No Soft Landing In Sight For Stk Mkt Plane
Edited by Thomas Granahan
Of DOW JONES NEWSWIRES
(Call Us: 201 938-5299; All Times Eastern)
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11:58 (Dow Jones) If the stock market was an airplane "the seat belt signs
would be on, the flight attendants would be in their seats and more than one
passenger would be holding a paper bag in front of their very pale face."
hehe
That's the feeling of Douglas Cliggott, chief investment strategist at J.P.
Morgan Securities. What's more, Cligott's airplane can expect more
turbulence. The implied growth rates for many technology stocks remain
"somewhere between very optimistic and ridiculously optimistic," he said.
"In short, not levels where one should close their eyes and buy." (KJT)
11:50 (Dow Jones) Edison International (EIX) rally tripped up by Moody's,
which says the bankruptcy filing by PG&E's (PCG) Pacific Gas unit increases
the odds of Southern California Edison, a unit of EIX, doing same. Yes,
Southern Cal is trying to work out a deal to stay out of debtor courts,
Moody's acknowledges, but creditors are getting impatient, so the utility
must act quickly. EIX, which had been up around 28%, now up 18%. (GC)
11:46 (Dow Jones) Add Brown Brothers Harriman to the growing group of
investment firms slashing their expectations for the S&P 500. The index,
which was recently at 1141, will rise to 1450, not 1650, by year-end, said
chief markets strategist Charles Blood. Blood, like other investment
strategists, set his figures months ago, and the market has not reversed its
slide since then, prompting the reduction. (KJT)
11:33 (Dow Jones) The technology bust has sure turned investors sour on tech
stocks. But Wit SoundView found some tech stocks that investors may want to
own once the tide turns. Wit says it has made an effort to come up with a
list of stocks that are likely to be "much larger in three to five years
than they are today." The list does not include tech bellwethers, but
rather companies that have a chance to become bellwethers in their own
right, or at least "graduate from mid-capitalization to 'potential
bellwether' status." Included on the list is Veritas Software (VRTS),
Siebel Systems (SEBL), BEA Systems (BEAS), Check Point Software Technologies
(CHKP), Ciena (CIEN), i2 Technologies (ITWO), Brocade Communications Systems
(BRCD), Peregrine Systems (PRGN), Mercury Interactive (MERQ), Micromuse
(MUSE) and Finisar (FNSR). (DLF)
11:29 (Dow Jones) Thoughts on Northwest Airlines (NWAC), which just avoided
a mid-May strike: The tentative agreement between the No. 4 airline and its
mechanics union is "a positive development," says Merrill Lynch analyst
Linenberg. Among major carriers, he likes Northwest, Continental (CAL) and
Delta (DAL) because they are not acquiring another airline and "have the
best labor outlooks." Assuming Northwest contract will be finalized, the
airline won't have any open contracts until September 2002, he noted.
Northwest shares are up 6%. (SON)
11:21 (Dow Jones) "Since the early 1990s, the long-run budget outlook has
improved significantly, but the outlook remains highly uncertain," says new
detailed Bush budget, which cites an "enormous range of possible outcomes."
(JC)
11:10 (Dow Jones) Dreary weather, particularly in the Northeast, put a
damper on home improvement plans last month, according to Lehman Brothers
analyst Alan Rifkin. While they don't report the figures, Rifkin estimates
March sales at stores open at least a year for Home Depot (HD) and Lowe's
(LOW) were off from last March's results by 4% and 5%, respectively. And
despite good news on home sales trends and signs of support for lumber
prices, price competition could hurt the two companies' earnings, says Aram
Rubinson, an analyst at UBS Warburg. He's trimming his 1Q estimate for
Lowe's to 53 cents from 56 cents. (JMC)
10:55 (Dow Jones) PG&E's (PCG) Pacific Gas and California still look far
apart on a solution, but other firms involved in the power mess show some
hope. A recap: Edison International (EIX) may work out a deal with Calif.
ASAP to stay in business (without bankruptcy), and its stock rallies 22%.
