MARKET TALK: Well, The Company Is Sucking Air
23 Jan 13:55
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
1:54 (Dow Jones) One distressed debt specialist says he is seeing Kmart (KM)
trade claims (claims from vendors) for air mattresses and vacuum cleaners. He
estimates that these claims would be priced about 10 cents below the company's
bonds, which are trading in the high 40 cents per dollar range. (MCG)
1:36 (Dow Jones) NAM President Jasinowski terms "right on the money" what he
calls Treasury Secretary O'Neill's "strong advice to Japanese leaders to
address their underlying economic problems related to productivity and
non-performing bank loans instead of artificially devaluing the yen."
Jasinowski voices hope O'Neill's statements in Tokyo "will be a wake-up call to
foreign exchange traders." (JCC)
1:20 (Dow Jones) Kmart's (KM) bankruptcy will have a material upside impact
on Wal-Mart's (WMT) earnings, Morgan Stanley says. Based on preliminary
calculations, Wal-Mart should gain an incremental 5c to 7c in EPS over 2002 and
2003. Given the substantial change in the discount-store landscape, Morgan
Stanley sees Wal-Mart as the major beneficiary of market share gain and upside
to current earnings forecasts. Other retailers that should benefit, to some
extent, are Dollar General (DG), Family Dollar (FDO), Target (TGT), and Toys R
Us (TOY). Wal-Mart up 2.2% at $59.34. (TG)
1:06 (Dow Jones) The euro is now breaking through the 88 cent level as
selling pressure is not easing, traders say. EUR/USD is $0.8799; USD/JPY is
Y134.39; EUR/JPY is Y118.29. (JRH)
12:57 (Dow Jones) Openwave's (OPWV) 4Q numbers were broadly in line, WR
Hambrecht says, though gross margins were a little light. The firm cuts
estimates and suggests investors stay away, however, until there are signs of a
meaningful uptake in wireless application protocol-based wireless Internet
services. Keeps neutral rating. Shares off 12% at $6.98. (TG)
12:40 (Dow Jones) Latest USD/JPY high for the day - Y134.60 - a new 39-month
high. EUR/USD is $0.8832; USD/JPY is Y134.38; EUR/JPY is Y118.70. (JRH)
12:29 (Dow Jones) Senate Minority Leader Lott, R-Miss., says he is "open" to
a scaled-back economic stimulus proposal offered by Senate Majority Leader
Daschle, D-S.D. but planned to first discuss it later Wednesday at a meeting
with Republican colleagues before deciding whether to go along. (JCD)
12:17 (Dow Jones) Salomon analyst Christopher Wiegand says that "by our
calculations, Treasury will be bumping up against the (debt) ceiling in
mid-March." (JCC)
12:00 (Dow Jones) Lehman concedes it missed the boat last year on
International Game Technology (IGT). The shares were up 42% in 2001, but Lehman
sees 2002 and 2003 showing a marked deceleration in growth vs. 2001. The firm
cites limited, or far off, sources of new growth, no evidence of accelerated
replacement cycle, and fewer placements of proprietary games. With shares
trading at 21 times Lehman's 2002 EPS view, it's too late to chase the stock.
Keeps market perform rating. Shares flat at $67.98. (TG)
11:50 (Dow Jones) The S&P 500's return on equity has slipped to 16.8% from
levels above 20% from 1995 to early 2000. The blame goes to a contraction of
S&P 500 profit margins, to the 1990-1991 recession low of 3.2%, down from 7.4%
in December 2000, according to a research note from CSFB's quantitative
analysis team. Given this scenario, the group screened for SPX stocks with
positive margins over the most recent reported quarter and which the firm rates
buy or strong buy, and came up with a list of names including King
Pharmaceuticals (KG), Kinder Morgan (KMI), Lockheed Martin (LMT), Noble
Drilling (NE), Pfizer (PFE), Fannie Mae (FNM) and Citigroup (C). It also
produced a list of companies with margin stability. (KT)
11:32 (Dow Jones) Excluding the bankruptcy of one of the nation's largest
retailers and a stunning restructuring by one of the country's largest
conglomerates, Wednesday's session has similarities to Tuesday's. What was
shaping up as a decent day early has faded a bit. Microsoft and IBM down again
(though Intel is higher and the SOX is up 2.4%), and the technical condition of
the major averages isn't great. Merrill's numbers aren't overly supportive,
either, though the stock is only off about 1.4%. DJIA off 5 at 9708, Nasdaq up
14 at 1896, and S&P 500 higher by 3 to 1122. (TG)
11:20 (Dow Jones) The euro has slipped further as ECB President Wim
Duisenberg repeats that current euro interest rates are appropriate for
economic conditions. EUR/USD is $0.8833; USD/JPY is Y134.10; EUR/JPY is
Y118.50. (JRH)
11:17 (Dow Jones) The nonprofit sector has at least two things going for it.
For starters, the sector is seeing the same kind of optimism about an economic
recovery as the business world, according to Internet marketing services
provider Kintera Inc. What's more, after 9/11, Americans have seemingly
rediscovered the importance of philanthropy in everyday life. "As more people
give, nonprofits will need more staff to provide programs and assistance to
those in need," Kintera said. A survey from Kintera shows 44% of nonprofits
plan to hire more staff this year, 36% expect to maintain last year's staffing
levels, and 20% plan to decrease staff. (TG)
(END) DOW JONES NEWS 01-23-02
01:55 PM |
