MARKET TALK: One Stock, Many Views On Intel
22 Jan 14:47
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
2:46 (Dow Jones) Shares of Intel (INTC) fell 5% as investors sold off a stock
that analysts described as pricey. Scott Randall, an analyst at SoundView
Technologies, said Intel's multiple is a concern given the company's long-term
growth prospects. He said reality has set in with investors, which is why the
stock is selling off. Still, Douglas Lee, an analyst at Banc of America
Securities, said Intel's current stock price represents a "good buy." He said
the stock is performing better relative to other stocks in the sector. (DLF)
2:32 (Dow Jones) Enough is enough, says Merrill's Eric Hecht, who expects the
biotech index to turn around this year. Viewing good fundamentals and
reasonable valuations in the sector, he says the Nasdaq biotech index could
appreciate as much as 30% by the end of this year, a move that some may find
hard to believe given the index has fallen 16% year-to-date. "Since March 2000,
the biotech index is down 50%...we think that's enough," said Hecht. Favorite
names include Amgen (AMGN), Genentech (DNA), Genzyme Corp.- General (GENZ),
Idec Pharmaceuticals (IDPH), MedImmune (MEDI), Serono SA (SRA), Abgenix (ABGX),
Adolor (ADLR), Celgene (CELG), CV Therapeutics (CVTX), Icos (ICOS), Inhale
Therapeutic Systems (INHL), Medarex (MEDX), Regeneron Pharmaceuticals (REGN),
and Vertex Phamaceuticals (VRTX). (BMM)
2:18 (Dow Jones) It may be just a penny, but Amazon.com's (AMZN) first profit
ever may finally win over skeptics in the once welcoming convertible market.
"If the company continues to post positive numbers, convertible investors - to
the extent that they've left - will come back," says Jefferies managing
director Jonathan Cunningham. The 4.75% convertibles of '09 were up 3.5 points
at 55.75, still out of the money but attheir highest level since May 2001.
Shares up 23% $12.49. (RTB)
2:07 (Dow Jones) In a bid to avert a strike by mechanics, United Airlines
parent UAL is expected Tuesday to accept a presidential panel's recommendations
for a labor agreement, which calls for a 37% pay increase. The
financially-struggling carrier, analysts bet, would then begin talks with all
unions about wage concessions in order to stay afloat. The talks would be
difficult, and United may not get the concessions given its long history of
poor labor relations. Losses would pile up in the meantime. Reflecting such
concerns, UAL stock recently traded off $1.76, or 11%, at $14.24. (SON)
1:56 (Dow Jones) The Naz Composite has slipped under 1892.88 support. That's
not conclusive for the index unless it's confirmed by a close under the number.
However, observers had better build a dip to 1806.88 into their vacation plans,
especially because DJIA is still vulnerable to a dip into he 9400 handle.
Nasdaq Comp off 39 at 1891. (SC)
1:51 (Dow Jones) Thursday's upcoming McDonald's (MCD) earnings should mark
the beginning of the end of bad news, Merrill Lynch suggests. "We expect (the
report) to provide a signpost to investors that EPS visibility has bottomed and
that Street estimates are done going down," analysts Peter Oakes and Scott
Waltmann write. They also look for Europe to provide a "meaningful boost" to
this year's results. Shares up 1.8% at $26.90. (RLG)
1:39 (Dow Jones) Add Georgia-Pacific (GP) to the list of stocks whose
defensive puts are trading fairly fast and furious Tuesday. The stock skidded
16.5%, or $3.86, to $19.50, hit by a J.P. Morgan downgrade and dumped by
Willamette (WLL) for Weyerhaeuser (WY). Volatility of the February at-the-money
puts rose to more than 80%, compared with historical levels of 48%. The
February 20 puts traded 4,149 contracts, compared with open interest of 2,342,
and jumped to $1.95 at the Philadelphia Stock Exchange. At the ISE, these puts
were up $1.30to $2. (KT)
1:31 (Dow Jones) First Enron (ENE/ENRNQ), now Kmart (KM). Salomon Smith
Barney expects the NYSE to delist Kmart within 30-120 days. "We expect KM
shares to trade less than $1 through the reorganization process, which appears
likely to last 12-18 months. Under NYSE rules a stock can trade less $1 for 30
days before it will consider a delisting, but this can be negotiated." KM off
55% at 78c. (GS)
1:09 (Dow Jones) Since March Nasdaq crossed "best near-term support" floor
traders pegged at 1521, contract now looking to 1510 for next key level.
"Technicals are still to the downside," broker says. Cash market still looking
soft after early gains - DJIA down 11 at 9760, Nasdaq Comp off 33 at 1897, and
S&P 500 falls 4 to 1123. SOX off 3%, with Intel at bottom of the DJIA.
Technicians say Nasdaq support was resting around 1910. (SPC/TG)
12:59 (Dow Jones) So far, the 23% of the S&P 500 companies that have reported
earnings as of Friday have shown a year-over-year decline of 21.6%, says
earnings tracker Thomson Financial/First Call. If the remaining 77% follow the
trends of the first 23%, it would imply a decline of about 20%. That may look
better than the 3Q, but it's not when you remember the year-ago comparisons for
4Q01 are much easier than 3Q01. After adjusting for seasonal factors, "it would
appear that 4Q01 earnings will be about 14% below those of 3Q01." (GS)
12:50 (Dow Jones) After trying in vain to get the Street to focus on its
relatively strong operations amid a swirl of rumors, Tyco (TYC) has done
something dramatic to get investors to listen -- and it's working. The
conglomerate, laboring under a sagging stock price, decided to split into four
independent businesses. The stock is up 4% on the news. But that might not be
the end of the fun. Some analysts are already noting that some of the units
could be sold outright rather than spun off, if third parties -- can you say
GE? -- make overtures. (CCW)
12:39 (Dow Jones) The Blue Light may be out at Kmart (KM), but not for some
of its suppliers. Granted, makers of toothpaste, shampoo, cosmetics and other
household and personal care items may take a slight hit to sales and earnings
in the wake of Kmart's filing for bankruptcy protection, but Merrill Lynch
analyst Kathleen Reed estimates the "overall impact will be minimal to the
consumer goods manufacturers." Why? Consumers shop elsewhere for such staple
products. (CEG)
12:28 (Dow Jones) Lucent (LU) may have called a bottom, but that news didn't
help communication chip stocks, most of which traded lower Tuesday. While
Nathaniel Cohn, an analyst at Goldman Sachs, called Lucent's commentary
"encouraging" he said investors are waiting to see what the chip companies say
when they report earnings this week. Slated to report Tuesday are Applied Micro
Circuits (AMCC), which was down 1.2%, and Vitesse Semiconductor (VTSS), which
was off 0.8%. Broadcom (BRCM), which recently trade down 6%, is on tap for
Wednesday and PMC-Sierra (PMCS), which was off 3.7%, reports Thursday. (DLF)
(END) DOW JONES NEWS 01-22-02
02:47 PM |
