DJ MARKET TALK: Friday Open May Be One For Bulls To Forget
2002-04-18 16:42 (New York)
Edited by Thomas Granahan
Of DOW JONES NEWSWIRES
(Call Us: 201-938-5299; All Times Eastern)
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4:41 (Dow Jones) Wall Street has had a few more minutes to digest Microsoft's
(MSFT) numbers/outlook...and things are getting uglier. Shares off about $4,
and combined with big after-hour losses in eBay (EBAY) and Xilinx (XLNX), among
others, Friday's open has the potential to be a nasty one. Then again, the
companies haven't had a chance to defend themselves on their conference calls,
so things may perk up a bit... (TG)
4:23 (Dow Jones) This afternoon and Friday morning will bring updates on just
how badly the stock-trading industry is faring. Instinet Group (INET) is due to
report 1Q results momentarily - one analyst, from UBS Warburg, downgraded the
stock earlier ahead of the earnings report. Friday morning brings 1Q earnings
from LaBranche (LAB), the big New York Stock Exchange specialist firm. Earlier,
Credit Suisse First Boston lowered 1Q earnings estimates on LaBranche to 38
cents a share from 44 cents. CSFB cited lowered expectations for NYSE volume
growth. LaBranche finished down 4.6%, while Instinet fell 2.7%. (GFC)
4:18 (Dow Jones) Plenty of folks expected Microsoft (MSFT) to warn about next
year, but the 3Q miss on both EPS and revenue, and the cutting of 4Q numbers,
too, isn't going over too well. Shares off a couple bucks after hours. Probably
doesn't bode too well for tomorrow, either. (TG)
4:03 (Dow Jones) Volatile day for stocks, for obvious reasons, but
essentially a day's worth of weakness turned around at the close. Another
session of difficulty for Boeing and United Tech, while claims data are tough
to read. Huge amount of big earnings about to be released. Biotechs act well,
volatility on the rise, and semis suffer. DJIA eases 13 to 10207, Nasdaq Comp
falls 8 to 1802, and S&P 500 slips 1 to 1124 (preliminary). (TG)
3:48 (Dow Jones) ExpressJet (XJT) has gone to a flatline, trading even with
its $16 offering price. It's bad for ExpressJet, but it could be even worse for
the other two regional jet companies planning IPOs: Pinnacle Airlines Corp., a
unit of Northwest Airlines Corp. (NWAC), and Republic Airways Holdings Inc.,
which services AMR Corp.'s (AMR) regional service. (RJH)
3:38 (Dow Jones) Merrill Lynch (MER) is currently in a closed-door meeting
with the New York state attorney general's office and New York State Supreme
Court Justice Martin Schoenfeld. Merrill and Attorney General Eliot Spitzer
have been trying to hammer out a settlement regarding the firm's research,
which the AG says is biased in favor of investment banking clients. Merrill has
until noon on Friday to add certain disclosures to its research reports. The AG
is also reportedly looking for a lofty fine. Could a settlement be in the
works? Wait and see... (CWM)
3:34 (Dow Jones) Arthur Andersen's client list is getting shorter by the day.
And with many companies having wrapped up their 2001 audits at the end of
March, the defection rate is likely to step up over the next several weeks,
industry observers say. In the first quarter of this year alone, Andersen lost
113 clients, $430.9 billion in revenue audited, and $839.7 billion in client
assets audited, according to data compiled by Public Accounting Report. That's
up from a net loss of 15 clients and a net gain of $1.2 billion in revenue
audited for the same period last year. For all of 2001, Andersen had a net loss
of 40 clients. (JAW)
3:18 (Dow Jones) Virtually all of Fox Entertainment Group (FOX) business
segments are picking up steam - except for the lackluster Fox broadcast
network, says Merrill Lynch analyst Jessica Reif Cohen. She reiterated her
near- and long-term strong buy ratings on the stock, noting that the cable
networks division is benefiting from subscriber and ratings gains; television
stations have seen increased market share; television products has added hew
hit shows to a dominant position; and film has had a string of profitable
releases, including "Ice Age." (DDO)
3:04 (Dow Jones) Will Cheesecake Factory's (CAKE) valuations hold up?
Ladenburg Thalmann analyst R. Scott Tilghman is increasingly doubtful, and
suggests that investors holding the casual-dining chain's stock take some
profits. He's worried about the company's ability to maintain revenue and
earnings growth at historic levels. Tilghman also questions whether indicated
square footage additions this year will occur. CAKE reports later Thursday.
(RLG)
2:47 (Dow Jones) J.P. Morgan analyst Harry Curtis raised his earnings
estimates on Harrah's Entertainment (HET) to $2.85 a share from $2.54 for 2002
and to $3.20 from $2.98 for 2003. Subsequently, he boosted his 12-month price
target to $60 a share from $55. Keeping his buy rating the stock, Curtis said
Harrah's strong play - particularly at its dockside casinos - and the operating
leverage of its geographically diverse casino hotel portfolio will continue to
aid the company. (DDO)
2:36 (Dow Jones) "Medicaid has the potential to bankrupt every state in the
Union," says a new report by the American Legislative Council, a state
legislator group, which said Medicaid is unsustainable in its current form and
must be reformed. (JCC)
2:23 (Dow Jones) Microsoft reports 3Q after the bell, and Merrill sees EPS
within Street range of 51c-52c, with revenue near consensus of $7.3 billion.
Expect company to indicate conservative FY03 outlook, which will likely keep
the stock in the $55-$65 trading range. Microsoft has little to gain in current
environment by being more bullish. Merrill remains neutral in near term. MSFT
up 0.3% at $56.81. (TG)
2:03 (Dow Jones) Morgan Stanley says there is no housing bubble in the U.S.
(But don't they read Barron's?) Firm says higher prices are more a function of
constrained supply and solid demand than just of low rates. Says supply has
been constrained by environmental concerns, more disciplined builders, and more
restrictive borrowing requirements, and says fears of inappropriate mortgage
leverage are unfounded. Higher mortgage leverage appears to be balanced by
lower credit-card leverage, Morgan Stanley says. (TG)
1:47 (Dow Jones) Sens. Phil Gramm, R-Texas, and Jon Kyl, R-Ariz., introduce
an amendment to the Senate energy bill currently on the floor that would make
the elimination of the estate tax permanent. The House is currently debating a
bill that would make all of last year's tax cuts, which expire at the end of
2010, permanent. (JCD)
1:31 (Dow Jones) Extreme Networks' (EXTR) fiscal 3Q results reflected some
important trends in the network equipment market. Extreme's sales to companies
and other organizations, known as the enterprise segment, were up in the double
digits on a percentage basis, compared with 2Q. But sales to telecom service
providers were down 30% from 2Q levels. "We continue to believe that the
enterprise market will recover before the service provider market and that
Extreme is well positioned to capitalize on the recovery," says Pacific Growth
Equities analyst Erik Suppiger. Shares up 2.4% at $9.82. (PDL)
1:18 (Dow Jones) Treasurys traders got a reminder that the event risk they've
feared in recent months is real - to the tune of a quick 10 BP range in the
10-year and two-year notes. Treasurys rallied massively following news of the
plane crash in Milan, exacerbated in the long end by the fact that so many had
piled into levered steepeners yesterday after Greenspan's testimony. The market
then snapped back to pre-crash levels as soon as reports of an SOS call from
the plane came out, dissuading initial fears of terrorism. (SV)
(END) DOW JONES NEWS 04-18-02
04:42 PM- - 04 42 PM EDT 04-18-02 |
