MARKET TALK: 1Q GDP Will Look Like Good Old Days
28 Feb 12:51
Edited by Thomas Granahan
Of DOW JONES NEWSWIRES
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12:50 (Dow Jones) Merrill Lynch says with the upward revision to 4Q growth,
1Q GDP will now likely stand at 3.5%, and that 4Q productivity will be revised
from 3.5% to 4.0%. That 4% productivity rate will likely hold into the 1Q as
well, Merrill Lynch says. (MSD)
12:39 (Dow Jones) Even though Alliance Gaming's (ALLY) stock has been dancing
near its 52-week high, Goldman Sachs analyst Steven Kent says there is upside
potential in the shares. The strong pipeline of games to be introduced over the
next 12 months should drive the slot business. Alliance's new operating systems
also allow the slot machines to be more competitive with other manufacturers,
he said. (DDO)
12:30 (Dow Jones) It is time to "take back your recession call," ClearView
Economics' Ken Mayland says to the NBER in an open letter. He says whatever
slowdown occurred simply was of insufficient duration to meet the true
definition of recession. (MSD)
12:19 (Dow Jones) The dollar's gains on the morning's strong data have
dissipated, and euro and Swiss franc are back at their daily highs versus the
dollar even as the Dow heads up. What's going on? The market hasn't forgotten
the Greenspan factor, says Erste Bank's Joe Francomano. "The market had built
up a long dollar position expecting a rosy scenario" which the Fed chairman
simply didn't deliver, he says. That's overshadowing data for now and causing
traders to square up positions. EUR/USD at $0.8972. USD/JPY at Y133.95. (JEN)
12:05 (Dow Jones) If you've finished off that latest John Grisham tome and
are looking for something new to read, here's a hot tip: the National Bureau of
Economic Research website just published a new working paper with the title
"The Effects of Website Provision on the Demand for German Women's Magazines."
Happy reading. (MSD)
11:50 (Dow Jones) Philip Morris (MO) Chairman and Chief Executive Geoffrey
Bible realized $44.3 million in profits from the exercise of stock options in
2001. Bible earned a salary of $1.9 million and a bonus of $3.3 million in the
year ended Dec. 31, compared with a salary of $1.8 million and a bonus of $3
million the previous year. Bible also was granted 1.8 million stock options in
2001, compared with 1.4 million options the previous year. The newly granted
options have exercise prices ranging from $47.765 to $51.20 a share and expire
between June 25, 2004, and Jan. 31, 2011. MO up 0.4% at $52.48. (RG)
11:32 (Dow Jones) Cue the Rod Serling voiceover: SVT Inc. (SVTV) dumped Ernst
& Young as its auditor and hired...Arthur Andersen. SVT, which was formed
through a recent merger and is involved in software development in India and
the U.S., said Ernst & Young's opinions on the predecessor firm didn't include
any adverse opinions or disagreements. SVT shares were recently changing hands
at $5. (CRW)
11:25 (Dow Jones) Merrill Lynch analyst Jay Cohen says investors shouldn't be
concerned by a brewing dispute between Chubb (CB) and one of its surety bond
customers, UtiliCorp United (UCU). Chubb has asked UtiliCorp to provide
collateral for $570 million in surety bonds. "While we see this as a large
amount, we do not know what the exposure is net of reinsurance," Cohen says.
"In addition, the company noted that this amount far exceeds the combined
amount of all other similar surety bonds for which Chubb has requested
collateral. In other words, it appears to be an exception." Cohen said the
company is not challenging the validity the underlying contracts and it should
be a nonissue for the stock. CB off 0.4% at $75, UCU flat at $21.93. (CUB)
11:09 (Dow Jones) "If the U.S. story plays out according to the expectations
of the FOMC, 2002 will be a very dull and quiet year for monetary policy," says
SSB's Robert DiClemente. (JCC)
10:58 (Dow Jones) Prudential estimates attendance at Gateway's (GTW) annual
analyst meeting Wednesday was down about 50% from last year. The financial
outlook for the year was pretty much as expected, and Pru is holding to its
estimate of 45c loss, and says the Street's current view for loss of 17c will
need to come down. Firm continues to believe Gateway can execute on it strategy
without depleting its rich cash reserves, which remains a key metric for Pru's
valuation call. Keeps buy, saying GTW has $3.60 a share in cash. Shares off 13%
at $4.43. (TG)
10:44 (Dow Jones) Morgan Stanley's Mary Meeker and Goldman's Anthony Noto are
out with bullish calls on eBay (EBAY) Thursday morning. Meeker upgrades the
stock to strong buy from outperform and Noto issued a favorable note
reiterating his recommended-list rating. Both analysts, longtime Internet
bulls, contend the online auction company's stock has plenty of room to rise
from Wednesday's $49.11 close and express confidence in their future estimates
for the company, even though other observers have for some time expressed
concern about eBay's valuation. Stock up $2.86 at $51.97. (RS)
10:36 (Dow Jones) A rock to cling to in troubled times. That's essentially
what Merrill is calling GE in a recent in-depth report on the conglomerate,
whose stock is up better than 5% over the last week or so. GE possesses many
qualities that are scarce in the market now: familiarity, consistency, cash and
a solid AAA rating, according to analyst Jeanne G. Terrile. That's worth a
higher multiple and a $50 stock price before year end, she says. GE is up 69c
to $39.45. (CCW)
10:27 (Dow Jones) The hot gain in the Chicago PMI puts the index above 50 for
the first time in 18 months and suggests that the ISM survey on Friday,
expected at 51.0, could be even stronger, says Anthony Karydakis, Banc One
economist. (MSD)
10:24 (Dow Jones) Speculation mounting in Tokyo banking circles that Japan
government is mulling a new fiscal package, says London-based Japanese bank
source. Package could be unveiled in May, will center on stimulating consumer
demand rather than new public works, could include income tax, sales tax cuts.
(JMG)
10:19 (Dow Jones) While Hewlett-Packard (HWP) Chief Executive Carly Fiorina
was touting the company's proposed merger with Compaq Computer (CPQ) on
Wednesday, dissident director Walter Hewlett made a regulatory filing in which
he detailed his vision of an H-P future without Fiorina. Hewlett extolled the
virtues of interim and replacement chief executives and cited Procter & Gamble
(PG), Honeywell International (HON) and Apple Computer (AAPL) as companies that
prospered when their CEOs departed. Hewlett said that in those three cases,
only the chief executive departed, and he suggested that the same could be true
for Hewlett-Packard. He cited statements by H-P executives, other than Fiorina,
indicating the executives will remain with the company even if the merger falls
through. (RG)
10:10 (Dow Jones) It looks like Mel was right. Entertainment conglomerate
Viacom (VIA, VIAB) is poised to benefit from chief operating officer Mel
Karmazin's decision last year not to sell TV time on CBS for cheap during the
upfront selling season, says Merrill Lynch entertainment analyst Jessica Reif
Cohen. The analyst suggests that network scatter inventory pricing for March is
positive and 2Q scatter "is up an estimated 10%." Of all the broadcast
networks, says Cohen, "CBS has the most to gain in a positive pricing
environment since they sold the least amount of inventory in the upfront
advertising market.' (BS)
(END) DOW JONES NEWS 02-28-02
12:51 PM |
