MARKET TALK: If Calpine Needs It, Cash Will Be There
17 Jan 14:22
Edited by Thomas Granahan
Of DOW JONES NEWSWIRES
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2:22 (Dow Jones) Calpine (CPN) registered with the SEC to boost its mixed
shelf registration to $2.5 billion, but the company doesn't have an immediate
need to issue additional equity, a company spokeswoman said. "We want to have
the financial flexibility," she said. As a result of a recent recapitalization
effort, Calpine expects it has $4.4 billion of cash, credit, and expected cash
flow this year, which is just enough to meet its spending needs for the coming
year. (CCC)
2:15 (Dow Jones) Traders concerns that the Argentina peso would keep on
losing ground are proving valid. Thursday, the peso has weakened to
ARS2.05/USD, down from Wednesday's close of ARS1.85. EUR/USD is $0.8812;
USD/JPY is Y132.40; EUR/JPY is Y116.68. (JRH)
2:08 (Dow Jones) Enough about Enron (ENE), Argentina, and earnings. The
question that's really on investors' minds is: Who gets custody of the red
umbrella logo after Citigroup (C) spins off its Travelers Property Casualty
insurance unit? After all, the little emblem has its roots at Travelers Group,
which merged with Citicorp in '98 to create the present-day Citigroup.
So...it's going to stay at Citi. "I probably invested in more umbrella clothes
than all the people up there put together," Citi CEO Sandy Weill said,
referring to Travelers PC headquarters in Hartford, Conn. Travelers PC will
have to find a new corporate designation two years after the spin-off. (TAS)
1:56 (Dow Jones) Salomon Smith Barney economist Melanie Jani says that
following Thursday's stronger-than-expected jobless claims, January's
employment report should show a rise in payrolls, marking the first gain in six
months (JNP)
1:45 (Dow Jones) Yahoo's 12% gain has left the Internet services sector on
top of the 86 Dow Jones industry groups. Heavy construction, software, heavy
machinery, and trucking round out the top five. Tires, airlines, and biotech
are among the misbehavers. Tires, incidentally, are also the worst performer
over the last week, and among the worst over the past month. Since the close on
Jan. 7, Goodyear (GT) is off about 15%. DJIA up 113 at 9825, Nasdaq Comp higher
by 23 to 1967, and S&P 500 climbs 8 to 1136. (TG)
1:36 (Dow Jones) Fitch analysts say the insurance industry still has several
billions of dollars of asbestos exposure, but that it's a long-term problem and
manageable for property-casualty insurers. Worries about asbestos liability
were spurred last month after a Baltimore jury awarded $30 million ln a verdict
against Haliburton's (HAL) Dresser Industries unit for asbestos-related
injuries. (MCG)
1:26 (Dow Jones) Jefferies sees Lowe's (LOW) growing at a more rapid pace
than Home Depot (HD), which is why the firm downgraded HD to accumulate from
buy. Jefferies notes that Home Depot's share price is 20% higher than Lowe's
and that Lowe's shares are trading at a greater-than-30% PE/G discount relative
to Home Depot. The Dow component's shares "have a better than 20% upside
potential over the next 12 months," Jefferies says, but Lowe's shares have a
better than 40% upside potential during the same period. (GS)
1:10 (Dow Jones) EBay (EBAY) Thursday disclosed plans to raise a slew of fees
it charges sellers. While sellers may not like the changes, which take effect
starting Jan. 31, Wall Street analysts gushed about them. Anthony Noto at
Goldman says the changes could add an additional $6M to $8M in revenue per
quarter. Noto adds that eBay's revenue growth has trailed growth in the total
value of items sold at its sites. The increases, he says, should help close
that gap. EBay shares recently traded up 2% at $61.28 (RS)
1:03 (Dow Jones) SoundView says Apple (AAPL) shares are rangebound until
product transition risks are more clear. Buy in low $20s, unloadthem 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)
(END) DOW JONES NEWS 01-17-02
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