MARKET TALK: Bad News For Another Fiber-Optics Bigwig
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
9:12 (Dow Jones) Recent field checks showing that supply in the optical
fiber market is starting to loosen led Merrill Lynch analyst Steven Fox to
lower his 2001 earnings estimate for Corning Inc. (GLW) to $1.20 from $1.39.
Fox says that more of the glass fibers should become available as the year
progresses, putting pressure on pricing. He said service providers are
focused on better using current capacity. Fox's comments come a day after
Corning competitor JDS Uniphase (JDSU), which makes components similar to
Corning, issued a new profit warning. Fox maintained his near-term
accumulate and long-term buy rating on Corning's stock. (JDB)
9:09 (Dow Jones) After breaking the Y120 level in London trading, the dollar
is not much below, at Y119.90, as New York opens. Confusion over comments
made by Bank of Japan Governor Masaru Hayami that intervention to weaken the
Japanese currency is a possible option to boost the flagging economy sent
(DOW JONES) DJN: DJ MARKET TALK: Bad News For Another Fiber-Optics Bigwig
DJN: DJ MARKET TALK: Bad News For Another Fiber-Optics Bigwig
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
9:12 (Dow Jones) Recent field checks showing that supply in the optical
fiber market is starting to loosen led Merrill Lynch analyst Steven Fox to
lower his 2001 earnings estimate for Corning Inc. (GLW) to $1.20 from $1.39.
Fox says that more of the glass fibers should become available as the year
progresses, putting pressure on pricing. He said service providers are
focused on better using current capacity. Fox's comments come a day after
Corning competitor JDS Uniphase (JDSU), which makes components similar to
Corning, issued a new profit warning. Fox maintained his near-term
accumulate and long-term buy rating on Corning's stock. (JDB)
9:09 (Dow Jones) After breaking the Y120 level in London trading, the dollar
is not much below, at Y119.90, as New York opens. Confusion over comments
made by Bank of Japan Governor Masaru Hayami that intervention to weaken the
Japanese currency is a possible option to boost the flagging economy sent
the dollar over the key level. (JRH)
9:00 (Dow Jones) Goldman's Abby Joseph Cohen is one bull who won't be penned
in. She raises the firm's equity allocation to 70% from 65%, the first bump
up in a year. Cohen also leaves unchanged her projection that the Dow, which
closed Tuesday at 10591, will reach 13000 by year-end and the S&P 500, which
closed at 1253, will be at 1650 by Dec. 31. "We are increasingly confident
that a too gloomy consensus scenario is (already) priced into share prices,"
Cohen said in note to clients. (KJT)
8:57 (Dow Jones) Yahoo! (YHOO) cancels appearance at Merrill conference,
first time it has canceled the day before. As a result, Merrill's Henry
Blodget says it's prudent to review usual reasons that lead to
cancellations: impending earnings preannouncement; major acquisition;
take-out or strategic investment; and/or major management change. He also
adds Yahoo! has never been a "business as usual" company, so it may be none
of these things. "Let your imagination roam," he says. (TG)
8:46 (Dow Jones) Prudential fine-tunes Target (TGT) 2001 estimate - to $1.55
from $1.54 - but says there may be 9c upside to that view. Feb. sales lower
than expected, as sales softened during final week, but Pru not alarmed,
with Target management backing 1Q consensus of 28c a share. (TG)
8:38 (Dow Jones) More important than JDS (JDSU) revenue shortfall is decline
in margins, Lehman says. Firm had factored in March gross margins of 50.5%
vs. 51.4% in December, but now believes 48% is more realistic, and lower
than that in June is likely. Cuts FY01 view to 65c from 72c, and FY02
estimate falls to 55c from 74c, vs. consensus 82c. Still best positioned in
optical component sector, Lehman says, but firm remains cautious on stock,
as revised estimates could still be at risk. (TG)
8:33 (Dow Jones) Look for Outback Steakhouse (OSI) to trade off, as February
same-store sales revealed "a sharp slowdown" from January's results, says
Janice Meyer at CS First Boston. The analyst, who's neutral on the stock,
says Outback has posted flat or down traffic in four of the last five
months. "Though some of the weakness may be due to softer consumer spending,
we think some may be company-specific," Meyer advises clients. (RLG)
8:30 (Dow Jones) Plenty more bad news for equities, but it doesn't look like
major indexes are going to get hit. In fact, stocks are poised to move
higher, trying to build on two consecutive days of gains. Among companies
warning about profit shortfalls: JDS Uniphase (JDSU), Dow Jones (DJ), and
Broadcom (BRCM). Meanwhile, Bear Stearns (BSC) said hitting its views may be
difficult. Good news from Abby Cohen. Goldman's bullish strategist, who
hasn't wavered much from her upbeat outlook on stocks, now has bumped up her
equity allocation by 5%. Fed's Beige Book coming later in afternoon. Stock
futures looking good, Tsys flat. (TG)
(END) DOW JONES NEWS 03-07-01
09:13 AM
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