08:17 ET Solly: bank stock selloff is overdone
Salomon Smith Barney says that post-Enron credit risk is already reflected in bank stock estimates and that the selloff is overdone; finds compelling risk/reward in JPM, BAC, and ONE as these co's have the most upside in an improving economy; banks that are less sensitive to the economy are CF, FITB, MTB, TCF, SOV, and WFC.
09:12 ET Crude oil prices declining
The futures are working on a four session losing streak and are weaker once again in overseas/pre-market trade. A unit of the DOE is projecting lower than previously expected demand for the first six months of the year. Also, while compliance has improved, OPEC members are still producing at above quota levels.
07:35 ET CSCO Cisco Systems: ISIL, IDTI, CY to benefit from CSCO results (18.61)
Merrill Lynch says that CSCO's results were good news for wireless LAN maker ISIL and Catalyst switch suppliers IDTI and CY. ISIL is CSCO's sole supplier of wireless LAN chipsets and should benefit from increased penetration of wireless LAN technology into the enterprise mkt; and CSCO's announcement that it is gaining share in the enterprise mkt with its Catalyst switches is pos for IDTI and CY, as these co's are the primary and secondary suppliers, respectively, for these switches.
07:24 ET WSJ: Fannie Mae and Freddie Mac coming under scrutiny for derivatives
The WSJ says that FNM and FRE need to convince skittish investors that their hard-to-decipher financial statements and heavy use of volatile derivatives are not new sources of risk in the post-Enron/Tyco era. With a new accounting rule adopted last year that mandates quarterly reporting of the value of derivatives, the value of those contracts has swung, leading to unprecedented volatility in earnings and shareholder equity |
