MARKET TALK: Rally In Stocks Gets Serious
04 Mar 16:04
Edited by Thomas Granahan
Of DOW JONES NEWSWIRES
(Call Us: 201 938-5299; All Times Eastern)
MARKET TALK can be found using code N/DJMT
4:04 (Dow Jones) Another head-turning day for equities, which took Friday's
momentum here, and a surge in Japanese stocks Monday, and built another layer
on the bull foundation. On days like today, it's often trotted out that techs
and financials led the way, but there are so many groups that played a role.
Autos, construction, even forest products, in addition to Internets, brokers,
and semis act well. A lot of observers chalk gains up to nice economic numbers
Friday, but what about the weeks of nifty data before that. Whatever the
reason, the DJIA closed at its highest level since July 19, and the technicians
are finding patterns that actually look bullish. Also encouraging stocks were
able to shrug off bad news - Afghanistan and Oracle included in that list. DJIA
jumps 219 to 10587, Nasdaq Comp surges 57 to 1859, and S&P 500 climbs 22 to
1153 (preliminary). (TG)
3:46 (Dow Jones) Lehman says upwardly revised 4Q GDP growth of 1.4%, a
recharged manufacturing sector, and upbeat market comments by Fed Chairman
Greenspan all may serve to provide support for credit spreads this week. News
from corporate America also generally positive. A catalyst for more pronounced
spread movement would be significant asset sales, expected by early April.
(MCG)
3:28 (Dow Jones) Thomas Weisel upgrades Teradyne (TER), as evidence suggests
a recovery in the automated test equipment business. "Longer term, Teradyne
remains well positioned with the broadest semiconductor test platform, and
promising franchises in assembly test, high-end backplane assembly and high
performance connectors." Teradyne's recent run-up, Thomas Weisel says, makes
the valuation "somewhat less compelling," which is why the firm only moves TER
up to attractive. TER shares adding $2.15 to $39.70. (GS)
3:13 (Dow Jones) Wal-Mart (WMT) and Target (TGT) are selling $1.5 billion in
debt, but don't expect discounts. Target's 10-year notes seen around 92 basis
points over 10-year Treasurys, while 3-year Wal-Mart notes are talked 43 to 48
basis points over three-year part of Treasury curve. That's because "safety and
predictability" are in demand in bond land. (CSE)
3:01 (Dow Jones) It's starting to look like February may not have been a hot
month for online trading. Closely-held Datek Online Holdings says trading
activity at its Web-brokerage unit fell 9.9% from January and 21.6% from
February 2001. Gregory Smith, an analyst at J.P. Morgan H&Q, says the
sequential drop is "in line with our expectations for a 5%-10% drop in trades
across the industry." Other Web brokers are soon expected to announce their
February trading numbers. It "was clearly a slow month" for small-investor
activity, Smith says. "While the recent market performance thus far in March is
encouraging, we think some level of staying power will be necessary to attract
mainstream investors back into the market." (GFC)
2:54 (Dow Jones) With quality rallies from the DJIA and Dow Transports, on
the heels of the AMEX Market Value Index, Prudential's Ralph Acampora makes
this pronouncement: "I can now say that the bottom in September wasn't 'A'
bottom, but it was 'THE' bottom. That September low will not be retested
anytime soon." He says the breakout on the DJIA "gives us an easy upside target
of 11767." (TG)
2:47 (Dow Jones) S&P says a decision by the NYSE to review the listing of
Williams Communications Group's (WCG) shares has no impact on the company's
double-C-credit rating or status on the "negative watch" list. The listing is
under review because the shares have had an average closing price below $1 for
the last 30 days. The possibility of bankruptcy and decline in value of the
company are reflected in the current rating, S&P said. (JD)
2:38 (Dow Jones) Here's a perfect example of why investors shouldn't
necessarily take placeholders - the expected filing amounts on proposed IPOs -
seriously. Citigroup (C) has filed to sell 210 million shares of Travelers at
between $16 to $19 a share, giving the deal a value of $3.68 billion. Add to
that a concurrent $850 million debt offering, and you have a deal worth $4.53
billion. When Travelers first filed the IPO its placeholder was for a deal
worth up to $1 billion. Citigroup's Salomon, naturally, is leading the
Travelers IPO. (RJH)
2:31 (Dow Jones) Here's how US Bancorp Piper Jaffray sees the Oracle (ORCL)
situation: despite its revenue difficulties during the past several quarters,
the company has been much more stable on the bottom line as a result of
impressive cost management. But, as Piper has long cautioned, that can't last
forever, and it now appears Oracle has hit a wall on this front. Oracle will
now have to generate improved revenue growth to hit its margin and EPS targets.
The company's struggles are partly the result of a tough economy, but Piper
also notes Oracle continues to lose share to PeopleSoft (PSFT) and SAP, which
is a long-term worry. ORCL off 14% at $13.79. (TG)
2:15 (Dow Jones) Instead of receiving thanks for keeping the world out of a
deep recession, American consumers are seen as global spendthrifts. Merrill's
Bruce Steinberg points out that bears believe an inevitable payback lies ahead,
paving the way for a barely visible recovery or even a double-dip recession.
But, he says, the problem with that way of thinking is that there's little
evidence the U.S. consumer is stretched, along with plenty of evidence that the
U.S. savings rate is understated. (TG)
1:58 (Dow Jones) UBS Warburg ups price target on Mohawk (MHK) to $77 from
$72, and 1Q EPS view to 75c from 65c. Says continued strength in the housing
market and mild winter weather is contributing to better-than-expected sales
trends for residential floor coverings. Mohawk's acquisition of Dal-Tile is now
expected to close on March 20, which UBS says should contribute marginally to
Mohawk's 1Q earnings. MHK up 3% at $64.84. (TG)
1:46 (Dow Jones) U.S. Transportation Secretary Mineta Monday said the
Transportation Security Administration has begun the process of actively
recruiting more than 30,000 federal security personnel to perform airport
screening duties and other functions at U.S. commercial airports. (JCC)
1:22 (Dow Jones) Retailers report February sales on March 7. Prudential says
low inventory levels are likely to negatively impact comps for several
retailers, and says diversified names, like Abercrombie (ANF) and Gap (GPS),
should continue to perform poorly. Women's and off-price retailers should show
stronger performance, while across the industry, Pru still concerned about lack
of newness, and sees little this spring to generate much excitement. Continues
to recommend Ann Taylor (ANN), Intimate Brands (IBI), and Limited (LTD). (TG)
1:10 (Dow Jones) Ried, Thunberg and Co. economist Larry Greenberg isn't
worried about a dollar slide, but he argues that the U.S. currency doesn't need
to keep rising to show its strength. The market may realize this, and that
could be a reason USD hasn't surged in response to healthy economic data
recently. Another factor is lingering uneasiness - with post-Enron fallout, the
low U.S. savings rate, and the high current-account deficit, Greenberg says.
(JEN)
12:58 (Dow Jones) Friday's rating cut by Moody's provides no new insight into
earnings or cash flow prospects of Computer Associates (CA), SG Cowen notes,
saying both remain sound. Keeps strong buy rating, bases on stable earnings
prospects and low valuation. CA up 0.6% at $17. (TG)
(END) DOW JONES NEWS 03-04-02
04:04 PM |
