from last year's high, eclipsing the 21-month, 59.9% drop in
1973-74. Kent Engelke of Anderson & Strudwick notes a record $3.4 trillion in
Nasdaq wealth has been destroyed, the equivalent of 36% of today's GDP and 112%
more than Bush's proposed tax cut. He adds "The culprit for this decline in
economic growth is primarily flawed Fed policy."
10:00 (Dow Jones) And the estimates continue to fall. Lehman Brothers analyst
Mark Constant took down his 1Q views for Goldman Sachs Group (GS), Morgan
Stanley Dean Witter (MWD) and Merrill Lynch & Co. (MER). He now expects Goldman
to earn $1.30 a share, from $1.50; Morgan to earn 99 cents a share, from $1.24,
and Merrill to earn 95 cents, from 99 cents. Goldman and Morgan are expected to
announce earnings next week, while Merrill's quarter doesn't end until the end
of the month. (CWM)
9:57 (DowJones) As more gas exploration companies outsource natural gas
compression, Universal Compression Holdings Inc. (UCO) has experienced higher
demand for its services, according to Lehman Brothers' James Crandell. Crandell
started coverage of the company with a buy rating and a 12-month price target
of $44. Universal's bottom line also should get a boost from its recent
acquisition of Weatherford Global, Crandell says. Universal shares flat at
$37.70. (CCC)
9:51 (Dow Jones) Alright, one just turned up! The sole stock advancing on the
DJIA is Hewlett-Packard (HWP), up 6 cents. Biggest decliner of the other 29,
Microsoft (MSFT, down 4%. DJIA off 200 at 10446, Nasdaq falls 72 to 1980. (KJT)
9:44 (Dow Jones) June Nasdaq falls to limit down, 65 points lower, to hit
1772.50 at 9:37 a.m. ET. The sharply lower open led to a limit down trade.
Losses are also acting up in June S&P and DJIA. A 10-minute trading curb is in
effect. If the market remains at limit down, 2-minute trading halt is in
effect. (DMC)
9:42 (Dow Jones) Latest economic woes in Japan "could be the final straw for
non-Japan Asia and for the global economy at large," according to MSDW's
Stephen Roach. (JC)
9:40 (Dow Jones) DJIA off 180 at 10462. All of the 30 issues in the index are
lower, led by JPM, MSFT, and INTC. (TG)
9:37 (Dow Jones) Shares of the average oil and gas exploration and production
company have doubled over the last year, and Lehman Brothers' Thomas Driscoll
thinks some stocks are approaching fair value. The analyst cut ratings on two
stocks primarily for valuation concerns: Pioneer Natural Resources Co. (PXD)
and Noble Affiliates Inc. (NBL). Driscoll warns there could be some risk to E&P
stocks because of growing fears that natural gas demand could slip if the
economy slows. (CCC)
9:32 (Dow Jones) Nasdaq Composite off 53, drops below 2000 level for first
time since Dec. 16, 1998. DJIA off 40 and S&P 500 falls 8. (TG)
9:25 (Dow Jones) Decimalization on Nasdaq starts todaywith 15 names,
including Brocade (BRCD), Commerce One (CMRC), Inktomi (INKT), OpenWave (OPWV),
and Rambus (RMBS). Sees final decimalization done by April 9. (TG)
9:22 (Dow Jones) Senate Majority Leader Lott says he expects a final tax cut
bill to go to President Bush before Congress leaves for its Fourth of July
recess. And House Majority Leader Hastert sees a "very good chance" of a
capital gains tax cut being enacted this year. (JC)
(END) DOW JONES NEWS 03-12-01
10:47 AM |
