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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: Dealer who wrote (31156)	2/16/2001 8:56:09 AM
From: Dealer	Respond to of 65232

M A R K E T .. S N A P S H O T -- UPDATE Nortel's woes to weigh on market PPI jumps 1.1%; Housing starts up 5.3% By Julie Rannazzisi, CBS.MarketWatch.com Last Update: 8:44 AM ET Feb 16, 2001 NEW YORK (CBS.MW) - An ugly earnings warning from Nortel Networks as well as surprisingly strong wholesale inflation data is set to heavily weigh on the market once trading commences Friday. March S&P 500 futures slid 16.10 points, or 1.2 percent, and were trading roughly 14.30 points below fair value, according to figures provided by HL Camp & Co. Nasdaq futures, meanwhile, slid 2.8 percent, or 65.00 points. In economic news, the producer price index surged 1.1 percent in January, surpassing expectations for a 0.3 percent increase by a mile. The core rate, which excludes the volatile food and energy components, climbed 0.7 percent vs. projections for a 0.1 percent increase. and view Economic Preview, economic calendar and forecasts and historical economic data. If the PPI wasn't enough, the market got more evidence Friday that the economy isn't rolling over. January housing starts jumped 5.3 percent to a 1.651 million rate -- a level that hasn't been seen in nine months -- while building permits zoomed 12.6 percent to a 1.697 million rate. Nortel Networks (NT) said after the close that a faster and more severe economic downturn in the U.S. will result in slower market growth. For the first quarter, Nortel expects a loss from operations of 4 cents a share. That compares to the current First Call/Thomson Financial estimate of a profit of 16 cents a share. Nortel also said it expects to cut 10,000 jobs in 2001. The company now expects earnings to grow 10 percent in 2001, a third the pace it forecast when it reported fourth-quarter earnings on Jan. 19. Shares fell 27 percent to $21.60 in pre-market dealings. Dell Computer (DELL) fell 7.5 percent to $23.13 in the pre-market. The company said after the close Thursday that it made 18 cents in its fourth quarter, a penny less than the First Call estimate. Dell also announced that it's cutting 1,700 jobs, or 4 percent of its workforce during Thursday's trading session. Meanwhile, Dow stock Hewlett-Packard (HWP) lost $2.35 to $34 in Instinet. The company registered late Thursday a first-quarter profit from operations of 37 cents a share, in line with lowered analyst expectations. Looking ahead, H-P said it likely won't meet expectations of double-digit revenue growth for the year due to poor economic conditions, business execution woes, and an unknown sales outlook. Schering-Plough (SGP) lost 19 percent to $39 in Instinet. The company told investors after the close Thursday that Fund flow watch Trim Tabs said equity funds had outflows of $1.4 billion over the five trading days ending Feb. 14, vs. outflows of $6.6 billion during the prior week. Equity funds that invest chiefly in U.S. stocks saw outflows of $1.9 billion vs. outflows of $2.7 billion in the prior week. Trim Tabs also said that margin debt fell $1.6 billion to $197.1 billion at the end of last month from the $198.7 billion at the end of December. Since the market capitalization of all stocks traded on the NYSE, Nasdaq and Amex rose 3.5 percent in January, the ratio of margin debt to market cap dropped to 1.17 percent - its lowest level since the end of Oct. 1999. The ratio stood at 1.22 percent at the end of December. Treasury focus In the bond arena, prices quickly gave back early gains in the aftermath of immensely strong economic figures. The 10-year Treasury note fell 7/32 to yield ($TNX) 5.19 percent while the 30-year government bond lost 9/32 to yield ($TYX) 5.50 percent. In the currency arena, dollar/yen shed 0.3 percent to 115.03 while euro/dollar climbed 0.7 percent to 0.9144. --------------------------------------------------------------------------------