MARKET TALK: Apple Won't Fall (Or Rise) Far From Tree
17 Jan 13:03
Edited by Thomas Granahan
Of DOW JONES NEWSWIRES
(Call Us: 201 938-5299; All Times Eastern)
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1:03 (Dow Jones) SoundView says Apple (AAPL) shares are rangebound until
product transition risks are more clear. Buy in low $20s, unload them above
$26. The company's March revenue guidance will bring the consensus up, but risk
factors are weakness in education and product transition. The company also
indicated that the new iMac may have lower margins than old iMac, the plan
being that aggressive pricing will accelerate sales. Shares, up 7% at $22.21,
rated buy. (TG)
12:50 (Dow Jones) Fannie Mae (FNM) wins 2002 'Catalyst Award' for its
commitment to advancing women in the work force. The mortgage finance giant
says women make up more than half of its workforce. (JCC)
12:39 (Dow Jones) "The path to profitability for AMR is likely to take longer
than we had expected," says Goldman Sachs, which downgrades the stock to market
performer. The firm doubles its 2002 estimated loss and halves its 2003
estimated profit, despite AMR reporting 4Q losses "modestly smaller" than
Goldman's estimate. "AMR's stock has recovered more of its post-attack declines
than either CAL, DAL, and UAL." Shares off 4.8% at $24.76. (GS)
12:32 (Dow Jones) Fed funds futures showing chances of rate cut at Jan. FOMC
now around 30%, down from around 40% in Thursday morning trade. What's changed
since? The strong Philadelphia Fed business outlook survey. (JNP)
12:22 (Dow Jones) Time to refinance. Homeowners now have a second chance with
the 30-year fixed-rate mortgage averaging 6.83% for week ending Jan. 18, down
from 7.06% last week, said Freddie Mac. The average for 15-year fixed-rate
mortgage fell to 6.31%, from 6.55% and one-year Tsy-indexed adjustable-rate
mortgages averaged 5.08%, from 5.26%. (JEH)
12:05 (Dow Jones) Merrill Lynch raises recommended global allocation to 60%
bonds from prior 20% and cuts global stocks allocation to 40% from prior 80%.
"We expect to raise the bond allocation further in the weeks ahead," says
Walter Murphy in a Global Market Analysis comment. (JNP)
11:54 (Dow Jones) Shares of PC and PC chip makers got a little boost Thursday
thanks to stronger-than-expected 4Q results that brightened the companies'
outlooks. Although the 1Q is traditionally the industry's weakest, Wall Street
analysts were encouraged enough by the 4Q to raise 2002 earnings estimates, but
simultaneously warn of risks. (EGS)
11:46 (Dow Jones) We could get into trouble with this one if we weren't
careful: A sleeve of golf balls carrying the Enron (ENE) logo is going for
about 80 bucks a pop on eBay. Granted, they're Titleists, but that seems a
little steep, doesn't it? The seller says they'll "definitely be a collectors
item." Not unlike the shares, perhaps. By the way, it would take about 120
Enron shares to buy at the sleeve. (TG)
11:36 (Dow Jones) Underwriters have less IPO supply to work with this year.
There are 42 U.S. companies in the IPO backlog, hoping to raise $9.9 billion,
according to Dealogic. This time last year, there were 150 deals hoping to
raise $26.8 billion. Of course, most of those deals never saw the light of day.
(RJH)
11:23 (Dow Jones) J.P. Morgan downgrades Sonus Networks (SONS) to market
performer from long-term buy "on the back of increasing financial woes of
certain of its key customers and continued weakness in overall carrier
spending. We believe SONS shares are fundamentally fairly valued at current
levels, but takeover speculation could drive further stock price appreciation."