Genator Calpine (CPN) says it expects PG&E to pay it for back power
regardless of Pacific Gas bankruptcy filing - and the 4% rise in CPN suggest
investors willing to give it benefit of the doubt, though the stock did fall
7% Friday. Meanwhile, generators that, unlike Calpine, have reserves against
unpaid debts are a little better, too, including Dynegy (DYN) up 3%; Mirant
(MIR) up 1%; and Reliant (REI), up 3%. (GC)
10:48 (Dow Jones) Nymex oil complex continues uptrend after Friday's
correction, helped by strong gasoline futures, Friday's $27/bbl-plus
settlement, and unconfirmed reports that Saudi's King Fahd is dying.
Gasoline higher on concerns over record-low inventories ahead of spring and
summer driving season. "Everyone is focusing on gasoline," analyst says.
"It's just a matter of time before we hit $1/gal." May crude up 34c to
$27.40; May gasoline up 1.88c to 98.80c/gal. (MSX)
10:41 (Dow Jones) In latest DJ Newswires survey, 19 out of 28 economists
forecasting a rate cut at Wednesday's ECB meeting. Many, though, admit call
was a tough one after officials went to great lengths in recent days to
repeat wait-and-see stance. (CLL)
10:36 (Dow Jones) Lehman analyst Dan Niles cuts estimates on Intel (INTC),
Texas Instruments (TXN) and Cypress Semiconductor (CY). Niles says 2001 is
the "worst year ever for semis." The analyst, who had forecasted semi sales
to be down in the high single digits, now expects sales to be off 18% to 20%
in 2001. Nile is calling for Intel to post earnings of 65 cents a share for
2001, down from 70 cents, and 75 cents a share for 2002, down from 80 cents.
As for TI, Niles has the chip maker posting earnings of 65 cents a share for
2001, down from 75 cents and 90 cents a share for 2002, down from $1.00.
Cypress got the deepest cuts. Niles expects Cypress to post earnings of 50
cents a share for 2001, down from $1.36 and 75 cents a share, down from
$1.78 in 2002. (DLF)
10:30 (Dow Jones) Morgan Stanley upgrades Motorola (MOT), saying shares are
close to a bottom. Morgan Stanley added that the company's tightening has
poised its business to accelerate when the semiconductor cycle and other
economic factors rebound in its favor. UBS Warburg reiterates buy, but
cautions "investors not to get aggressive with the name" until the balance
sheet and economic conditions improve. (CBN)
10:23 (Dow Jones) Second highest outflows of the year from stock mutual
funds in latest period. TrimTabs.com reported investors yanked $11.1 billion
from all equity funds over three days ended Thursday, highest since the
$15.9 billion outflows seen in the period ended Jan. 2. Funds investing in
U.S. stocks alone bled $9.0 billion. "Whether these redemptions reflect a
permanent disenchantment with the stock market on the part of some
investors, or simply anticipate April 16 (tax payment deadline), is not yet
clear," TrimTabs said. (YXH)
10:18 (Dow Jones) Smithfield Foods (SFD) apparently has cooled on beef
processor IBP (IBP). CSFB analyst David Nelson says that after talking with
the big pork company's chairman, Smithfield values IBP stock at around $10 a
share - well under its current price. Nelson says weakness across the
meat-processing sector "could put other properties in play." (RLG)
10:08 (Dow Jones) Starbucks' (SBUX) swoon in recent days makes for a buying
opportunity, says Salomon Smith Barney's restaurant analyst. "Investors may
be underestimating the cost savings" that the coffee retailer apparently
generated in the March quarter, Mark Kalinowski says. "We expect good news
from Starbucks when it releases earnings" April 26. (RLG)
10:01 (Dow Jones) Wanna know when the bull market will be back? Manhattan
cleaners have their own way of calculating what the markets are doing,
Joanna Coles reports in UK's The Times. They study the length of the
cigarette butts outside office buildings. In good times, the butts are long
because workers rush down for a few quick puffs before eagerly returning to
their desks. When the markets dip, they "suck until they reach the filter."
(NK)
9:48 (Dow Jones) Salomon Smith Barney analyst Jonathan Joseph trimmed his
numbers on Intel (INTC), citing weaker than expected demand for the chip
giant's flash memory and communications businesses. The analyst lowered his
gross margin estimate on Intel for the 1Q to 49% from 51% and cut his full
year 2001 revenue forecasts to $26.4 billion from $26.8 billion. While
Joseph maintained his 1Q revenue estimate of $6.5 billion, he did lower his
EPS estimate to 15 cents a share from 16 cents. (DLF)
(END) DOW JONES NEWS 04-09-01
11:58 AM
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