MARKET TALK: IBM Growth May Leave Street Feeling Blue
11 Mar 13:29
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
1:28 (Dow Jones) Sanford C. Bernstein downgrades IBM to market perform from
outperform, saying there's unlikely to be much upside in Big Blue's stock over
the next 1 to 3 quarters. Analyst Toni Sacconaghi says its global services unit
will be weaker than most investors expect, its valuation isn't cheap, and the
debate about its EPS growth outpacing revenue growth will continue - even after
IBM releases it 10-K later today. IBM down $1.01 to $104.08. (MLP)
1:18 (Dow Jones) UBS Warburg has seen data recently that reinforce its view
that GM "is playing from a position of considerable strength vs. Ford (F) and
Chrysler (DCX)." Firm sees situation over next four or five years in which GM
will see stable market share, improved product mix, lower structural costs, and
somewhat better pricing. That should let GM hit or exceed the $10 mid-decade
EPS target stated by management two weeks ago. GM up 0.5% at $60.98. (TG)
1:02 (Dow Jones) Having met with senior managers at Bank One (ONE), Bear
Stearns' most important observation is this: The senior management team has
been in place long enough now to focus on growth after nearly two years of
restructuring, expense reduction, and recession-related credit losses. Credit
cards, retail banking and commercial banking are all areas where Bear expects
better performance this year and next. Reiterates attractive rating and $41.50
price target. ONE up 2% at $40.63. (TG)
12:49 (Dow Jones) Concord Coalition says special depreciation allowance in
newly-enacted stimulus package will do very little to provide short-term
stimulus but will make it harder to return to a balanced budget after the
economy recovers. (JCC)
12:37 (Dow Jones) Deutsche Bank sees a negative 0.3% decline month-over-month
in business inventory figures for January to be released on Thursday. Says with
domestic demand showing renewed strength, much smaller chance of an
inventory-led double dip in the economy. Indeed, a more gradual and even pace
of inventory rebuilding will buttress the economy over the next couple of
quarters and perhaps elongate the expansion. (MCG)
12:25 (Dow Jones) Pimco chief Bill Gross says the Fed did the right thing
lowering interest rates post-Sept. 11, and says the economy and markets can
take a 2.5% to 3% funds rate sometime this year, in an interview on CNBC. (MSD)
12:15 (Dow Jones) Insurance analysts can't make up their mind on Aflac (AFL).
Joanne Smith, a UBS Warburg analyst, upgraded the insurer to a buy from a hold,
citing a new attitude and sales outlook in its largest business - Japan. Smith,
after meeting with Aflac's management team in Japan, says "new products and new
management could be just the right combination to get Aflac back on its
historical growth track." However, Vanessa Wilson, a Deutsche Banc Alex. Brown
analyst, has a different view on the firm's valuation. She cut her rating to a
buy from a strong buy, citing a recent run-up in the stock based on increasing
confidence in its Japan unit. Investors seem to be listening more to Wilson:
Shares of Aflac recently traded down 30 cents, or 1.1%, at $28.16. (CUB)
11:59 (Dow Jones) Between Friday's close and Monday's open, six companies
filed to raise up to $905 million in IPOs. How rare is that kind of volume?
There had not been that many deals filed in such a small period of time since
eight companies filed for IPOs on Oct. 5 and Oct. 6, 2000, according to Richard
Peterson, chief market strategist at Thomson Financial. (RJH)
11:45 (Dow Jones) "I don't rule out testing major support at Y125" said
Ashraf Laidi, chief currency analyst at MG Financial in New York. EUR is
$0.8765; USD/JPY is Y127.96; EUR/JPY is Y112.22. (JRH)
11:31 (Dow Jones) When it comes to the economic recovery, bag the 'V' and
think 'check mark', says Pru's Ed Keon. The almost surreal growth in
productivity during the recession, strong consumer spending, the drop in
unemployment and the pick up in manufacturing lead him to believe the 2001
economic drop, like the Asian crisis slowdown in 1998, may in time look more
like a pause in a long-term expansion rather than a major recession. Ups 2002
S&P 500 expected return forecast to 10%-15% from 5%-10%. (TG)
11:14 (Dow Jones) Blue chips have turned up after spending the morning in the
red, and techs are trying to do the same. Financials acting OK, with JP Morgan
and AmEx leading the Dow higher. Gold, Internet services, entertainment, and
oil companies also looking good, while office equipment, semis, and tobacco
struggle. DJIA edges up 5 to 10577, Nasdaq Comp eases 10 to 1918, and S&P 500
flat at 1164. (TG)
11:05 (Dow Jones) We all know it has been six months since the horror of
9/11, but there's another, far less important, anniversary that should be
noted: On March 10, 2000, the Nasdaq Comp closed at its highest level ever,
5048.62. According to Webmergers.com, there have been 788 dot-com failures
since January of 2000. (TG)
10:49 (Dow Jones) Lehman Brothers says it sees Wednesday's release of overall
retail sales figures for February reflecting a 1.8% rise, following 0.2%
decline in January. Outside volatile auto sector, sales probably advanced a
very solid 0.8%, compared with last month's 1.2% jump. Removing auto sales,
spending has advanced steadily since last September, rising 4.2%. (MCG)
10:36 (Dow Jones) Sun Micro's (SUNW) lawsuit against Microsoft (MSFT) is more
about publicity and less about technology. At least that's how ABN-Amro sees
it. "In our view, the suit and the requests amount to nothing more than
corporate comedy," analyst George Godfrey says. "Most competitors of Microsoft
realize that the legal issues against them are winding down. Sun's suit is just
another attempt to delay what's already close to/has been decided." (TG)
10:25 (Dow Jones) Two out of three Latin Americans are dissatisfied with the
results of democracy and only one out of two believe democracy is the best form
of government, according to a recent poll cited in a new Inter-American
Development Bank study. (JCC)
10:19 (Dow Jones) WR Hambrecht sees a significant backlog of business that
should drive Siebel's (SEBL) results this year, and likes the improving
fundamentals overall. Says current estimates for this year and next are highly
achievable, and checks indicate that progress is "adequate" for the March
quarter. Reiterates buy rating, price target is $40. SEBL up 0.7% at $36.29.
(TG)
10:11 (Dow Jones) Goldman Sachs economists call U.S balance of payments
"still unsustainable" and say "long term outlook for the dollar remains very
precarious." (JCC)
10:04 (Dow Jones) Wholesale inventories fell by 0.2% in January compared to a
0.5% decline in December and a 0.3% consensus expectation. A large portion of
wholesale inventories - particularly autos - are imports, so, this signals
further downward pressure on U.S. imports, but much less than in 4Q. Inventory
liquidation remains a drag on GDP growth, but also less so than in 4Q. (JM)
(END) DOW JONES NEWS 03-11-02
01:29 PM |