SONS shares off 15% at $4.20. (GS)
11:13 (Dow Jones) Even though Wall Street's estimates are a bit aggressive on
Qualcomm (QCOM), UBS Warburg analyst Jeffrey Schlesinger initiated coverage of
the company Thursday with a buy rating. "Most of the bad news is likely in the
stock," he says. "As a result of the company's strong intellectual property
position, we view Qualcomm as a winner longer-term." If the company lowers
guidance to a more realistic range, Schlesinger believes the stock could move
higher following the company's 1Q earnings report Jan 24. (JDB)
11:01 (Dow Jones) Morgan Stanley insurance analyst Alice Schroeder cut her
2001 estimates for PartnerRe Ltd. (PRE), XL Capital Ltd. (XL), and Hartford
Financial Services Group (HIG) to reflect their potential exposures to Enron's
(ENE) collapse. She lowered her outlook for PartnerRe to a loss of $3.95 a
share from a loss of $3.60 a share, cut here expectations for XL Capital to a
loss of $2.73 a share from a loss of $2.30 a share and lowered outlook for
Hartford Financial's earnings to $2.97 a share from $3.05 a share. (CUB)
10:50 (Dow Jones) The euro is again back at $0.8800, the level it briefly
broke in European trading, when the day's low at $0.8792 was set. EUR/USD is
$0.8799; USD/JPY is Y132.10; EUR/JPY is Y116.34. (JRH)
10:46 (Dow Jones) Genentech's (DNA) 2002 financial guidance did not surprise
the Street. Yet, some analysts are raising their earnings projections: in
certain cases to be closer to consensus of 91 cents a share, where Genentech
expressed comfort, and in at least one other case, to make a bullish call. U.S.
Bancorp Piper Jaffray analyst Mark Augustine and CIBC World Markets analyst
Matt Geller raised their respective 2002 estimates to 90 cents. Merrill Lynch
analyst Eric Hecht, though, hiked up his earnings estimate, which was already
higher than consensus, increasing his earnings forecast to 95 cents from 93
cents this year, $1.20 from $1.18 next year, and $1.61 from $1.60 in 2004, as a
result of continued growth of cancer drugs Rituxan and Herceptin and the
anticipated contribution form experimental cancer therapy Avastin. Shares down
1.9%. (BMM)
10:33 (Dow Jones) With Kmart (KM) announcing a management shakeup, but not
the anticipated bankruptcy filing, the company'shard-hit bonds have recovered
several points in early volatile trading. The 9 3/8% notes of '06 have traded
between 45 and 55, up from 40 to 50 the day before. The 9 7/8% of '08 are also
up 3-5 points at 55 bid, 58 offered. Shares up 2c at $1.63. (RTB)
10:24 (Dow Jones) SG Cowen is raising its price target on Abbott Labs (ABT)
to $63 from $59, saying its latest 4Q showed stronger-than-expected organic
growth. While there were some concerns - slower diagnostic sales view and
weakness at its Knoll pharma business - overall the company should post 2002
sales growth of 11% to 12%, analyst Scott Wilkin says. Shares flat at $56.43.
(RJH)
10:15 (Dow Jones) Stocks are higher, but not exactly instilling confidence.
Major averages are already way off highs, and a move lower seems in the cards.
At the moment, just four DJIA components - SBC, DuPont, Home Depot, and 3M -
are lower, the latter getting hit by another 3% after Wednesday's big selloff.
GE on top of Dow after hitting views, and Citi and IBM also act well. Data bode
well for economy, if not for another rate cut. DJIA up 31 at 9744, Nasdaq Comp
adds 10 to 1954, and S&P 500 higher by 3 at 1131. (TG)
10:08 (Dow Jones) Continental Airlines (CAL) expects to end the 1Q of 2002
with a cash balance of $750 million to $800 million. Continental also said its
cash balance target for year-end 2002 is $1.5 billion. The company ended the 4Q
with $1.1 billion in cash. Continental reported a net loss of $149 million for
the 4Q and a loss of $95 million for the year. Shares off 4.5% at $29.70. (CC)
(END) DOW JONES NEWS 01-17-02
01:03 PM |
