MARKET TALK: Lehman Slashes GDP View, Sees Big-Time Easing
Edited by Thomas Granahan
Of DOW JONES NEWSWIRES
(Call Us: 201 938-5299; All Times Eastern)
MARKET TALK can be found using code N/DJMT
1:17 (Dow Jones) Lehman cutting 2Q GDP growth forecast to 1% from 2.5%,
citing confidence drop and stock reversal. Firm also expects GDP to grow 1%
in 1Q. Lehman now sees 4% Fed funds rate by mid-year. (BB)
1:13 (Dow Jones) In the options market, all eyes are on VIX, the CBOE's
market volatility index. Climbing for the fifth session in a row, this fear
gauge most recently jumped 3.47 or 11.7% to 33.24, above its recent range of
between 20 and 30 and indicating that traders and money managers are getting
anxious about the market. VIX has increased 42% since it closed at 23.46
last Thursday. Several times over the past year however, stocks have turned
around when VIX approaches the 35 mark. If VIX closes above 34 today, it'll
be the first time it's done so since Jan. 2, the day before the Fed
announced its surprise interest rate cut. (KXT)
1:08 (Dow Jones) It's a lot harder to make a case for tech stocks right now,
so what's a research firm to do. Step up coverage of decidedly un-tech
operations, perhaps. J.P. Morgan Securities on Friday initiated coverage
with buy ratings for Brunswick (BC), a developer of recreation products,
Masco (MAS), a maker of home improvement and building products, and Thermo
Fibertek (TFT), a builder of water clarification plants. But if you
recommend it, they don't necessarily come. Brunswick is down 10 cents to
$20.45, Masco has dropped 46 cents to $21.80 and Thermo is ahead 5 cents to
$3.87. (KJT)
12:54 (Dow Jones) The selling may be spreading beyond technology stocks to
other groups, but the drops are not as steep, at least so far. Of a balanced
list of 600 tech and nontech stocks tracked by Morgan Wilshire Securities
this month, less than half are off more than 10%. The biggest decliners: a
group of 57 technology stocks that are down more than 40% so far this month,
said chief technical analyst Jay Lefkowicz. (KJT)
12:43 (Dow Jones) Big name software stocks are crumbling Friday as investors
worry about their financial outlooks and lofty valuations. The Goldman Sachs
software index is off 5.5% on double-digit percentage drops in Oracle
(ORCL), Siebel Systems (SEBL), I2 Technologies (ITWO), Veritas (VRTS) and
PeopleSoft (PSFT). The only big-cap software stock bucking the trend:
Microsoft (MSFT) which is fractionally higher ahead of its big trial date.
(MLP)
12:37 (Dow Jones) EUR/USD is testing its intraday high at $0.9110 as the
Nasdaq and DJIA sink. Revived rumor of Greek Central Bank selling euros is
floating, but EUR seems to be tracking U.S. equities. USD/JPY at Y116.14.
(JEN)
12:35 (Dow Jones) March S&Ps hit limit down, 32 points lower, falling to
1225.50 at 12:30 p.m. EST. The market flirted with this level for a while
but finally fell to lock limit. A 10-minute trading curbs is in effect. If
the market remains at limit down a 2-minute trading halt will occur. (DMC)
12:34 (Dow Jones) Nymex crude and products futures move out of negative
territory, staging technical recovery from earlier losses. Shortcovering
cited. Volume light, exaggerating price moves. April crude up 36 cents at
$29.19, facing resistence at $29.59; March heating oil up 0.98c at 74.60c;
resistance pegged at 75.10c. March gasoline up 1.61c at 84.10c. (BWH)
12:30 (Dow Jones) Trading in Microsoft Corp.'s (MSFT) options were
cautiously bullish Friday morning and the stock was up, even as other tech
names lost ground. With the stock ahead 56 cents at $55.75, the at-the-money
March 55 calls traded actively, with some investors buying these. Also, more
than 5,000 contracts of the in-the-money April 60 puts traded, with
investors selling these. Trading floor speculation that the software giant
might settle its antitrust suit helps, although skeptical market observers
say the persistent rumor has made the rounds before. (KXT)
12:25 (Dow Jones) Dollar slipping against euro and yen as DJIA and Nasdaq
slide again. The euro is at $0.9120 and the dollar buys Y116.10. (JRH)
12:23 (Dow Jones) Computer screens showing tech stocks bled red Friday
morning, but a few bullish trades showed up here and there. At least one
investor opened a new position in 3Com Corp.'s (COMS) July 7.50 puts,
selling a large number of these out-of-the-money puts. This is a cautiously
bullish trade - likely not expecting the network systems provider to fall
below $7.50 by mid-July so the puts will expire unexercised. 3Com stock most
recently was up 22 cents to $9.06. The July 7.50 puts were at 75 cents on
Pacific Exchange volume of 20,000 contracts, compared with open interest of
843. (KXT)
12:18 (Dow Jones) Stock activity getting nastier, with major indexes at lows
for session. IBM leading DJIA lower, off 7%. Few places to escape. Tsys
rallying. DJIA off 192 at 10334, Nasdaq down 75 to 2169, and S&P falls 29 to
1224. (TG)
12:09 (Dow Jones) Motorola's (MOT) warning is also weighing on semiconductor
stocks, sparking fears that handset sales might not see as immediate a
recovery as some expected. Adding to that fear is word that Texas
Instruments (TXN) is cutting back production in five factories. The
Philadelphia Semiconductor Index fell as much as 5% in intraday, with both
chip stocks and chip equipment stocks down. (KWH)
12:02 (Dow Jones) The number of bankruptcy petitions filed in calendar year
2000 fell 5% from filings in calendar year 1999, according to data released
by the Administrative Office of the U.S. Courts. (JC)
11:53 (Dow Jones) March S&Ps are down, near session lows. Traders say to
keep an eye on the session low of 1233. "It's right near yesterday's low of
1230. If we can hold it, we'll probably bounce in the afternoon. If not,
expect further selling," floor trader says. Ultimately, though, he sees
March S&Ps going to the 1170 area. (DMC)
11:39 (Dow Jones) It's Martha Stewart vs. the world, as the celebrity
domesticator tries to take her company, Martha Stewart Living Omnimedia Inc.
(MSO), global. Stewart is already in Brazil, Japan and Canada, and has her
eye on other regions. The results, if they work out, could be as sweet as
her recipe for Luscious Chocolate Cake with Whipped Ganache, but the
expansion challenge will be a heady one, according to consultants. (BS)
(END) DOW JONES NEWS 02-23-01
01:18 PM
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