DJN: DJ MARKET TALK: Short-Term Issues For Economy - O'Neill
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
10:06 (Dow Jones) Treasury Secretary O'Neill says the quick return of the
markets should be a cause for happiness, although he does note that economy
faces uncertainties over the short-term. (MSD)
10:00 (Dow Jones) Greenspan warns the U.S. economy will suffer "significant"
short-term harm from the terrorist attacks last week, possibly by causing
investors to disengage from financial markets and consumers to stop
spending. But in testimony to the Senate Banking Committee, Greenspan said
the country's long-term economic prospects haven't been dimmed much by the
attacks.
9:48 (Dow Jones) Nevada Power, a unit of Sierra Pacific Resources (SRP),
sees its deferred energy costs totaling between $800 million and $900
million by Dec. 1. On that date, Nevada Power has to file an application
with the Nevada PUC to seek recovery of the costs through rate increases in
the next three years. Nevada Power had deferred energy costs of $489 million
as of July 31, compared with $272.8 million at the end of June. The deferred
costs represent operating expenses utilities can't recover from customers
due to regulated energy rates. (RG)
9:36 (Dow Jones) Bear Stearns' securities analyst Amy Butte says the World
Trade Center tragedy and subsequent suspension of trading for four days is
likely to have a 5.9% pretax impact on 2001 earnings for the indsutry. "The
combination of lower revenue assumptions plus an expected 'sympathy' delay
in addressing overcapacity, will put incremental pressure on earnings and
returns across the industry," Butte said. (CUB)
9:26 (Dow Jones) Keep underweighting the telecom equipment sector for the
next six months, says ABN Amro's Ken Leon. Cuts 2002 capex estimates to
decline of 27% from 10%, and says economy and industry overcapacity will
negate an upturn in 2002 for network infrastructure in broadband optical and
internetworking systems. (TG)
9:14 (Dow Jones) Global bond strategists continue to emphasize new factors
are at play in figuring out where sovereign debt markets might head next.
"Immense uncertainty has rendered any attempt to analyze market valuations
from a quantitative perspective somewhat pointless," says Tim Bond, chief
global fixed income strategist at Barclays Capital in London. Market trends
will be "governed by" the market's perception of how any military actions
unfold and the severity of continuing terrorist threats, Bond adds. (JNP)
9:05 (Dow Jones) Thursday's forex action so far has been focused on the yen,
with traders willing to keep buying the currency despite potential
intervention threats from the BOJ. With the euro flat, euro/yen is now off
more than 1% on the day. EUR/USD is at $0.9266; USD/JPY is at Y116.36;
EUR/JPY is at Y107.84. (JRH)
9:00 (Dow Jones) Darden Restaurants (DRI), which beat Street expectations in
its fiscal first quarter, continues to impress Credit Suisse First Boston's
Janice Meyer. The analyst cites falling seafood costs as a way to offset
other cost pressures. And while dining out may be on hold for many after
last week's events, "we think the core fundamentals remain attractive," she
says. (RLG)
8:54 (Dow Jones) NetGenics said it is withdrawing its pending initial public
offering of 5.5 million shares. The company said the registration statement
is being withdrawn because of "market conditions." NetGenics originally
filed its IPO with the SEC on March 13, 2000. NetGenics, based in Cleveland,
provides bioinformatics solutions. (BC)
8:49 (Dow Jones) Most of the decline in housing starts in August was in the
usually volatile multi-family sector, which fell 22.7% in August after
rising 13.2% in July. Single-family housing, on the other hand, slipped 2.4%
in August after declining 1.1% in July. The sharper decline in the rental
sector reflects the temporary aspect of July's increase. (JM)
8:45 (Dow Jones) In adding Wal-Mart (WMT) to Recommended List, Goldman Sachs
cites strong conviction that stock will outperform S&P 500 over next 6-12
months as market contends with high levels of international uncertainty,
likely drop in consumer confidence and domestic economic activity, and a
desire for earnings stability and trading liquidity. Stock's not cheap, but
Goldman sees either defensive outperformance in continuing bear market, or
stock as beneficiary of potential rebound in coming months. (TG)
8:39 (Dow Jones) Housing starts fell by 6.9% to an annual rate of 1.527
million units in August, much weaker than expected. This takes away one more
prop from which the economy had benefitted. (JM)
8:37 (Dow Jones) After jobless claims come in down 49,000, much more than
the 3,000 decline expected, benchmark Tsys lose a little ground. 10-year
yield up 1 BP since data to 4.69%. And housing starts show a bigger fall
than expected in August, not helping Tsys at this point. (JNP)
8:34 (Dow Jones) Jobless claims fell by 49,000 to 387,000 in the week ended
Sept. 15. This was the week that included the terrorist attacks on the WTC
and the Pentagon and, so, this may have represent some "CNN" effect in which
claimants held back from going to the unemployment offices. (JM)
8:30 (Dow Jones) It appears at the moment that Wednesday's impressive
late-day rally doesn't count for much. Stocks here are going to face another
big drop at the open, and Europe's not helping - major averages there are
getting hit pretty hard. Estimates cut at McDonald's (MCD), FedEx (FDX) tops
views easily. Loads of data to look at, and a host of Fed chiefs speaking.
Yield on long bond edging higher. (TG) |
