MARKET TALK: Inflows Return To High-Yield Funds
01 Feb 12:22
Edited by Thomas Granahan
Of DOW JONES NEWSWIRES
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12:21 (Dow Jones) High-yield bond mutual funds reported a $240 million inflow
during the week ended Jan. 30, regaining most of a $266 million outflow
reported last week, according to market data firm AMG Data Services. (JD)
12:11 (Dow Jones) Benchmark 10-year Japanese Government Bond still yielding
1.50% midday in New York Friday, its highest level since April 2001 and a sign
of escalating worries about possible further sovereign downgrades and deepening
woes of banking sector. The Topix stocks index now around its lowest level
since 1985. Japanese banks stated that bad, unrecoverable loans rose 13% in 3Q,
some U.S. strategists note, together with sharply declining popularity of Prime
Minister Koizumi, and Moody's stating in Asian trading time it anticipates
putting ratings of several Japanese life insurers on review for downgrade next
week. (JNP)
11:56 (Dow Jones) Like the blue-chip Dow Jones Industrial Average,
broad-market option volatility indexes such as the VIX have been volatile this
week, rising substantially midweek before falling back down by Friday. But in
the tech-sector, and away from the Enron-contagion fears, volatility has
continued to fall without much notice. The Amex's Nasdaq Volatility Index, or
QQV, closed Thursday at 35.82 - its lowest since the exchange began tracking
this fear gauge in September 2000 (as a comparison, its lowest finish all last
year was 38.38). QQV most recently edged up 0.28 to 36.10 but is still down 6%
for the week from already low levels. (KT)
11:45 (Dow Jones) It was a big month for metals. Gold was the best January
performer of the 86 Dow Jones industries, followed by nonferrous metals. Office
equipment, railroads, and trucking rounded out the top five. January wasn't so
kind to wireless, which fell better than 25%. Coal, pipelines, pollution
control and entertainment also didn't fare well. While the DJIA dropped 1% for
the month, the index remains 3.3% higher since the close on Sept. 10, 2001.
(TG)
11:27 (Dow Jones) The earnings recovery seems to be on track at Computer
Sciences (CCS), Goldman says. The company is benefiting from strong wins in
federal sector, sequential improvement in North American consulting ops,
improvements in outsourcing contracts, and strong cost controls. Keeps
outperform rating. Shares up 7.4% at $47.81. (TG)
11:10 (Dow Jones) Look for the weak seasonal trends of February to make their
presence felt, Lehman's Jeff deGraff says. There's still too much complacency
to suggest the bear is dead. The breadth figures haven't been strong enough to
say a long-term shakeout has taken place, ushering in a secular bull market.
That said, he does believe the aerospace and defense areas, where relative
performance has been good, have more room to move up. (TG)
10:59 (Dow Jones) Kmart (KM) was driven into bankruptcy when its suppliers
grew impatient about past-due payments and stopped shipping to its stores. But
while Kmart's fall was sudden, a general impatience for payments on receivables
isn't new, says David Huebner, president and CEO of D&B Receivable Management
Services. "This is part of a broader phenomenon that's developed over the past
four quarters," Huebner says. Worried about bankruptcies and defaults, clients
are seeking twice the amount of help they were last year to collect on accounts
less than six months old, Huebner says. But D&B data shows that the trend may
have found a bottom - an indication that the economy may have recently found a
bottom, too, Huebner says. In the meantime, watch out for a few more "lagging
indicators" - bankruptcies, that is. (JMC)
10:49 (Dow Jones) The Economic Cycle Research Institute's weekly leading
index increased for a fourth-straight week in the week ended Jan. 25. The most
indicative measure is the percentage change in the index from its 52-week
moving average. This had been negative from September 2000 through all of last
year, but moved into positive territory in the week ended Jan. 4 and has moved
higher each week since. It was up 2.1% in the latest week. (JM)
10:42 (Dow Jones) It seems Wall Street is still trying to make up its mind
about the earlier data. That, or folks are just resting following the big gains
of the past two sessions. Stocks have shown virtually no reaction to the big
numbers out this morning, most of it fairly encouraging. Pollution control
names are getting battered on Waste Management's weak 4Q outlook, while
biotech, precious metals and mining are the day's best performers. DJIA flat at
9918, Nasdaq flat at 1934, and S&P 500 off 3 at 1126. (TG)
10:31 (Dow Jones) U.S. Labor Secretary Chao says January unemployment report
suggests the economic outlook is improving. "I am cautiously optimistic about
the economy. I think it is bottoming out, but these numbers are not
conclusive," she says. The report showed the unemployment rate fell
unexpectedly to 5.6% as employers cut fewer jobs than they did in December.
(JVR)
10:19 (Dow Jones) A California judge on Jan. 18 issued a proposed decision in
the California PUC's ongoing proceedings to determine rates for bankrupt
utility Pacific Gas & Electric's generation facilities. The judge's proposed
decision would establish interim cost-of-service revenue requirements for the
costs incurred by Pacific Gas associated with its generation assets and power
purchased from third parties. The revenue requirement would be calculated based
on actual incurred costs. The judge's decision proposed an interim 2002 revenue
requirement of $2.875 billion for Pacific Gas, including fuel costs and
purchased power costs. PG&E (PCG) shares off 1% at $21.27. (BB)
10:04 (Dow Jones) The Institute of Supply Management (formerly NAPM)
manufacturing purchasing managers' index moved upto 49.9 in January from 48.1
the prior month. 50.0 is the threshold between an increasing and contracting
manufacturing sector. This number is just below the threshold, but the
components for new orders (55.3) and production (52.0) were above. (JM)
9:56 (Dow Jones) Morgan Stanley upgrades Micron Tech (MU) to outperform from
neutral, saying demand for DRAM is "much stronger" than expected. Analyst John
Cross said that if contract prices hold at $3.00, Micron could return to
profitability in the May quarter. Cross expects supply of DRAM to be tight in
2002 and 2003. Micron holds an analyst meeting later Friday. Shares up 2.5% at
$34.60. (DLF)
(END) DOW JONES NEWS 02-01-02
12:22 PM |
