"" When "" Tech Spending Picks Up, CSFB Likes These
Edited by Thomas Granahan
Of DOW JONES NEWSWIRES
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10:52 (Dow Jones) George Gilbert, CSFB's software strategist, says when
corporate America does finally start to increase technology spending, he
expects it to extend existing infrastructure to communicate with customer
and partners. And he sees BEA Systems (BEAS), CheckPoint (CHKP), Veritas
(VRTS) and WebMethods (WEBM) benefiting most. (MLP)
10:43 (Dow Jones) Speculation on Wall Street that XO Communications (XOXO)
will soon cut its business plan to mitigate concerns about its debt load and
funding gap. Analysts Aryeh Bourkoff of UBS Warburg and Ken Hoexter of
Merrill Lynch both expect XO's management to cut capital spending in the
next few weeks. Thursday, another debt-laden start-up carrier, Winstar
Communications (WCII), halted network expansion and laid off 44% of its
workforce. (CBN)
10:37 (Dow Jones) Although the layoffs at BMC Software (BMC) suggest cost
cutting in anticipation of slower revenue, its solid March quarter bodes
well for other mainframe software vendors. Prudential expects Computer
Associates (CA) and Compuware (CPWR) to both meet-or-exceed its 4Q EPS
targets of 44c and 17c, respectively. SG Cowen says CA is a good "highly
defensive play." (MLP)
10:32 (Dow Jones) Economists at Goldman Sachs don't think the California
power crisis is much of a macro issue, saying "there is little reason to
expect important macroeconomic effects from the California power crisis,
even at the state level and particularly for the nation as a whole." (JC)
10:25 (Dow Jones) As Thursday's rally fizzles on jobs data suggesting we're
near a recession, option investors sold out-of-the-money calls, many in tech
names. In Sun Microsystems (SUNW), whose stock fell 5% to $13.94, investors
sold May 17.50 calls, earning about $100 a contract. These investors either
don't see Sun shooting past $17.50 by May 18 or are willing to sell stock at
that price. More than 16,192 contracts of these calls traded in the first
hour of trading, compared with open interest of 15,395, with these falling 5
cents to $1 at the Pacific Exchange. (KXT)
10:18 (Dow Jones) Though most economists looking for 50 BP ease in May, if
not sooner, Barclays economist Henry Willmore says underlying strength in
labor markets and signs of wage acceleration will limit May 15 rate cut to
25 BP. Calls inter-meeting move "unlikely." (BB)
10:12 (Dow Jones) Agilent Technologies' (A) news that it will temporarily
cut the pay of all employees by 10%, and revenue in the 2Q ending April 30
will be less than $2.9 billion, sent the stock in a tailspin Friday. Shares
were recently down 17%. But believers in Agilent may have something to cheer
about. Lehman Brothers analyst Edward White recommends investors buy the
stock. White says revenue at Agilent can grow "modestly" in 2001 and
"substantially" in 2002. (DLF)
10:04 (Dow Jones) February wholesale inventories fell by 0.1%, but sales
fell twice as much. Suggests inventories will be a drag on growth in 1Q, as
widely expected. Also suggests that imports slowed in Feb., since most
wholesale inventories are imported. (JM)
10:01 (Dow Jones) Merrill says FedEx (FDX) is a stock that investors should
be scaling into "with vigilance" over the next few months. Says business
conditions stronger than company's pre-announcement led some to believe, and
cost controls are stringent. Pricing continues to be strong, Merrill adds.
(TG)
9:50 (Dow Jones) We know the surprise payrolls data will put more pressure
on Fed to cut rates again. What about the ECB? Marc Chandler at Mellon
Financial reckons this increases chances of a 50 BP cut from them next
Wednesday. (NEH)
9:44 (Dow Jones) June Nasdaq wastes little time, falling to limit down level
of 1472.50, 42 points lower, at 9:40 a.m. ET, as contract takes out support.
A 10-minute trading curb is in effect. If the market remains at limit down,
a 2-minute trading halt will occur. (DMC)
9:43 (Dow Jones) Merrill's chief economist, Bruce Steinberg, says jobs
report will pressure Fed to move, and increases likelihood the Fed will ease
next week. While recent remarks have suggested Fed wants to wait until May,
report so weak in and of itself to allow them to wait. "We would look for a
50 BP cut, possibly next week," he says. Report doesn't convince him we're
in recession yet, but another decline in April may cause him to change
forecast to recession. (TG)
9:34 (Dow Jones) Stocks drop early. No surprise given big gains Thursday,
more bleak outlooks, and real possibility, based on latest jobs data, that
we're in or near a recession. DJIA off 107 at 9810, Nasdaq drops 40 to 1744,
and S&P 500 loses 12 to 1138. (TG)
9:25 (Dow Jones) Extreme Networks (EXTR) and Sycamore Networks (SCMR) were
the latest network equipment makers to warn of weaker-than-expected 1Q
results. Sycamore cited a dearth of customer orders. At Extreme, deferrals
of capital spending by both telecom and enterprise customers caused the
shortfall, says Credit Suisse First Boston analyst Lissa Bogaty. "Given the
current environment, we do not have a high level of confidence that
Extreme's revenues will rebound in any material way over the next several
quarters," Bogaty says. (PDL)
9:09 (Dow Jones) Where do you think Arnhold & S. Bleichroeder technician
John Roque stands? "That cat must have been on steroids, because the dead
ones we've seen usually don't bounce that high," he says of Thursday rally.
Thinks stocks can rally a little more, but yesterday's action isn't start of
big move up, because, even if lows of Tuesday hold, there will be a retest.
(TG)
9:03 (Dow Jones) The increase to 34.3 for the non-farm workweek is the
equivalent of adding about 350K jobs in GDP equations, says Lehman economist
Drew Matus. Combined with the 0.4% gain in average hourly earnings, the
report "removes the Fed from the picture completely until the May 15
meeting," says Matus. (SV)
(END) DOW JONES NEWS 04-06-01 |
