MARKET TALK: Was That A Riverboat Casino?
23 Jan 12:00
Edited by Thomas Granahan
Of DOW JONES NEWSWIRES
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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)
11:08 (Dow Jones) A stealth offering priced overnight from Japan's Nidec
(NJ). The company, which makes precision motors, sold 400,000 ADSs on the NYSE
at $53.96 each through Daiwa and Nikko Salomon. The ADSs were part of a global
4.1 million share deal. Nidec listed its NYSE back in September, but, because
of the terrorist attacks, it postponed its actual initial domestic stock
offering until now. (RJH)
10:56 (Dow Jones) With the telecom shakeout reaching its end, the industry is
poised for a "fairly significant consolidation phase," predict CSFB's Dan
Reingold and Michael Winston. "We expect some very large mergers to be
speculated, indeed feared, by investors. In the long run, these mergers are
likely to reduce the number of players, soften pricing pressure, improve
footprints and efficiencies, and result in more rational oligopolistic
behavior, and hence improve valuations for the surviving players." In the short
term, however, near-term valuations on companies that may announce deals may be
hurt by the potential for regulatory delayand regulatory conditions, and
integration challenges, and the risk of execution over the long term, the
telecom analysts say. (JAW)
10:48 (Dow Jones) Merrill Lynch media analyst Lauren Rich Fine is hearing
anecdotal evidence about how the ad market is shaping up in the first quarter.
Her thoughts? "We have not heard anything to get truly excited about.." She
says telecom ad spending is picking up "a bit," while consumer packaged goods
companies' are spending heavily on new releases. Pharmaceutical spending, she
says, is "OK." Movie companies are spending heavily on new releases. Fine
predicts a "dearth of new product introductions," which is consistent with past
economic downturns. (BS)
10:35 (Dow Jones) Corporate bond market in very good shape this morning, says
Mark Humphrey, senior corporate bond trader, Wachovia Securities, Charlotte.
There is not a lot of supply, but plenty of cash on the sidelines. The "market
has showed an amazing ability to shake off bad news," said Humphrey. The Tyco
(TYC) restructuring "took a dark cloud," off the market, he said. (MCG)
10:22 (Dow Jones) A union pension fund is seeking shareholder approval to
declassify Starbucks' (SBUX) board. Under the proposal, declassification of
Starbucks board would allow shareholders annually "the opportunity to register
their views on the performance of the board collectively and each director
individually." The union pension fund owns about 44,800 shares of Starbucks'
common stock, less than 1% of the company's outstanding shares. The union
pension fund also said it believes a classified board structure serves to
protect the incumbency of the board and current management, and limits their
accountability to shareholders. (GL)
(END) DOW JONES NEWS 01-23-02
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