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

To: Dealer who wrote (35158)	4/3/2001 9:09:05 AM
From: Dealer	Respond to of 65232

M A R K E T .. S N A P S H O T -- Flood of warnings to sting stocks By Julie Rannazzisi, CBS.MarketWatch.com Last Update: 8:59 AM ET Apr 3, 2001 NEW YORK (CBS.MW) - Stocks are set for another challenging session Tuesday, with technology issues taking a pre-market dive following a string of profit warnings released after the close Monday. Declines in the business-to-business space were especially punishing in the aftermath of Ariba's warning. The stock (ARBA) tumbled 23 percent to $5 in Instinet trading before the opening bell. The stock is off a staggering 90.7 percent since the start of the year. Ariba told investors after the close Monday that it now expects to post a loss of 20 cents a share in its fiscal second quarter, a mile wider than the 5-cent gain that had been expected by Wall Street. Further, the company said it's letting go about a third of its work force and will scuttle its merger with fellow B2B outfit Agile Software (AGIL). Ariba said sales were particularly weak in the U.S. and added that it was especially bruised by its Internet customers. Among other B2B stocks, Commerce One shaved 12 percent. Checking the futures markets, June S&P 500 futures shaved 7.30 points, or 0.6 percent, and were trading a heady 11.60 points below fair value, according to HL Camp & Co. Nasdaq futures, meanwhile, gave up 22.00 points, or 1.5 percent. "The market pendulum that swung so far to the bullish extreme a year ago is now swinging far into the bear territory, which also means that a bounce, when it comes, will also be large," commented Robert Dickey, technical strategist at Dain Rauscher. On the earnings front, Best Buy (BBY) posted fourth-quarter earnings of 89 cents a share, beating the First Call/Thomson Financial estimate of 82 cents a share. Best Buy said it expects comparable store sales at its stores to increase modestly in the coming fiscal year, although consumer sentiment is expected to remain soft, particularly in the first half. The retailer said it expects its annual earnings to grow about 16 to 18 percent, resulting in earnings-per-share of $2.15 to $2.20. Warnings clutter the tape E.piphany (EPNY) tumbled 29 percent in the pre-market after warning late Monday that it may post a net loss of as much as 40 cents per share in its first quarter due to continuing economic uncertainty in North American markets. Wall Street had expected a loss of 9 cents per share. Treasury action Government bond prices turned lower after posting modest gains in the short end. Prices backpedaled on Monday as well, ignoring weakness in the equity market and instead focusing on the slight improvement in the NAPM index, which diminished market expectations for an inter-meeting rate cut. The 10-year Treasury note shed 7/32 to yield ($TNX) 5.00 percent while the 30-year government bond shed 5/32 to yield ($TYX) 5.50 percent. On Tuesday's economic agenda is the release of February factory orders, seen rising 0.2 percent. View Economic Preview and economic calendar and forecasts. With equities continuing to falter and corporate earnings weak, rating agency Moody's Investors Service said lower-rated borrowers will have greater debt repayment difficulties. Moody's defined the relatively strong first-quarter performance by high yield bonds misleading, indicating that the severity of the market's sell-off at the end of last year was in part responsible for the better showing in the first quarter. "A much stronger performance by the equity market is necessary if high yield bonds are to continue their relative outperformance," Moody's warned investors in its daily research note. The average stock is down 6.2 percent in 2001 and 27.4 percent from the March 2000 Nasdaq peak and declining stock prices will make it more difficult to complete an equity offering or sell assets to pay down debt, Moody's noted, adding that high-yield spreads widened 430 basis points when the average stock price dropped 8.7 percent in 2000. In the currency segment, dollar/yen dropped 0.8 percent to 125.64 while euro/dollar climbed 0.5 percent to 0.8836.