Talk Of Economic Rebound Might Be Misguided
Edited by Ray Hennessey
Of DOW JONES NEWSWIRES
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12:46 (Dow Jones) Morgan Stanley economist Stephen Roach says, "I think the
U.S. economy will be lucky to escape with a U. At a minimum, the lags point
to plenty of downside in the pipeline - very much at odds with newfound
recovery hopes now percolating in financial markets." (JC)
12:35 (Dow Jones) CME sees first quarter net income of $20 million, or 69
cents a share. This compares to a 10 cent per share loss in 1Q 2000, the
exchange said. (DMC)
12:20 (Dow Jones) Expedia (EXPE) delivered a sunny pre-announcement for its
fiscal third-quarter results Monday. The online travel outfit and Microsoft
(MSFT) spinoff expects to post positive cash earnings of 9 cents a share on
revenue of $110 million. Analysts had been expecting a cash loss. The
quarter will mark the first time Expedia has reported positive cash EPS.
Prudential analyst Mark Rowen said Expedia shares are likely to rise on the
improving fundamentals, but he cautions investors should bolster themselves
for turbulence as the airlines further develop their own online efforts -
and as the possibility of airline employee strikes remain on the horizon.
Expedia shares are up 9% at $19.19. (RS)
12:11 (Dow Jones) Something to chew on on Tax Day 2001: GAO estimated that
on about 510,000 tax year 1998 individual tax returns, taxpayers didn't
itemize their deductions but had mortgage intereet payments that exceeded
the standard deduction amount for their tax filing status. "We estimate the
taxpayers may have overpaid their taxes by about $311 million," GAO said in
a new report. (JC)
12:02 (Dow Jones) N.Y. stocks headed into the noon hour down, but it's no
bloodbath. Dow Jones Industrials are off 2 to 10124.53, while the Nasdaq
Composite is down 33 to 1928.44. S&P 500 has lost 5 points to 1179.14. (RJH)
11:57 (Dow Jones) Merrill Lynch analyst Henry Blodget dropped his near-term
estimate on DoubleClick (DCLK) to neutral from accumulate after its
first-quarter earnings announcement last week. He kept his long-term buy
rating, though he's not expecting any rebound in the stock soon.
"Expectations are now very low (a positive), but we expect the stock to
continue to tread water between $8-$12 until business stops deteriorating,"
he says. (RJH)
11:47 (Dow Jones) Equity funds saw broad-based inflows last week for the
first time since Jan. 31, including a return to inflows in health
care/biotech funds, U.S. Bancorp Piper Jaffray's Brian Belski says. On the
downside, tech funds saw their second-straight week of outflows, while
financial services saw their eighth bad week. Growth, equity income and gold
and natural resources all saw inflows. (RJH)
11:38 (Dow Jones) Here's a web site lacking the usual problem of figuring
out how to monetize its visitors: www.IRS.gov. Traffic to the government
site from people surfing at their jobs surged 61% in the week ended April 8,
according to Nielsen/NetRatings. Unique visitors for the week topped a
million as anxious taxpayers sought advice or filed their returns online.
(RS)
11:30 (Dow Jones) Merger talks between Mack-Cali (CLI) and Reckson
Associates (RA) have broken off. The two REITs had been negotiating for
several weeks when talks hit a snag last week. A $200 million severence
package to Reckson's top seven executives and Mack-Cali's role in the
combined company were among the issues that led to the talks breaking off,
one person familiar with the situation told Dow Jones. The chief executives
of both Mack-Cali and Reckson declined to discuss the reasons for the talks
ending. However, Reckson Chief Executive Scott Rechler said, in general,
"employment contracts and severence would never be an impediment to doing
the right thing." Rechler noted that "our family are big owners" in Reckson
and would therefore want to do what's best for the company. (JKM)
11:23 (Dow Jones) Of the 700 or so companies to report earnings this week,
listen carefully to IBM (IBM), suggests Greg Smith, Prudential's chief
investment strategist. "I think IBM is a pretty key report, as we will
likely see them make the quarter but could hear something discomforting on
the second-quarter outlook." (RJH)
11:15 (Dow Jones) Wachovia (WB) is trading at a premium to First Union's
(FTU) bid, suggesting investors expect rival to step in with a sweeter
offer. Under the terms of the merger agreement, announced Monday, First
Union is offering two of its shares for each share of Wachovia. Based on
First Union's recent stock price of $29.85, Wachovia is valued at $59.70.
Wachovia, however, changed hands recently at $61.80, a $2.15 premium to
First Union's offer. "The possibility of other buyers is the sole reason it
is trading at a premium," said one takeover trader. (JAW)
11:08 (Dow Jones) Credit Suisse analyst Larry Raiman is rejiggering his
ratings on REITS, becoming "slightly more opportunistic with a few office
names and taking some profits off the table in health care." He's raised
Equity Office (EOP) to buy from hold and SL Green (SLG) to strong buy to
buy. Cut, though, from buy to hold were Health Care Property (HCP) and
Nationwide Health (NHP). (RJH)
10:59 (Dow Jones) Joining a growing chorus on Wall Street, Credit Suisse
First Boston analyst Mark Kastan expects XO Communications (XOXO) to
announce a scaled back business plan by April 26, when it reports
first-quarter results. He still rates XO Communications at strong buy. (CBN)
10:51 (Dow Jones) If successful, U.K. reinsurer Benfield Greig's bid for
E.W. Blanch (EWB) will make it the third largest reinsurance intermediary in
the world behind Aon (AOC) and Guy Carpenter, a unit of Marsh & McLennan
(MMC), Merrill Lynch says. The offer is 13.5-times Merrill's 2001 earnings
estimate and under one-times revenue. "We note that our confidence in these
estimates has been low," the firm said. Merrill removed its rating on E.W.
Blanch on Monday, given the pending acquisition. E.W. Blanch recently traded
up 63.3% to $13.10 on news of the merger. (CUB)
10:43 (Dow Jones) Strong flows into stock mutual funds in the latest period.
Stock funds took in $5 billion over the two days ended last Wednesday, the
highest since the $6.3 billion inflows for the period ended March 8,
according to TrimTabs.com. The fund tracker's analysis: The number indicates
"the public has not given up on the stock market," and that the continued
outflows in the previous weeks meant people were "merely raising cash in
order to pay capital gains tax." (YXH)
10:35 (Dow Jones) Though faring better than Nasdaqs, June S&Ps are still
searching for footing amid low volume. "They are so choppy now - can't seem
to get direction," said one floor trader, who cited lack of players and
mainly locals supporting volume. (ZHS)
10:30 (Dow Jones) Morgan Stanley analyst Mark Edelstone warned Monday that
semiconductor investors should brace themselves for another "sharp"
sequential decline in revenue for the second quarter. The analysts, who
trimmed his estimates on Intel (INTC), Broadcom (BRCM), Lattice
Semiconductor (LSCC), and Xilinx (XLNX), said year-over-year revenue growth
will continue to fall until Aug. or Sept. and remain negative until the
first quarter of '02 or early in the second quarter of '02. On a bright
note, Edelstone said that easier earnings comparisons, stronger economic
fundamentals and the completion of the current inventory correction, will
enable chip companies to have sequential revenue growth sometime in the
second half of the year. (DLF)
(END) DOW JONES NEWS 04-16-01
12:46 PM |
