MARKET TALK: Germany's GDP Looking Lower
Edited by Thomas Granahan
Of DOW JONES NEWSWIRES
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2:22 (Dow Jones) A leading German economic institute lowers its forecast of
German GDP growth this year to 1.3% from 2.1%. The Institut fuer
Weltwirtschaft, which made the 2.1% prediction in April with other
institutes, sticks to a joint 2002 German growth forecast of 2.2%. (JMS)
2:07 (Dow Jones) Blue-chip names holding on to nice gains, while techs,
telecoms a little soft. Big gains in GM, United Tech, and Honeywell propel
Dow. Oracle the big scheduled news after the bell. Stock futures traders say
lots of shorts built in over past four days, and anything out of Oracle
deemed mildly positive could give stocks a lift, which could be leaving
shorts a little hesitant. DJIA up 68 at 10689, Nasdaq off 19 at 2009, and
S&P 500 flat at 1213. (TG)
1:49 (Dow Jones) Apple Computer's (AAPL) U.S. retail sales have been
particularly weak over the past two months, says Wit SoundView. But despite
the soft PC demand environment, Wit believes Apple is showing some signs of
solid execution. "With several catalysts on the horizon and with the company
in the middle of several new product cycles, we believe Apple shares have a
solid chance of outperforming the S&P 500 over the summer months," Wit says.
Reiterates buy rating. (TG)
1:33 (Dow Jones) Looks like U.S. merger and acquisition activity will post
its seventh consecutive month of sub-$100 billion in monthly volume in June,
a trend that hasn't occurred since the mid-90s, says Richard Peterson, chief
market strategist at Thomson Financial. M&A volume is at $20.2 billion
through June 15, versus $75.3 billion in May 2001 and $127.5 billion for
June 2000. (JAW)
1:24 (Dow Jones) The National Association of Home Builders' housing market
index edged up to 58 in June from a downward-revised level of 56 in May.
Consistent with a recent pickup in new mortgage applications, the index
shows home-building, at least, holding on, and possibly supplying the
economy with a little more strength to offset manufacturing weakness. (JM)
1:15 (Dow Jones) Note to Fed: Hurry up and stop cutting rates so stocks can
start moving higher! Merrill's Chris Callies says CFOs and corporate
decision makers might be using Fed policy as a signaling device, reasoning
that rate cuts imply poor business conditions (that makes sense.) If that's
the case, the end of Fed stimulus might be interpreted as a signal of an
inflection point in demand. "Thus the beginning of a new capital spending
cycle may arise from the end of a supportive Fed," she says. (TG)
12:58 (Dow Jones) Hilliard Lyons' technician Dick Dickson is starting to see
signs current correction could be close to an end. Support on DJIA is 10560,
1200 on S&P 500, and 2000 on Nasdaq Comp. One warning, though: a heavy
volume break and close below these levels will probably mean more downside,
in which case next targets would be 10300, 1180, and 1800. That's worst-case
scenario, he adds. (TG)
12:50 (Dow Jones) The number of IPOs is sharply lower this year when
compared with 2000, but Wall Street underwriters are making it up in deal
size. The average size of an IPO in '01, based on proceeds raised, is $548.3
million, according to ipo.com. Last year, the average deal raised $238.8
million. Still, the market is behind last year's pace. So far, IPOs have
raised a total of $21.9 billion. Last year, IPOs raised $105.2 billion.
(RJH)
12:37 (Dow Jones) Cendant (CD) said its link-up with Galileo International
(GLC) should give a nice boost to fiscal 2002 earnings - in the 10c to 14c a
share range. That's not enough to send Cendant's shares into orbit, but
buying Galileo will boost Cendant's travel operation. And if Galileo isn't
enough, Cendant is reportedly holding talks to buy another electronic travel
reservation outfit, Worldspan LP. (CCW)
12:28 (Dow Jones) Inflation may be contained but that's not necessarily good
news for corporations and credit quality, says Moody's. One reason prices
aren't rising is that corporations still have "weak pricing power." That may
translate into more Fed rate cuts, but it's also murder on corporate
profitability. (CSE)
12:18 (Dow Jones) PurchasePro.com (PPRO) fell as much as 9% after new CEO
Richard Clemmer announced layoffs of half the troubled B-to-B company's
employees. Clemmer is trying to refocus the Las Vegas company after an
embarrassing string of downward adjustments to 1Q results and the departure
of controversial company founder Charles "Junior" Johnson. Clemmer said the
layoffs, along with a "streamlining" of senior management, will help
PurchasePro move toward profitability. One wonders, however, how sales
efforts will fare with that many employees departing. (RS)
12:07 (Dow Jones) The Philadelphia Stock Exchange on Wednesday will begin
listing 23 new options on companies including Abercrombie & Fitch (ANF),
Bausch & Lomb (BOL), First Data Corp. (FDC), Reliant Energy (REI), Toys "R"
Us (TOY), Tenet Healthcare Corp. (THC), UAL Corp. (UL) and Whirlpool Corp.
(WHR). (KT)
11:59 (Dow Jones) As Henry Blodget sees things, it's either all or nothing
for AOL and Microsoft (MSFT) when it comes to Windows XP. He sees two
scenarios - talks resume again, or AOL begins to lobby aggressively against
Microsoft's plans for XP. Whether AOL's software is included in XP is of
little importance, he says. More important is extent to which Microsoft will
be able to execute ambitious plans for XP. (TG)
11:45 (Dow Jones) Salomon Smith Barney analyst Jonathan Litt downgraded
Crown American Realty Trust (CWN) to neutral from outperform based primarily
on the stock price. Litt said Crown, a REIT that owns regional malls, has
outperformed its peers over the past year with total returns of about 70%.
"We believe the easy money has been made and that the stock may move
sideways or modestly lower as shareholders take profits in the coming
months," he says. (JKM)
11:37 (Dow Jones) Stocks pulling back a bit. Fed comments don't help - sees
some inflation, can't keep cutting rates forever - but market didn't seem
too worried about this earlier in session. Hewlett-Packard (HWP) outlook cut
to negative by S&P, which can't be helping. GM, Wal-Mart and United Tech do
help prop up DJIA. Dow up 42 at 10666, Nasdaq off 11 to 2017, and S&P 500
flat at 1214. (TG)
11:27 (Dow Jones) In this first trading session after Expiration Friday, the
CBOE's index put/call ratio jumped to a high of 3.37 - with 36,932 index
puts traded to 10,972 index calls. This is a sign that many institutional
investors are using protective index puts to hedge their portfolios,
although contrarians consider this to be a bullish signal, when this ratio
rises above 1.50. But the put/call ratio for equity options remains neutral
at 0.51. (KT)
11:17 (Dow Jones) July Fed funds show 50/50 chance that Fed cuts by 50 BP at
June FOMC, trader says. Contract up 2.5 BP at 96.37, and earlier made
session high of 96.38. (SPC)
11:09 (Dow Jones) Traffic has been slow at Linens 'N Things (LIN), and
same-store sales are probably off 3% thus far in 2Q, Lehman Brothers analyst
Alan Rifkin estimates. He recently lowered his 2Q, 2001, and 2002 estimates,
but thinks they "may still need to be tweaked downward slightly." Street
estimates need to come down, too, he says. Nonetheless, better in-stock
positions, management and advertising are sparking increased store
productivity in both new and existing stores. Rifkin is keeping his strong
buy rating, especially for longer-term investors. (JMC)
(END) DOW JONES NEWS 06-18-01
02:23 PM
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