MARKET TALK: Speaking Of Contraction, Let's Talk Congress
22 Jan 16:20
Edited by Thomas Granahan
Of DOW JONES NEWSWIRES
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4:19 (Dow Jones) When asked Tuesday about Washington's prospects for a major
league baseball team, Fannie Mae (FNM) CEO Franklin Raines said Baseball
Commissioner Bud Selig has indicated that Washington "would be a leading
candidate for any team that would move." Raines, who is lobbying with other
area business leaders to relocate the Montreal Expos inside the beltway, said
RFK Stadium could be ready for baseball in as little as six weeks. (DMK)
4:11 (Dow Jones) Saying "this has been a manufacturing-led recession," NAM
Chief Economist David Huether said, "It is critical that Congress and the
Administration agree on an investment-led stimulus package now if we expect to
see a meaningful recovery by the second half of 2002." (JCC)
4:04 (Dow Jones) Stocks continue to slump, unable to overcome big
bankruptcies, soft earnings, poor technicals, and a tech sector that looks like
it's ready for more than a nap. Intel, H-P, IBM, SBC, and Microsoft the bottom
five names on the DJIA. Realization that the Fed's probably not moving also may
have played a role. Motorola reports tonight. DJIA off 57 at 9713, Nasdaq Comp
drops 47 to 1882, and S&P 500 loses 8 to 1119 (preliminary). It was the lowest
close on Nasdaq since Nov. 21 of last year. (TG)
3:54 (Dow Jones) While a CFO's resignation is often a red flag, signaling
trouble brewing beneath the surface, online gaming software provider
CryptoLogic (CRYP) says that's not so in its case. The resignation of CFO
Harvey Soloursh, announced Tuesday, is part of the company's shift from an
early-stage management team to a professional management team, the company
said. The shift began more than a year ago when Jean Noelting came on board as
CEO, replacing co-founders Mark and Andrew Rivkin, whoremain company directors
and major shareholders. Soloursh, the father-in-law of Mark Rivkin, had been
CFO since 1998. His daughter, Jennifer Soloursh , VP of marketing, is also
leaving the company. CryptoLogic is down 8% at $13.10. (SEW)
3:48 (Dow Jones) It seems hard to quibble with the kind of blow-out results
Amazon.com (AMZN) turned in for the 4Q. (What? Did you say GAAP profit?) But at
least two analysts - Morningstar's David Kathman and Prudential's Mark Rowen -
remained concerned about the company's "ETK" (electronics, tools and kitchen)
business, which saw revenue fall 2% year-over-year. Although Rowen praised
Amazon's ability to reaccelerate book, music and video revenue, he still
worries that Amazon may find it hard to make consumer electronics profitable.
He reiterates his $10 price target and hold rating. Shares up 23% at $12.56.
(RS)
3:38 (Dow Jones) Nokia's (NOK) April 25 calls traded more than 20,000
contracts as at least one institutional investor bought these. It isn't clear
what prompted the call buying, although Nokia announced new phone products
while at least one analyst suggested that the recent selling might have been
excessive. With Nokia ADS down $1.62 to $20.88, the April 25 calls fell 55
cents to $1.10 with 20,089 contracts traded at the Philadelphia Stock Exchange.
Open interest was 14,076. (KT)
3:33 (Dow Jones) There's been plenty of talk about similarities between the
DJIA from 1929-1932 and the Nasdaq Comp from 2000 to the present. John Roque,
of Arnhold & S. Bleichroeder, notes the DJIA had six failing rallies before its
ultimate low in July 1932. So far, if you figure the Nasdaq is on the same
course, it has had four such rallies. If the pattern holds true, the Nasdaq
should have some problems around these levels, though pullbacks should hold in
the 1750 area. Nasdaq Comp down 47 at 1883. (TG)
3:22 (Dow Jones) With shares of Extended Stay America (ESA) dropping 6.2%
after disappointing 4Q earnings and an underwhelming1Q outlook, Robertson
Stephens analyst Harry Curtis says there is limited upside in the near term.
The company's business model is more vulnerable to weakness in lodging industry
demand because of its dependence on corporate travel, says Curtis, who
maintained his market perform rating and $17 a share price target. The stock
fell to as low as $15.70 Tuesday. (DDO)
3:14 (Dow Jones) Earthlink (ELNK), the largest pure-play Internet service
provider, should meet analysts' expectations with its 4Q results, to be
released after the close Tuesday, says JP Morgan analyst Paul Noglows. He
estimated Earthlink lost 12 cents a share, excluding items, on $335 million in
revenue, compared with a loss of 40 cents a share on $286.8 million in revenue
a year earlier. Earthlink's dial-up subscriber growth will be sluggish. But
Noglows thinks a recent selloff in Earthlink shares, which he attributed to
concerns about increased competitive pressure and insider selling, has been
"overdone." Shares off 1.8% at $10.11. (PDL)
3:01 (Dow Jones) Deutsche Bank economist Peter Hooper is changing his
near-term Fed call. Now sees the Fed holding the line on rates at the FOMC
meeting next week, while still noting that the risks to the economy remain
balanced toward economic weakness. Fed Chairman Greenspan was not signaling a
further rate cut in his recent speech. News about the economy has been
improving recently and points to a bottoming. (MCG)
2:54 (Dow Jones) Fannie Mae chief Frank Raines says that "where the tech
bubble was built on hopes and dreams, the housing boom is built on real
consumer demand for a highly desired product, and a real, tangible,
appreciating asset." (JCC)
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)
(END) DOW JONES NEWS 01-22-02
04:20 PM |
