MARKET TALK: European Slowdown May Be More Than Expected
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
2:54 (Dow Jones) Fed's Meyer also weighs in on Europe, noting that there's
"considerable uncertainty" about their growth prospects and "there are some
indications that growth may be slowing more sharply than expected." (BB)
2:41 (Dow Jones) New data on marriage, divorce and remarriage in the U.S.
show 43% of first marriages end in separation or divorce within 15 years,
according to a report released today by the federal Centers for Disease
Control and Prevention. CDC official says data "offer an important glimpse
into the social fabric of this country." (JC)
2:27 (Dow Jones) Mixed message from Fed Governor Laurence Meyer. Warns that
inflation remains above rate he finds acceptable over the long run. But adds
that Fed still focused on economic slowdown. Suggests that once economy
stabilizes, Fed may want to swiftly return its focus to inflation. In wake
of Meyer citing inflation risks and saying Fed should not overshoot policy
goals, Treasurys slipping, led down by long end, with 30-yr Tsy dn 14/32 at
93 19/32 yield at 5.83% and curve steepening, with 2yr yield at 4.25%. (BB
JRP)
2:23 (Dow Jones) Leveraged buyout pioneer Kohlberg Kravis Roberts & Co. has
raised about $4.6 billion for its latest buyout fund, and will have a first
closing on that amount within the next 10 days, according to a person
familiar with the matter. KKR is expected to round up a total of $5.4
billion to $5.7 billion before the firm's final closing about a year from
now. As expected, the so-called "millennium" fund will likely come up shy of
KKR's previous $6 billion 1996 fund due to the tough fundraising environment
for LBO firms. (JAW)
2:14 (Dow Jones) A day after Northrop Grumman (NOC) launched a hostile $2.1
billion takeover bid for Newport News Shipbuilding (NNS), SG Cowen's Cai von
Rumohr says the bid is better than expected in that the cash portion will
likely be larger than previously thought. The planned issuance of up to 16.6
million Northrop shares would indicate the stock portion will make up about
67% of the deal, down from previous indications of 75%, the analyst says. He
expects the transaction to be a wash to Northrop's 2002 economic EPS and to
add to its profits from 2003 on. (SON)
2:03 (Dow Jones) Ralph Nader says "Sen. Jim Jeffords' decision to switch
from the Republican Party to an Independent designation bodes well for what
I believe is a growing sentiment for independent and third party efforts."
(JC)
1:53 (Dow Jones) In a letter to Walt Disney (DIS) employees, Chairman
Michael Eisner said the movie "Pearl Harbor" is of "enormous" significance
to the company. There are no sure things in the entertainment industry, he
wrote, "but this comes close." The movie has been estimated to cost about
$140 million, but in the letter Eisner said it's an "epic film that was made
on a less-than-epic budget. This is not to say it isn't expensive, but I
believe it will be profitable by Labor Day (he said, getting much too
cocky!)." (DDO)
1:40 (Dow Jones) Volume subsiding in Fed funds. Up 2.5 BP at 96.185, July
contract pricing in roughly 74% chance Fed cuts rates by 25 BP at June
meeting, broker says. (SPC)
1:28 (Dow Jones) Shares of Genome Therapeutics (GENE) continued higher
Thursday on the back of a bullish projection that the stock is destined to
travel to $84 within the next 12 months. The shares were up as much as 23%
after closing up 42% Wednesday at $13.50. Ladenburg Thalmann analyst Albert
Rauch ignited Genome Therapeutics' stock Wednesday, telling investors the
stock was a "strong buy" and that it would soar 784% from its then price of
just over $9. Rauch said Genome Therapeutics' changing focus to drug
discovery could lead to the discovery of several drugs with markets of
nearly $1 billion. (EGS)
1:11 (Dow Jones) Here's a brief post-mortem from a big market-structure
conference that was held Wednesday by the Securities Industry Association.
Diane Glossman, an analyst at UBS Warburg who attended the event, says the
conference "reaffirmed our view that there will continue to be consolidation
among market participants . . . as a result of both competitive pressures
and a changing regulatory landscape." That means Wall Street could see more
mergers involving stock dealers, alternative trading systems, stock
exchanges, and brokerage firms. (GFC)
1:06 (Dow Jones) The AFS Title Search Index, an indicator of housing
turnover and refinancing activity, fell a modest 0.5% to 186.2 for the week
ended May 18, from 187.1 the previous week. "A continuation of the low
volatility in mortgage rates around current levels will keep the index
buoyed," AFS's Paul Descloux says. (JSX)
1:02 (Dow Jones) Bottoms up. Shipments of import beers increased 14.1% in
March and 13.6% in the 1Q, according to recently released data from the Beer
Institute, an industry trade group. The results weren't as favorable for
domestic brews, which saw shipments drop 0.6% in the quarter. CSFB analyst
Skip Carpenter expects "healthy" consumer demand for imports to continue to
push shipment growth during the summer-selling season. (CEG)
12:42 (Dow Jones) Utilities remain a favorite group of Lehman technical
analyst Jeff deGraaf. Three names in the group broke out to upside on
Wednesday: TXU Corp. (TXU), American Electric Power (AEP), and Entergy
(ETR). (TG)
12:33 (Dow Jones) Spot gold down around $9/oz. from day's highs following
probable fund selling, profit-taking on Comex, sell-stops triggered below
$280/oz, a London-based trader says. At $279/oz. (MRL)
12:23 (Dow Jones) Garbage is still golden on Wall Street. Merrill Lynch
points out pollution-control stocks, in general, continue to be a great
place to be so far this year, with large-cap names such as Waste Management
(WMI) and Allied Waste Industries (AW) at or near 12-month highs. In a May
22 report, analyst William Genco noted that his weighted index of
pollution-control stocks, which include medical waste company Stericycle
(SRCL) and air emission filter producer Donaldson Co. (DCI), is 5% year to
date, compared with a 0.5% loss for the S&P 500 and 6.7% decline in Nasdaq.
(CCW)
12:12 (Dow Jones) The IPO market, only recently coming back to life, has
found itself entering another drought period, with no deals coming until the
week of June 4. Two forces are at work: Traditionally, major Wall Street
underwriters are hesistant to bring deals during a holiday-shortened week,
so that kills next week, with Memorial Day. Secondly, underwriters have
withdrawn far more deals than they've filed, so they have little in the way
of a backlog to feed the growing demand for new stocks. (RJH)
(END) DOW JONES NEWS 05-24-01
02:54 PM
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