DJ MARKET TALK: The News Is Here - Don't Poke Holes In Story
07 Mar 16:20
Edited by Thomas Granahan
Of DOW JONES NEWSWIRES
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MARKET TALK can be found using code N/DJMT
4:19 (Dow Jones) That big news we've been waiting for all day has been
broken...Krispy Kreme (KREM) is moving to the Big Board! That, and Yahoo!'s
(YHOO) 1Q will fall short of views and Tim Koogle is giving up CEO role,
according to Wall Street Journal. Big news to be sure, but an all-day halt?
(TG)
4:04 (Dow Jones) If we're not careful, this rally in blue chips may stick.
Another big day for DJIA, pushed higher by HD, CAT and JPM. Also another day of
sour news from tech group, yet the sector responded OK. Banks, financials act
well. Just six of 30 DJIA components lose ground. Street can't wait to see
what's going on with Yahoo!, while more important news will be unemployment
numbers at end of week. Retail figures Thursday. DJIA gains 133 to 10724, near
high of session and above resistance at 10700, Nasdaq climbs 19 to 2223, and
S&P 500 gains 7 to 1261 (preliminary). Still too early to jump in completely,
though; we've seen these rallies before, only to move to lower lows. (TG)
3:54 (Dow Jones) Pharmaceutical investors Wednesday heeded the words of Abby
Joseph Cohen, chief investment strategist at Goldman Sachs, and sold off some
of their shares in big-name drug makers. Cohen intimated investors should not
continue to overweight their portfolios with pharmacueticals and biotechnology,
a recommendation the investment firm made for its own model portfolio last
spring. "These share prices are now appropriately reflecting the underlying
fundamentals," Cohen said. (BMM)
3:48 (Dow Jones) Think the Nasdaq is shaky. Check out Japan's Nikkei, already
weak and "poised for a major breakdown," say the technical analysts at Salomon
Smith Barney. They see the index, now around 12700, potentially sliding below
12000, possibly toward 8000. Such a tumble would have broad economic
ramifications, but could also make U.S equities appear a safer haven and also
bolster the dollar as the yen weakens. (KJT)
3:40 (Dow Jones) Moody's says 17 companies worldwide defaulted on a record
$10.6 billion of bonds in February. That brought Moody's global
speculative-grade bond default rate to 6.61%, up from 6.26% in January and the
highest level since 6.45% in June 1992. (TG)
3:26 (Dow Jones) Nymex crude, gasoline, heating oil all rise sharply going
into the close as traders are said rejecting fog explanation of inventory draw.
Instead, they suspect refiners are drawing down their stocks instead of buying
supply in anticipation of lower prices. "If refiners are short and locals have
sniffed them out, they'll make (the refiners) pay," a trader says. Could have a
panicky run-up starting today, he adds. April crude +63 cents to $29.13. (MSX)
3:19 (Dow Jones) A whopping $16.1B increase in consumer credit in January,
about $10B more than expected and doubling December's $7.1B rise. Suggests that
though consumers lost confidence in the economy, they weren't afraid to rack up
higher credit card bills or take on new loans. But also implies that consumer
getting tapped out and may have to curtail spending in the months ahead. (BB)
3:16 (Dow Jones) Shell Oil's $55-cash bid for Barrett Resources Corp. (BRR)
is the third time a major oil company announced plans to acquire a U.S.-focused
exploration and production company. The trend reverses a decade of divestitures
by the majors, who previously cut North American exposure to bulk-up overseas
portfolios. Analysts are expecting more deals ahead. Shell, itself, has
indicated that even if it is successful in acquiring Barrett, it may look for
other deals to improve its positions as the No. 4 U.S. gas producer. (CCC)
3:11 (Dow Jones) Greenspan urges U.S. banks not to cut off loans to
creditworthy borrowers as economic growth fizzles, saying it is in their
"self-interest" to make loans that pave the way for an eventual economic
recovery. He's mum on the monetary policy outlook front. (FL)
3:06 (Dow Jones) Morgan Stanley analyst Henry McVey continues to be bearish
on Charles Schwab Corp. (SCH). He's advising clients to stay away from the
stock for now. He also said Tuesday that he expects "some sort of announcement
by Schwab next week that could involve releveraging." (CWM)
2:56 (Dow Jones) Market internals on Tuesday were again indicative of an
oversold rebound - volume below average and breadth mediocre. All major indexes
came close to testing key overhead levels (10700 on DJIA, 1272 on S&P 500, and
2300 on Nasdaq) before pulling back. "But the fact that they did pull back
indicates that those resistance levels will not go down easily," says Dick
Dickson of Scott & Stringfellow. Earlier today, the DJIA also turned back after
hitting 10700. (TG)
2:42 (Dow Jones) Don't look now, but the near-term economic outlook is
deteriorating, says J.P. Morgan's Bruce Kasman. Despite slightly more promising
tone of recent data, he suspects weakness will rotate from manufacturing to
services. "The fallout from lower stock prices and rising unemployment will
limit real consumer spending to only about 2% annualized growth through the
fall," Kasman says. "They also will push housing down from current levels,
fully offsetting the support for household outlays from lower interest rates
and lower energy prices." (TG)
2:30 (Dow Jones) With Yahoo!'s (YHOO) stock and options halted, speculative
investors turned their attention elsewhere. Vivendi (V), which had been rumored
as a potential suitor of Yahoo!, saw the volatility associated with its March
60 puts spike significantly. "Obviously the market is bidding up these puts on
the fear that Vivendi might buy Yahoo," noted Paul Foster, 1010WallStreet.com's
options strategist. With Vivendi's ADS at $63.80, the March 60 puts also traded
actively. (KXT)
(END) DOW JONES NEWS 03-07-01
04:20 PM |
