MARKET TALK: Blue Chips Reassert Themselves
06 Mar 16:03
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
4:03 (Dow Jones) Just another triple-digit move for blue chips, with some
additional evidence that the economy is turning. In other words, more of the
same. H-P and Coke the only Dow names to lose ground, and just barely, while JP
Morgan, Boeing, Alcoa, and GE lead the way higher. As sectors go, big up moves
in wireless, factory equipment, pipelines, and biotech, and not so in gaming
and consumer electronics. A growing voice from the chart watchers that says
medium-term strength may continue. DJIA adds 140 to 10574, Nasdaq higher by 24
to 1890, and S&P 500 adds 16 to 1162 (preliminary). (TG)
3:49 (Dow Jones) Charles Tate, the Tate in buyout firm Hicks, Muse, Tate &
Furst, plans to retire in June, the firm says. In fact, Tate, 57, wanted to
leave two years ago, but Tom Hicks, the firm's CEO, convinced him to stay. Tate
joined the firm in 1991, two years after it was founded. His name was added to
the door in 1994. (RJH)
3:40 (Dow Jones) Making last year's tax cuts permanent takes a big bite out
of current long-term budget projections, accounting "largely" for $379 billion
in revenue reduction in 2012 and 2013, the Congressional Budget Office said
Wednesday. Bush's $1.7 trillion tax cut currently expires in 2011. (MHA)
3:17 (Dow Jones) Qwest Communications (Q) is in "advanced negotiations" and
has made "significant progress" on the major terms of a proposed amendment to
its $4 billion credit line. Qwest has been dealing with the major banks of its
credit line and intends to discuss the proposed amendment with the other banks
over the next several days. Qwest believes it will reach agreement with the
banks under the credit line soon, however, it can offer no guarantees that it
will be successful in amending the credit facility. The companyexpects the
proposed amendment will require the approval of banks holding more than 50% of
the loan outstanding under the credit facility. Shares up 12% at $9.89. (TAG)
3:10 (Dow Jones) Now that EUR has successfully broken through stubborn
resistance at $0.8740, technical analysts see further gains in the cards. EUR
is $0.8760; USD/JPY is Y130.85; EUR/JPY is Y114.66. (JRH)
2:59 (Dow Jones) Racing Champions (RACN) shares have accelerated beyond the
$18 share price target Jefferies analyst James Line had on the stock, so he
downgraded the company to hold from buy based on valuation. New product lines
from the maker of diecast miniature cars need to work and the company's current
cars face strong competition from Action Performance Cos. (ATN), the analyst
noted. Racing Champions stock was flat at $19.09. (DDO)
2:42 (Dow Jones) One thing has certainly been true of at least blue chips in
recent sessions: whether they go up or down, they're doing it in a big way.
DJIA up 121 to 10554, Nasdaq Comp adds 7 to 1873, and S&P 500 climbs 12 to
1158. Interesting note from Lehman technician Jeff deGraaf, who says since
1988, the market has only seen seven instances (eight including Friday and
Monday) in which the Nasdaq, DJIA, and S&P 500 each registered back-to-back
positive volatility alerts. In those instances, he says, the market's 65-day
forward performance (not including the initial 2-day surge) was roughly double
the average 65-day performance. (TG)
2:35 (Dow Jones) Hilton Hotels (HLT) is ideally positioned for a rebound in
the lodging sector because of its operating leverage, exposure to properties in
urban markets, and its ability to cut costs, says Merrill Lynch analyst David
Anders. Because the U.S. is near the bottom of a recession, now would be a good
time to buy lodging stocks, the analyst said. HLT off 1% at $13.68. (DDO)
2:27 (Dow Jones) IMS Health (RX) reported that U.S. sales of QLT Inc.'s
(QLTI) anti-blindness drug, Visudyne, came in at $12 million in January,
according to BMO Nesbitt Burns analyst Christine Charette. If correct, that
would mean Visudyne sales rose 45% from January 2001, she said. But the numbers
could be even better. Charette noted that IMS estimates for Visudyne sales were
lower in three out of four quarters last year, and said it's likely January
2002 sales were also "underestimated." On Nasdaq, QLT shares are up 9% at
$20.27. (AMG)
2:18 (Dow Jones) Beige Book prepared by Boston Fed on reports received by
Feb. 26. Only Kansas City, St. Louis, and Dallas reported weak activity,
Cleveland was mixed, New York reports mixed signals, and other seven districts
reported "some pickup in activity" or in Chicago's case, "a positive tone."
(JM)
2:13 (Dow Jones) The Dow Jones Industrial Average has had a run of wild but
good days (lots of big swings, mostly pushing up). But now an investor has
chosen to be cautious in the short term. In the options of the DJX, which has
one-hundredth the value of the DJIA, the investor bought at least 6,000
contracts of the March 104 puts, which benefits if the blue-chip index falls
below 10400, while offsetting the cost by selling March 102 puts (likely not
expecting the DJIA to fall below 10200). On top of that, the investor bought at
least 6,000 contracts of the March 105 puts. The industrials were at 10522.88.
At the CBOE, the DJX March 105 puts fell 35 cents to $1.15 as 7,993 contracts
traded. The March 104 puts fell 35 cents to 70 cents as 6,385 contracts traded,
while the March 102 puts were down 25 cents to 35 cents as 6,104 contracts
traded. (KT)
2:08 (Dow Jones) The Beige Book was marginally upbeat, saying there was some
economic improvement in January and February. These insights may alter the
FOMC's impressions from when it compiled the forecasts in the Monetary Policy
Report to Congress before the Jan. 29-30 meeting. Economic data since have been
more upbeat and the Beige Book may substantiate these impressions for FOMC
members, leading to animproved assessment of the economy's growth prospects.
(JM)
1:54 (Dow Jones) Morgan Stanley thinks ad-agency holding concern Omnicom
Group (OMC) is fairly valued. Merrill Lynch weighs in, too: Merrill's Lauren
Rich Fine thinks the stock could have "upside surprises towards the end of the
year." Her theory: while Omnicom's valuation is "at the high end," its
valuation makes sense given its growth rate, and the company's "solid"
performance in 2001 "despite a difficult environment deserves a premium
valuation," she argues. She expects continued new business wins and projects
2002 double-digit revenue and EPS gains will drive the company's shares. (BS)
(END) DOW JONES NEWS 03-06-02
04:03 PM |
