MARKET TALK: UAL Getting Back Up To Speed
12 Mar 16:13
Edited by Thomas Granahan
Of DOW JONES NEWSWIRES
(Call Us: 201 938-5299; All Times Eastern)
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4:13 (Dow Jones) United Airlines parent UAL Corp. (UAL) gained 2.2% after the
world's second-largest carrier said it would increase flights from its Chicago
hub by 15% to 614, close to the 619 flights it had before Sept. 11. The Chicago
carrier slashed capacity by 23% after the attacks - steeper than the 17%-20%
cuts at most rivals - and has been among the slowest to add back flights. It
expects 2Q capacity to be 16%-17% below year-ago levels. UAL was one of the few
airlines to close higher, and the sector was among the worst performers on
Tuesday. (SON/TG)
4:05 (Dow Jones) Tech weakness was the dominant theme Tuesday, though blue
chips manage to hold a small gain. Shades of 'Enronitis' hit Street again, in
form of WorldCom news, but things seemed a bit more rational in selling. More
brutal news from Lucent and weakness in Nokia were too much for tech to
overcome. February retail sales out Wednesday. DJIA adds 20 to 10631, Nasdaq
Comp off 32 to 1897, and S&P 500 eases 3 to 1165 (preliminary). (TG)
3:56 (Dow Jones) Philip Morris' (MO) March call options are dominating option
screens as the most heavily traded calls at the various exchanges, with the
total volume reaching hundreds of thousands of contracts across various strike
prices. But it isn't some big bullish bet on the tobacco giant, but a dividend
play, traders and market makers say. Investors likely are buying in-the-money
March calls, which will expire later this week, to get access to the dividend
that will be paid in April to holders of record on Friday. (KT)
3:41 (Dow Jones) Analyst James Healey of Dresdner Kleinwort Wasserstein
offered a theory - though he stressed that it's unconfirmed - for the timing of
Canal Plus Group's $1 billion suit against NDS Group (NNDS). Canal, instructed
last week by corporate parent Vivendi Universal (V) to reach profitability
within two years, grasped at whatever means it had. "A billion on their
doorstep would help," Healey said. NDS is 80%-owned by News Corp. (NWS). NDS
ADRs down 27% to $16.90. (NBB)
3:29 (Dow Jones) Enjoy the run in Japan's Nikkei while you can. Morgan
Stanley's Robert Feldman, echoing many others, says the rally there has been
largely artificial rather than based on fundamentals. "The authorities'
campaign against sellers appears to have worked and resulted in something of a
buying panic," he says. "Once we are past the March fiscal year-end, more bad
news in the bad-debt area is expected." (TG)
3:19 (Dow Jones) Thanks in part to strong demand from high-yield mutual funds
that are flush with cash, United Auto Group (UAG), which operates car
dealerships, has increased from $225 million to $300 million its 10-year senior
subordinated note offering, people close to the deal said. The deal is expected
to price later today or tomorrow to yield 9 5/8% to 9 7/8%. (JD)
3:07 (Dow Jones) S&P said the SEC's inquiry into WorldCom's (WCOM) accounting
practices has had no impact on WorldCom's triple-B-plus credit rating or its
negative outlook. WorldCom has already disclosed the items requested by the
SEC, it is expected to implement FAS 142 goodwill accounting standards in 2Q
2002, and it has not been confronted by liquidity issues in the short-term
market, S&P said. (JD)
2:51 (Dow Jones) While Nokia (NOK) should continue to take handset market
share, WR Hambrecht analyst Peter Friedland believes the company's handset
results will be limited by modest 5% industry sales growth in 2002 as well as
negative pressure on average selling prices from low-income markets like China.
