MARKET TALK: Ariba Defense Deal Not Exactly Blockbuster
Edited by Thomas Granahan
Of DOW JONES NEWSWIRES
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4:49 (Dow Jones) The Defense Department acknowledged Friday that its deal
with Ariba (ARBA), announced Wednesday, is a one-year agreement in which the
government agency is paying Ariba about $125,000. Although the original
announcement of the pact helped pull Ariba shares back from all-time lows
hit Monday, analysts at CIBC World Markets say the size of the deal makes it
"hard to justify" the bounce from the lows. Ariba finished Friday's session
at $4.64, down 1.5%, but up from Monday's all-time low close of $3.85. (RS)
4:13 (Dow Jones) Deutsche Banc Alex.Brown is musing over the possible
benefits of a strictly "hypothetical" merger of equals between Sprint PCS
(PCS) and Nextel Communications (NXTL). With six major players, heated
competition and limited spectrum, the wireless industry is ripe for some
consolidation, analyst Jeff Hines writes. Combined, Sprint and Nextel would
be the nation's second-largest wireless carrier, and would be required to
divest very little spectrum. But he adds there are hurdles, among them that
Sprint is a tracking stock. (CBN)
4:06 (Dow Jones) Tough way to end the week for stocks, which were soft most
of the day and weakened further late on fears of terror threat in Middle
East. Merck set the tone with profit warning, but there were plenty of other
candidates, though none as well known. Next week will be fun, as results
from the FOMC gathering aren't a sure thing - it's either a quarter or half
a point. Again, the language that comes with this cut will be huge. The end
of easier money may be near, though. DJIA drops 110 to 10605, Nasdaq eases
23 to 2035, and S&P 500 falls 11 to 1226 (preliminary). (TG)
3:54 (Dow Jones) Heartened by comments from Corning (GLW) Chief Executive
John Loose Thursday at its annual shareholders' meeting, Davenport & Co.
telecommunications analyst Drake Johnstone maintained his buy rating and $30
price target on the optical fiber maker's stock. "Loose indicated that
Corning's fiber optic business (58% of revenue and earnings) would be up
this year due to continued demand from local phone and cable companies and
from international carriers, especially China's top carriers," he said.
While Johnstone recently lowered his growth estimates for the company's
fiber business, he said Corning is attractively valued. (JDB)
3:40 (Dow Jones) HUD calls its first Internet loan sale "a huge success." It
auctioned $109 million of loans online - the largest such transaction yet
conducted by Uncle Sam on the Internet. (JCC)
3:32 (Dow Jones) After much speculation about a restatement, Computer
Sciences (CSC) filed a 10-K late Thursday that held few surprises. "The
filing should at least stop the market's feeding frenzy about accounting
irregularities/potential financial restatements," says SG Cowen's Moshe
Katri. Of course, now the market is free to worry about whether CSC will
issue another quarterly earnings warning. (MLP)
3:23 (Dow Jones) The camp remains "fairly split between 25 BP and 50 BP"
rate cut at next week's FOMC, economist notes. July Fed funds up 1 BP at
96.37, just 1/2 BP shy of mid-point, where odds for a 50 BP rate ease at
50%. (SPC)
3:17 (Dow Jones) Threat of terrorist instability in Middle East sending
flight to quality bid to Tsys, getting major bounce in late afternoon trade,
notes fund manager in NY. 10-year up 15/32, yield at 5.12%, 30-year up
25/32, yield at 5.57%. Stocks going in opposite direction - DJIA off 117 at
10597, Nasdaq down 25 at 2034, and S&P 500 falls 12 to 1224. (JNP)
3:12 (Dow Jones) Manugistics (MANU) CEO Greg Owens didn't get a raise last
year (just $750K in salary and bonus) or additional stock options. But that
doesn't mean he went without perks. The company gave Owens $35K for golf
club dues, $49K for personal jet travel and $30K to pay his taxes. Not that
Owens needs much charity. He realized $10.9M from exercising options and
still held options worth $96.5M at the end of February. He's taking a bit of
a hit Friday, though, with the shares off 30% at $25.54 on soft 1Q. (MLP)
2:59 (Dow Jones) It ain't over 'til the capital markets sing. George Bicher,
analyst at Deutsche Banc Alex. Brown, lowered his 2001 and 2002 estimates on
several of the commercial banks, given prolonged weakness in their capital
markets businesses, as well as rising credit costs. "We continue to like the
competitive position and growth potential of many companies, but we find
little to get enthused about in the short run," Bicher noted. He did say
Citigroup (C) stands apart from the rest as having "more durability in our
2002 estimates." (TAS)
2:50 (Dow Jones) Retail investors may be heading to the beach a little early
this year and online brokers are taking the heat. "June is shaping up to be
one of the worst months on record," said Richard Repetto, an analyst with
Putnam Lovell Securities Inc., in a report Friday. "The early indications
from the online brokers is that June trading volume was running down 17% to
20%, he said. (CWM)
2:44 (Dow Jones) Fed funds futures are "extremely good predictors" of Fed
monetary policy on day before FOMC meetings, according to Merrill Lynch.
Firm's research shows Fed funds contract is mispriced by just 6 BP 81% of
the time, and by more than 12 BP only 5% of the time. (SPC)
(END) DOW JONES NEWS 06-22-01
04:49 PM
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