MARKET TALK: Greenspan's Done, Selling May Not Be
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
1:13 (Dow Jones) Stocks get minor lift after Greenspan wraps up. He didn't
really say anything to account for mid-morning selloff. Biotechs getting
slammed, and telecoms not much better. Lucent, Amazon, Exxon among big names
showing losses. Earnings, outlooks can't stem selling. Technicals no good,
though volume is light. DJIA off 117 at 10308, Nasdaq falls 20 to 1968, and
S&P 500 drops 13 to 1177. (TG)
12:58 (Dow Jones) Greenspan, asked by a senator if he disagrees with Kudlow
and others who say a liquidity crisis looms and that the word "deflation"
should be added to the popular lexicon, replied, "Yes, senator, I do
disagree." (JCC)
12:52 (Dow Jones) So much for hopes of an uptick in new mergers and
acquisitions in the U.S. June 2001 saw only 600 announced deals, the slowest
month since November 1993, when 582 transactions were announced, according
to Thomson Financial. July appears on pace for an even slower month, with
only 332 deals announced so far. (JAW)
12:39 (Dow Jones) The softening in energy prices is largely the result of a
drop in worldwide economic activity, and therefore demand, Greenspan says.
(MSD)
12:28 (Dow Jones) Greenspan is sticking to his guns on taxes, while
refraining from a specific endorsement of what's been done so far. "I did
think a tax cut was a desirable thing to do, and I still do," he says. (MSD)
12:26 (Dow Jones) Greenspan, assessing the global scene, tells senators "the
tinder out there, if I may use the term, is much less than there was in
1997. There are very few fixed exchange rate problems. The extent to which
debt was extended is much less. The reserves are better." (JCC)
12:20 (Dow Jones) Disappointed shareholders started a selling spree Tuesday
after Corvas International (CVAS) announced that Phase III trials of its
leading drug, rNAPc2, would be delayed until early 2002. The company had
guided investors to expect Phase III trials sometime in autumn. CEO Randall
Woods said the delay is the result of a recent meeting with the FDA. Issues
that came up concerned the design of the trials, not the effectiveness or
safety of the drug, he emphasized. Corvas shares are losing 31% to $7.56.
(EGS)
12:09 (Dow Jones) In a slow day, the forex market has not shown much
reaction to Greenspan's comments so far. The dollar has been a no show in
the Senate hearing. EUR/USD is $0.8749; EUR/JPY is Y108.50; USD/JPY is
Y123.98. (JRH)
12:05 (Dow Jones) Credit Suisse First Boston is the latest brokerage firm to
ban research analysts from buying securities of companies they cover.
Earlier this month Merrill Lynch & Co. (MER) prohibited its analysts from
doing the same. (CWM)
11:50 (Dow Jones) Greenspan believes the amount of capital gain in real
estate that has been extracted is small. Unrealized capital gains still
rising means wealth effect remains overwhelmingly positive. (JM)
11:45 (Dow Jones) August Fed funds down 1/2 BP as Greenspan Q&A continues.
Futures analyst says 25 BP cut still expected at August FOMC, but there's
"not much more built in beyond that." (SPC)
11:40 (Dow Jones) Greenspan says his economic outlook "does pre-suppose the
resurrection of measured productivity growth." (MSD)
11:38 (Dow Jones) Long-end Treasurys aren't getting much of a pick-up after
Greenspan's assertion that supply, not inflation, is behind their reluctance
to rally this year. Clearly Greenspan wants long rates to be lower to help
stimulate business and mortgage borrowing, and he's willing to dismiss
inflation fears as a reason that long-term rates are high. But can't make
the ultimate promise that would spark a rally: a promise that debt reduction
will continue indefinitely. (SV)
11:32 (Dow Jones) Greenspan remains optimistic on the role of new home
construction. Environment for construction is good and labor force is still
growing, fueling demand for housing - unlike Japan and Europe. (JM)
11:27 (Dow Jones) Two days before JDS Uniphase (JDSU) reports its fiscal 4Q
results, David Jackson, analyst at Morgan Stanley, cut his revenue targets
for JDS' fiscal 1Q and 2Q quarters, citing the drop in Nortel Networks' (NT)
long-haul optical systems business in the June quarter, and Nortel's
inventory of optical components. Jackson expects JDS to post 1Q revenue of
$400 million, down from company guidance of $450 million. He also lowered
his 2Q revenue estimate by $50 million to $400 million. Meanwhile, SG Cowen
suggested JDS' stock could suffer if Furukawa Electric sells some of its
stake in JDS to fund its share of the purchase of Lucent's (LU) optical
fiber business. (BED)
11:20 (Dow Jones) Softness in commodity prices is more a reflection of slack
industrial activity rather than the level of liquidity in the economy, and
there's little worry of deflation, Greenspan told senators. (MSD)
11:10 (Dow Jones) Score one for the new economy paradigm. Greenspan
reiterated his belief technological changes are boosting the underlying rate
of productivity and growth, and that those trends should continue even after
this difficult adjustment period. (MSD)
11:08 (Dow Jones) Sen. Bunning tells Greenspan that "I don't think we would
be having the problems we are now having if the Fed had acted sooner,"
adding that the last cut should have been 50 basis points, not 25. (JCC)
11:02 (Dow Jones) Standard & Poor's Lucent (LU) analyst Bruce Hyman has
recorded a voice mail message saying S&P will be issuing a statement on
Lucent later in the day. No indication whether this will involve any kind of
action or just an affirmation following earnings report. (CSE)
11:00 (Dow Jones) In response to probing from Sen. Sarbanes, Greenspan said
regarding monetary policy, "at the end of the day it does seem to be
effective" and that it's hard to sort out the effect of changes in short
term interest rates. (MSD)
10:56 (Dow Jones) Notify Technology (NTFY) received $4.5 million in proceeds
after completing a private placement of preferred stock and warrants. The
company said the proceeds from the financing enabled it to meet the net
tangible asset requirement set by Nasdaq for the continued listing of the
company's securities on the Nasdaq SmallCap Market. To maintain the listing,
Notify Tech must show minimum net tangible assets of $4.5 million in an SEC
filing, and its revised balance sheet, after the financing, showed about
$5.4 million of current assets. (CD)
10:47 (Dow Jones) More on Agere (AGRA)/Lucent (LU). Lucent says it might
hold a secondary offering of Agere shares if it's in the best interest of
its own shareholders, but keep one thing in mind: Investors didn't like
Agere at the time of the IPO, bidding down the stock out of the gate, and,
since that time Agere has announced its own profit warning. Also, many
Lucent shareholders had been counting on getting Agere stock - seeing the
potential in that unit as better than that of the parent. If the full
spinoff is shelved, investors might pour out of Lucent and just buy Agere
shares. (RJH)
10:39 (Dow Jones) Merrill's senior global debt strategist, Karim Basta,
switches his view for first time in two years on global inflation-protected
securities to bearish relative to nominal bonds. Cites dramatic change in
outlook for global inflation in last three months with "rapidly
deteriorating global economic climate" and commodities markets giving key
signals of declines in future inflation as indication inflation-protected
bonds may no longer outperform nominals. (JNP)
(END) DOW JONES NEWS 07-24-01
01:14 PM |