"Moreover, we believe the infrastructure business will continue to be
challenging until operations begin to roll out 3G networks in earnest, which we
do not expect to occur until 2003," he said, maintaining his market perform
rating on the stock. NOK off 7% at $21.93. (JDB)
2:41 (Dow Jones) We love The Dance as much as anyone (even more, actually),
but this seems a bit ridiculous. Linda Tally, the founder of something called
Leadership U Press, says there's a difference between how office pools are
viewed by baby boomers and generation X. Boomers focus on tradition and fun,
while generation X focuses on synergy and technology. "You will see more
attachment to winning office pools by younger generations due to a large need
for instant gratification and boomer envy," she claims. "However," (and this is
a beauty), "this is an opportunity to build bridges across multigenerational
lines if either generation takes the chance." Sure, that's what we're all
thinking about the tournament! (TG)
2:24 (Dow Jones) Jewelcor Management President Seymour Holtzman says he
doesn't like proxy contests. "I don't like (them) any more than I like to be in
my dentist's chair," Holtzman told Dow Jones Newswires Tuesday. "I want to be a
nice, happy, silent investor." Holtzman, however, is finding confrontation to
be a painful necessity these days. Jewelcor and a group including
Musicmaker.com (HITS) and Barington Capital Group have nominated directors to
three companies: Liquid Audio (LQID), Thistle Group Holdings (THTL) and
FairMarket (FAIM). "Presidents of some companies are insecure and pack the
company with a rubber stamp board," he said. "Rather than using the board as an
inexpensive way of getting people to run your business, none of (the
directors), in many instances, have ever served as a director of a public
company." (BS)
2:13 (Dow Jones) In the wake of a sweetened buyout offer by Limited (LTD)
last week, it was no surprise that an Intimate Brands (IBI) board committee
backed the offer, and the panel's nod largely confirmed that Limited won't have
to further sweeten its $1.56 billion bid. The nod also overshadows lawsuits
against the deal by a few, smaller Intimate shareholders who charged they
haven't been given enough information to evaluate it. Some Intimate Brands
holders complain that Limited's businesses aren't as vibrant as those of
Intimate Brands. But not all Limited shareholders have been keen on the deal,
either. Some say Intimate Brands shareholders are getting a premium they don't
deserve, given the benefits of Limited's strong balance sheet and diverse
businesses. Both stocks flat. (JMC)
2:06 (Dow Jones) Fitch's current credit rating of Japan's sovereign debt is
not in imminent danger of a downgrade. Reiterating the conclusions of his March
6 outlook for Japan's financial dilemma, Brian Coulton, senior director of
Fitch's sovereign ratings group, said "although unsustainable, the fiscal
problem is of a slow-burn nature."
1:52 (Dow Jones) It's tough to keep a strong market down. Blue chips have
just turned positive after their morning retreat, led, interestingly enough, by
IBM. Interesting because techs in general are not behaving well, as evidenced
by the 2.5% drop in the Nasdaq 100, 5.7% easing on the Amex Networking Index,
and 3% fall on the SOX. Alcoa, McDonald's, 3M, and P&G also lend a hand on the
Dow. "Overbought and oversold conditions can be resolved by either (time or
price), but a sign of strength is the ability of a market to not respond to an
overbought condition with weakness, but to resolve it through the decay of
time," says Lehman's Jeff deGraaf. DJIA up 9 at 10620, Nasdaq Comp off 37 at
1892, and S&P 500 drops 5 to 1162. (TG)
1:36 (Dow Jones) Robertson Stephens out with its first opinion on Blockbuster
(BBI), and it's a good one. Says company's dominant position, consistent track
record, sizable store base, and strong cash-flow generation positions
Blockbuster well for incremental revenue and growth opportunities. Says
risk/reward is favorable, and shares should be helped by strong industry trends
and good execution. Target over 12 months is $32. BBI off 1.2% at $24.13. (TG)
1:25 (Dow Jones) UBS Warburg downgrades Immunomedics (IMMU) to hold from buy
on valuation. "While we continue to remain positive on the company's lead
product, LymphoCide, we believe a lack of near-term catalysts is likely to
limit the potential upside from current levels." The firm adds "we are
increasingly sensitive to regulatory and competitive dynamics," meaning it may
take longer to get the product to market than originally expected. UBS cuts its
price target to $22 from $28. IMMU shares are losing 7.8% to $18.24. (GS)
1:07 (Dow Jones) Lehman looks for initial unemployment claims, to be released
Thursday, to hold steady at 375,000, where they have been for the last few
weeks. Expects current account deficit to widen to $101.2B in 4Q, from $94.5B
in 3Q. Also expects business inventories to fall 0.4% in January, matching
their December decline. Non-petroleum import prices probably inched lower in
February, falling 0.1% and reversing last month's unexpected advance. (MCG)
(END) DOW JONES NEWS 03-12-02
04:13 PM |
