MARKET TALK: Saving Money? Senator Says Start At OMB
26 Feb 10:36
Edited by Thomas Granahan
Of DOW JONES NEWSWIRES
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10:36 (Dow Jones) Sen. Robert Byrd, D-W.Va., isn't the only lawmaker mad at
the Bush administration over it's fiscal 2003 budget proposal. Republican Sen.
Christopher Bond of Missouri threatens OMB staff jobs over Army Corp of
Engineers budget cuts, saying a good place to save money is by "eliminating the
positions at OMB" responsible for the Corp submission "since the Congress has
to totally rewrite it." The Army Corp is important to Bond's home state, which
borders the Mississippi River on the east side. (MHA)
10:27 (Dow Jones) July fed funds boosted by consumer confidence report, with
contract gaining more than 4 BP as rate-tightening expectations shift. Odds of
quarter-point total rate hike by end of June meeting now about 82% vs. roughly
100% Monday, says Merrill Lynch strategist. (SPC)
10:23 (Dow Jones) It's abundantly clear that Wall Street doesn't like those
confidence numbers. Major averages have retreated dramatically in the few
minutes since the release, which showed a surprising drop in confidence, not
something a shaky equities market and economy needs to be dealing with now.
After decent start, just four DJIA names are higher - H-P, United Tech, J&J,
and Wal-Mart. tech dominates the list of biggest losing sectors, and retailers
aren't too far behind. DJIA off 104 at 10042, Nasdaq Comp pulls back by 19 to
1750, and S&P 500 eases 7 to 1102. (TG)
10:15 (Dow Jones) Interesting news regarding eBay (EBAY) in the Pacific Rim.
It agrees to buy a Taiwanese internet auction site, marking its first expansion
into Greater China, but says it will pull out of Japan by the end of March. As
of late 2001, eBay was the top auction site in each of its 18 international
markets, excluding Japan, where competition has been fierce with Yahoo (YHOO)
Japan and Rakuten Inc. EBay shares off about 0.3% at $53.96. (CRW)
10:05 (Dow Jones) Consumer confidence unexpectedly slipped in February, and
present and future components also decayed. Conference Board's index fell to
94.1 in February from a revised 97.8 in January. Consensus estimate had been a
97.0 reading. Present situation index also fell to 94.8 from 98.1 in January,
and expectations fell to 93.6 from 97.6. This report is in large part
influenced by labor markets and employment, unlike University of Michigan,
which is more correlated with stock prices. (SV)
10:01 (Dow Jones) Emerson Electric's (EMR) orders for three months ended Jan.
31 were down 15% to 20% compared with the year-ago levels. The largest drop in
orders was its electronics and telecom division, which was down at least 30%
compared with the same period in 2001, reflecting the broad weakness in the
computing and telecom equipment markets. The company said the industrial
automation division was down 15% to 20%, reflecting continued widespread
restrained spending in the North American and European industrial goods
markets. In heating, ventilating and air conditioning, orders were down 10% to
15%, because of weak worldwide demand for residential air conditioning and
commercial and industrial refrigeration and air conditioning products. Shares
off 1.7% at $58.80. (JM)
9:49 (Dow Jones) Word out of Europe this morning that AES Corp. (AES) has
hired advisers to assess its U.K. assets, a move that could lead to the sale of
its Drax power plant. Facility's value is seen at GBP500 million-GBP900 million
(roughly $700 million-$1.3 billion); AES paid GBP1.8 billion for it three years
ago. AES shares up 1.2% at $4.91. (CRW)
9:45 (Dow Jones) Selling in Treasurys continues to be swift across the curve.
Traders say the sources of the selling is varied, led by mortgage-related
selling, speculative selling ahead of expected strong consumer confidence data,
rate-locking, risk that Greenspan will highlight improving economy tomorrow,
mammoth sale of two-year notes tomorrow, market technically retreating from the
top of its range, and so on. (SV)
9:39 (Dow Jones) Despite some high-profile problems for some borrowers,
Credit Suisse First Boston notes that second tier commercial paper outstandings
"are still within $4 of their January high, suggesting very few issuers have
lost access to the market." (MSD)
9:30 (Dow Jones) Revlon (REV) expects to take a charge of about $6 million in
the quarter ending March 31 related to separation costs for certain former
senior executives. Jeffrey M. Nugent, Revlon's former president and CEO,
resigned from the company Feb. 14. Revlon provided no further information
related to the charge. Last week, Cheryl Vitali, executive vice president and
general manager for global Revlon marketing, said she is departing voluntarily.
(DL)
9:20 (Dow Jones) Despite this morning's USD/JPY bounce to Y134.50, traders
continue to view dollar/yen as locked in a Y131.50-Y135 range, and believe that
this band could hold for sometime yet. EUR is $0.8680; USD/JPY is Y134.42;
EUR/JPY is Y116.69. (JRH)
9:14 (Dow Jones) Rumors about large-scale layoffs at Goldman Sachs (GS) are
overblown, says Prudential analyst David Trone. He says headcount reductions at
the firm are unlikely to reach 1,000 employees. (LC)
9:10 (Dow Jones) Merrill says retail stocks are at the very beginning of the
fourth phase of the retailing stock cycle, marked by superior relative earnings
driven by upside earnings surprises. The just-ending third phase was
characterized by declining interest rates, but strong relative performance in
the face of falling sales and earnings estimates. Seasonally, retail stocks
have outperformed the market in the 1Q 74% of the time over the last 38 years,
86% of the time over the last 14 years and 100% of the time during the past
five recessions. (TG)
8:57 (Dow Jones) Lehman Brothers recently completed a study of 35 S&P500
large-cap names with 1995 sales of $20 billion, 18 of which were organic growth
firms and 17 which were growth-by-acquisition companies. Its conclusion is that
each company's execution of its chosen growth strategy, and not the growth
strategy per se, had a greater impact on relative performance. The average
annual sales growth of organic companies was lower than acquiring companies,
6.6% vs. 8.6%. The higher growth, however, was less predictable. (TG)
8:47 (Dow Jones) UBS Warburg ups Albertson's (ABS) to hold from reduce based
mostly on continued weakness in the shares. Quite a vote of confidence. Firm
says the upgrade does not reflect what the firm views as an improved outlook
for the company as a result of any strategic developments. Now that the shares
have reached UBS' price target of $28, they are appropriately valued. (TG)
8:38 (Dow Jones) ABN-Amro cuts Qualcomm (QCOM) target to $43 from $52, citing
the extremely negative sentiment in wireless (yeah, we've heard a little
something about that), combined with brokerage firm's decreased operating EPS
view. Doesn't see a lot of downside at current level, but feels stock will stay
in range of $35-$40 for a while. Keeps add rating, based on recent price
decline and strong competitive position in wireless. Shares closed Monday at
$35.91. (TG)
8:30 (Dow Jones) If recent history - as in the last week or so - is any
indication, it may be tough for major averages to surge further. Then again, it
has been two big sessions in a row for blue chips, and Home Depot's (HD) 4Q
results and 1Q view should lend a hand. EBay wants out of Japan, while
Hewlett-Packard (HWP) and Compaq (CPQ) get a 'no' vote from a fairly sizable
H-P holder. Key reading on consumer confidence for February due out, a good
warm up for Wednesday's huge economy-related developments - durable goods, new
home sales, and Greenspan appearance before the pols. Major averages look flat
early, as do Treasurys. (TG)
(END) DOW JONES NEWS 02-26-02
10:36 AM |
