Red:
Surprise: Upgrade on MLM to "Strong buy"
Check under "Stocks to Watch"
Upgrade by Robinson- Humphrey
Enjoy!!!
C
Thomson I-Watch
Date:
Tue, 21 Sep 1999 12:20:35 +0000 (GMT)
From:
Thomson Investors Network <i-watch@thomson.reply.net>
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Thomson I-Watch Morning Update
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Market-Moving News
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* In Tokyo, equities soared on expectations that after the close the
Bank of Japan would announce a monetary plan to help ease the yen's
rise against the dollar. The Nikkei Index jumped 2% to 17,932. Much
to everyone's surprise, however, after the close the BoJ announced
it would not take steps to further support the yen, explaining that it
does not feel monetary policy should be based on currency rate
targets. The announcement sent the dollar tumbling in the overnight
trading to Y104.43 and has cast a shadow over global trading today.
* In Hong Kong, the markets continued yesterday's trend of selling
blue-chips and buying technology issues. Subsequently, the Hang Seng
slipped 0.4% to 13,420.46.
* News that the Bank of Japan will not ease monetary policy has
negatively influenced trading in Europe. Additionally, a report by
the Ifo institute showed higher-than-expected growth rates in the
West German economy which, when coupled with stronger-than-anticipated
growth in other euro-zones, increased concerns of a potential interest
rate hike from the ECB. The German DAX has dipped 1.0% to 5297.3 while
the French CAC40 is down 0.9%. Global concerns have pressured the
UK's FTSE100 as well, pushing it 1.0% lower to 5996.
* The Futures market suggests the US markets will open to the downside
this morning. The S&P Futures are trading down 5.8 points while Fair
Value is at positive 1.5 points.
* At 8:30 AM, the government will report on the July International
Trade situation. A survey of economists by Thomson Global Markets
predicts the trade deficit will narrow slightly to $23.9 billion from
June's record-setting $24.6 billion gap. While the trade data is not
typically a key piece of market-moving data, particularly given the
lag in reporting time, the dollar's recent drop against the yen will
pull the spotlight onto the report. Some analysts wonder if an ever-
widening gap will encourage some investors to seek out investment
opportunities outside the US which could slow the flow of funds into
US markets.
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Stocks to Watch:
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For the latest Earnings Announcements and Updates, visit the First Call
Center at Thomson Investors Network www.thomsoninvest.net/FirstCall.
* Analyst Recommendation Revisions:
Salomon Smith Barney upgraded Rowan Companies (RDC) to "Outperform"
from "Neutral" based on price. Prudential Securities lifted its rating
on Pixar (PIXR) to "Strong Buy" from "Hold," citing earnings
expectations for 3Q and predicted share price appreciation. Robinson-
Humphrey upgraded Millennium Network Corp (MLM) to "Strong Buy" due to
valuation and exptected future acquisitions.
Prudential Securities lowered its rating on Precision Castparts (PCP)
to Hold" from "Accumulate" based on reduced earnings expectations from
weakness in PCP's major markets. Lehman Brothers downgraded Alstom
(ALS) to "Underperform" from "Outperform," citing better opportunities
in other stocks.
JP Morgan reduced estimates for and cut Goodyear (GT) to a "Market
Performer" rating from "Buy," noting that the company was not "completely
comfortable" with current estimates. Bear Stearns downgraded Furon
Company (FCY) to "Neutral" from "Attractive" due to price and the
acquisition by Norton Company (NRTO) for $25.50 per share.
* Institutional Money Flows:
Profit taking tugged on oil-related stocks in yesterday's session. BHI
ended $1 3/4 lower at $30 7/16, BJS dropped $1 11/16 to $35 3/16, and HAL
fell back $2 1/2 to $45. Semiconductor stocks also gave back some of
their recent gains. TXN ended the day $1 3/8 lower at $88 1/2, KLAC lost
$1 9/16 to $71 7/16, and AMAT pulled back $1 to close at $83 13/16.
Strength in other technology-related stocks aided in the markets'
higher close. IBM jumped $4 3/4 to $130 1/8, MSFT added $1 1/8 to $97
9/16, and BMCS climbed $2 7/8 to end the day at $70 15/16.
* Vodafone Airtouch (VOD) and Bell Atlantic (BEL) will form a new US
national wireless company in a deal worth over $70 billion. Scheduled
for completion in 6-12 months, BEL will won 55% of the new group, while
VOD will own 45%.
* Suiza Foods (SZA) will purchase privately held Southern Foods Group,
including debt, by the end of 1999. Though the financial terms were
not disclosed, Suiza will obtain up to $2 billion in financing related
to the acquisition. The firm expects to see savings of $10 million in
the first year, and said the deal will add slightly to earnings or be
neutral in the first year.
* Apple Computer said its FY99 4Q earnings will fall below FY99 3Q
earnings of $0.69 per share. The First Call consensus estimate
forecast earnings of $0.76 per share. The firm cited Motorola's (MOT)
slow delivery of microprocessors, used in the PowerMac G4, which
limited supply.
* Western Digital (WDC) stated it sees a loss of $1.20-$1.30 for FY 2000
1Q, below the First Call consensus estimate predicting a loss of $1.07.
* GST Telecommunications Inc. (GSTX) announced it anticipates a 3Q loss
of $0.90-$1.00 per share, excluding the $30 million settlement received
from Global Light Telecommunications (GBT). A First Call survey of 9
analysts forecast a loss of $1.02 per share.
* Cabletron (CS) booked FY2000 2Q earnings of $0.07 per share, ahead of
the year-ago quarterly earnings of $0.04 per share. The results were a
penny above the First Call consensus estimate. Separately, the company
announced Compaq Computer (CPQ) has invested in Cabletron, agreeing to
a "multi-year purchase" of products and services. Compaq canceled the
earlier agreement to purchase equipment for $300 million per year.
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