MARKET TALK: Camp Of Fed Undecideds Will Shrink
15 Mar 09:26
Edited by Thomas Granahan
Of DOW JONES NEWSWIRES
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9:26 (Dow Jones) The Industrial Production data were just what the Fed was
looking for, and those that were on the fence regarding a move to a neutral
bias at next Tuesday's meeting will probably join the majority. Whether this
helps to move up bets of a rate hike is uncertain, but most can be certain
growth in the initial months of this year will indeed by strong. (MSD)
9:22 (Dow Jones) Industrial production rose by 0.4% in February, and January
was revised to up 0.2% from down 0.1%. These were the first increases since
Sept. 2000, except for July 2001 when production edged up 0.1%. These are
necessary signs of recovery and, with the rise in payrolls, suggests that
January may have been the first month of recovery, but February certainly was.
Capacity utilization rose by 0.3 percentage point to 74.8%. (JM)
9:17 (Dow Jones) Robertson Stephens looking for Disney (DIS) shares to cool
off. Firm cuts 2002 EBITA estimate and is no longer forecasting sequential
improvement in year-over-year operating income declines in 2Q. Longer term,
stock should work higher as management regains investor confidence and
demonstrates an ability to turn Disney's ship around. So, despite potential for
near-term weakness, firm keeps buy rating. DIS closed Thursday at $23.50. (TG)
9:01 (Dow Jones) WR Hambrecht still not sold on Oracle (ORCL), reiterating
its market perform rating. 3Q revenue was below firm's estimate, and Hambrecht
says Oracle's database business is facing pricing pressures, and the market for
applications sales remains tough. While growth in the company's application
server business looks to be a bright spot, Hambrecht says the product is priced
at about half of what competition IBM and BEA Systems (BEAS) are charging.
Oracle looking softin pre-market dealings. (TG)
8:53 (Dow Jones) PPI was benign, and it didn't do much for the USD, which is
just a touch off from earlier levels. EUR is $0.8849; USD/JPY is Y128.98. (JRH)
8:48 (Dow Jones) Energy prices in the PPI were up 0.4% in February, not a
huge rise, but enough to help push overall inflation higher. It's worthy to
note that in Fed speakers' recent comments that inflation is not a problem,
they always hold out the wildcard of energy prices. (SV)
8:44 (Dow Jones) Mattel (MAT) has more top-line growth potential through
market share gains than Morgan Stanley was giving the company credit for. Firm
raises long-term sales growth view to 5% from 3% and 12-18 month price target
to $28 from $23. Given that implied return, Morgan ups shares to strong buy.
MAT closed Thursday at $18.83. (TG)
8:38 (Dow Jones) The Fed can again breathe a sigh of relief following the PPI
data, and know that if it wants to it keep rates low it can, simply because it
faces no notable inflation pressures. (MSD)
8:36 (Dow Jones) The overall PPI rose by 0.2% in February and the core was
unchanged. Energy prices rose by 0.4%, but food prices rose 1.0% led by fresh
and dried vegetables, up 22.2%. There is little sign of sustained inflationary
pressure, however, just a brief effect from crop supply shortage. (JM)
8:30 (Dow Jones) Oracle's (ORCL) 4Q outlook isn't going to give the
technology arena much help, but that's not the focus of greater Wall Street
Friday. Instead, the investment community will be taking in some other big
numbers: February PPI, capacity utilization, industrial production, and an
early March read on consumer sentiment. The struggling bond market is preparing
for some robust figures, while stock futures look flat as a pancake. A big 'no'
vote for Hewlett-Packard (HWP)/Compaq (CPQ) from the NY State retirement Fund,
and GE is thinking about spinning off its P&C insurance operations. How Wall
Street will interpret the Andersen indictment, meanwhile, is open for debate:
tougher standards may make 2002 profit-growth estimates look like a fantasy (if
they don't already), but tougher standards may also improve the quality of
numbers further down the road. (TG)
(END) DOW JONES NEWS 03-15-02
09:26 AM |
