MARKET TALK: Stocks Turn South, Techs Lead Way
27 Feb 14:39
Edited by Thomas Granahan
Of DOW JONES NEWSWIRES
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2:38 (Dow Jones) No doubt a discouraging afternoon for the bulls. Robust
stock rally has faded, with techs leading the charge lower. Just more evidence,
certainly for the technicians, that the path of least resistance for this
market is lower. Communication tech, gold, and semis are among biggest losers.
Greenspan generally subdued, and durable goods perhaps a wash when looked at
with new home sales. DJIA drop 12 to 10102, Nasdaq Comp eases 16 to 1750, and
S&P 500 falls 2 to 1107. (TG)
2:28 (Dow Jones) Nikkei reporting that the BOJ will ease on Thursday, either
by hiking outright JGB purchases, or cutting the discount rate from already
extremely low level of 0.1%. Either move would have little impact, particularly
in wake of government's desperate effort on Wednesday. Apparently, the only
concrete measures in the govt's plan, besides pressuring the BOJ to ease,
appears to be aimed directly at propping up the Tokyo stock market - scaring
short-sellers and arm-twisting public fund managers to buy shares. (GMM)
2:11 (Dow Jones) IRS says unclaimed refunds totaling more than $2.3 billion
await about 1.7 million people who failed to file a 1998 income tax return.
"Time is running our for individuals to take steps to claim this money," says
IRS Commissioner Rossotti. "If no return is filed to claim the refund within
three years, then this money becomes the property of the U.S. Treasury." (JCC)
1:59 (Dow Jones) Though he contines to question whether the economy needs a
further economic stimulus from Congress, Greenspan says that more tax cuts
probably would stimulate the economy. (RSC)
1:48 (Dow Jones) ABN-Amro says that despite the continued rally in the
airlines, investors should continue to overweight the sector. The carriers with
the potential for the largest percentage gains would include the names ABN-Amro
considers the three weakest airlines - United (UAL), America West (AWA), and US
Air (U) - but mainly due to their low prices. Avoid those, because there's too
much risk, and concentrate on American (AMR), Delta (DAL), Northwest (NWAC),
Continental (CAL), Alaska Air (ALK), and Southwest (LUV). (TG)
1:33 (Dow Jones) UPS isn't the U.S. Army, so it might seem odd that defense
contractor Integrated Defense (IDE), today's IPO, would be developing a hybrid
electric system for the shipping company. It's not that much of a stretch,
though, since Integrated Defense CEO Thomas Keenan views UPS as a "paramilitary
organization" of sorts, given its extensive motor pool and logistics systems.
Don't look for too much other commercial business for Integrated Defense,
though, since Keenan says he wants to focus on the military project. (RJH)
1:19 (Dow Jones) Cisco (CSCO) shares are off 5% after Wachovia Securities
cuts its estimates of the networker's 3Q, which ends in late April. Analyst
Stephen Koffler cites continued capital spending cuts by telecom providers and
project delays by corporate customers. The stock could test its September low
of $11 if investors conclude 3Q sales will fall from 2Q levels, he says. It was
at $14.83 in recent trading. (PDL)
1:11 (Dow Jones) Mortgage application activity for the week ended Feb. 23 was
little changed from the previous week, with the MBA refinancing index falling
merely 0.3% to 1921.6 and the purchase index up 8.7% to 315.5. Analysts say
stable mortgage applications are expected, with just 4 BP drop in mortgage
rates last week. (JSX)
1:04 (Dow Jones) Accused in a lawsuit of making "incomplete or misleading
statements," Limited (LTD) denied wrongdoing, but offered additional details on
its rationale for its intended purchase of Intimate Brands (IBI). Limited said
two shareholder lawsuits were amended Feb. 8 to include the additional charges
about thecompany's previous disclosures, and denied it had misled investors in
a previous SEC filing and said it was not obliged to provide additional
information. It decided to give investors more information anyway. Limited said
Tuesday it believes that the deal is "strategically and operationally
compelling and that it will yield significant benefits" for shareholders of
both companies. LTD off 2% at $18.28. (BS)
12:53 (Dow Jones) Interesting news out of Asia last night: Williams Cos.
(WMB) pulled out of a consortium bidding for a stake in a pipeline that will
bring $9 billion of natural gas from Indonesia to Singapore, saying it didn't
meet its investment requirements. Williams' exit may hurt the consortium's bid
- led by PowerGas Ltd. - for Transco 1, which will operate the pipeline. Other
consortia bidding for the Transco 1 stake are Unocal (UCL) in partnership with
El Paso Corp. (EP); Korea Gas along with U.S. investment firm AIDEC Management;
and a group led by Malaysia's Petronas. (CRW)
12:41 (Dow Jones) "Enronitis," or excess off-balance sheet debt, apparently
isn't afflicting the restaurant stocks he tracks, Morgan Keegan analyst Robert
Derrington reports. After capitalizing operating leases of eight casual-dining
chains, he found that the average pro-forma return on invested capital declined
only modestly. Similarly, interest coverage (ratio of profits before payment of
interest and taxes to interest on bonds and other contractual long-term debt)
remained "solid" on Applebee's International (APPB), CBRL Group (CBRL), CEC
Entertainment (CEC), O'Charley's (CHUX), Darden Restaurants (DRI), Outback
Steakhouse (OSI), Panera Bread (PNRA) and Ruby Tuesday (RI), Derrington said.
(RLG)
12:29 (Dow Jones) The General Accounting Office released a report today
arguing for government intervention in the property terrorism insurance market.
"The report shows a detailed knowledge of the current terrorism insurance
situation and renews our expectations that the issueis too important to the
economy not to be resolved," Salomon Smith Barney says. (JSX)
12:21 (Dow Jones) Outspoken shareholder activist Evelyn Davis, who once
warned Morgan Stanley (MWD) that her ghost would appear at annual meetings, may
cross the Atlantic for this year's event. Very much alive, Davis says she's
considering attending the meeting, even though it's in London. She said she
won't make the final decision until a few days before the event. It's not the
money she's worried about, she said, but the hardships associated with
traveling there from Washington, D.C. She skipped Morgan Stanley' meeting last
year due to illness. (CWM)
12:06 (Dow Jones) Congress is in the process of voting on the Tauzin-Dingell
bill, which would in effect reverse much of the Telecommunications Act of 1996
that required the nation's dominant local phone carriers to open their networks
to lease to competitors, spawning dozens of now-bankrupt startup phone
companies. Verizon (VZ), SBC (SBC), BellSouth (BLS) and Qwest (Q) have lobbied
for the bill, which is expected to be approved by the House. Senate approval
isn't seen any time soon. (CBN)
(END) DOW JONES NEWS 02-27-02
02:39 PM |
