Key Move In June Nasdaq
Edited by Thomas Granahan
Of DOW JONES NEWSWIRES
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10:12 (Dow Jones) June Nasdaq just crossed an important resistance area of
1685-1690, floor traders say. The move could help rally hold. (ZHS)
10:08 (Dow Jones) Yahoo! (YHOO), known for its archetypal New Economy
management style, is getting a seasoned Old Economy media veteran as its new
chairman and CEO. After searching for more than a month for a successor to
Tim Koogle, Yahoo! has hired Terry Semel, a 24-year veteran of Warner Bros.
who worked as the studio's co-chief executive until 1999. Investors are
likely hoping Semel has what it takes to diversify Yahoo!'s revenue streams
and help it overcome the slowdown in online advertising. Still, the news has
failed to lift Yahoo!'s stock, which was recently off 1%. (RS)
10:03 (Dow Jones) Merrill says its pricing and channel checks indicate
Intel's (INTC) March saw meaningful improvement relative to February, so the
firm doesn't believe its 1Q estimates are at risk. The bad news is that
those estimates are so low - 15c a share for the quarter on revenue of $6.6
billion, down 17% year-over-year and 24% sequentially. In near-term,
aggressive pricing on P4 should have little impact, but the overall outlook
for remainder of the year is unclear. Conference call at 5:30 p.m. ET. (TG)
9:50 (Dow Jones) The corporate bond default rate will be "higher this year
than in the last 10 to 12 years," says Barry Ridings, managing director at
Lazard Freres. The $18 billion in defaults in the 1Q of this year alone were
the equivalent of the "fourth best year ever," he adds. (MCB)
9:42 (Dow Jones) Stocks get off to weak start. Just three of 30 DJIA
components - IBM, SBC and J&J - show gains. Intel leads way lower with 3%
drop as Street awaits earnings tonight and worries about pricing. Nasdaq off
1.4%, with computers, telecoms soft. Cisco down 6.5%. DJIA loses 74 to
10085, Nasdaq drops 23 to 1885, and S&P 500 eases 7 to 1172. (TG)
9:35 (Dow Jones) Schering-Plough (SGP) may have exceeded earnings
expectations by two pennies and in some cases revenue views for the 1Q, but
the comparisons were against worst-case scenario guidance emanating from
problems at some manufacturing plants. The drug maker earned $564 million,
or 38 cents a diluted share, that fell 10% from a year-earlier's net income
of $628 million, or 42 cents a share. Thomson Financial/First Call survey of
analysts put earnings at 36 cents a share. Total sales were $2.32 billion,
down from $2.39 billion a year ago, as a result of an 8% decline in the U.S.
pharmaceuticals market. (BMM)
9:31 (Dow Jones) Goldman Sachs economists say "prospects for a prolonged
inventory adjustment point to the probability of continued weakness in
orders and shipments over the coming months. In turn, that should increase
pressure for business cost reductions to mitigate the resulting profit
squeeze, which likely will further undermine the overall demand for labor."
(JC)
9:27 (Dow Jones) Nymex crude futures are seen opening 15-20 cents a barrel
lower on profit-taking. Early expectations of a build in API's report of
crude inventories also seen bearish. But product supply concerns persist.
May crude, down 20c at $28.59 in overnight trade on ACCESS, has support at
$28.50; resistance is seen at $29.40. (MXF)
9:22 (Dow Jones) Most analysts are cutting earnings and revenue estimates
for Cisco (CSCO), in line with the company's reduced guidance. Credit Suisse
First Boston analyst Lissa Bogaty cut her 3Q earnings view to a penny per
share from 5 cents. Merrill Lynch analyst Michael Ching was surprised at the
size of the $2.5 billion excess inventory charge, which he says signals
weaker-than-expected demand over the next 12 months. C.E. Unterberg Towbin
analyst Martin Pyykkonen doubts Cisco's assertion that the overall
networking market will grow 30% to 50% over the next three to five years. He
says 20% to 30% growth is more reasonable. (PDL)
9:19 (Dow Jones) Industrial production is first increase in six months,
suggesting the manufacturing decline is winding down, and manufacturers
getting hold on inventories. (TG)
9:14 (Dow Jones) The Philadelphia Semiconductor Index opens today at 576,
exactly where it started the year. What a ride it's been. On a closing
basis, the index has been as high as 732, on Jan. 31 and as low as 463, on
April 4 - a swing of 269 points in three-and-a-half months. (KJT)
9:09 (Dow Jones) Warmer weather helped retailers to a more robust
performance last week, with Redbook reporting a 1.4% rise and BTM-UBSW
reporting an 0.5% weekly rise, the strongest weekly increase for that index
since Feb 17. (JNP)
9:07 (Dow Jones) Prudential out reiterating sell rating on Biogen (BGEN).
First-quarter numbers were solid, but Pru says 2001 may prove to be the
"calm before the storm" as a result of impending competition to the
company's Avonex (Rebif) in its traditional safe haven, the U.S., by 2002 or
2003, and as a result of the company's price-oriented selling tactics in
Europe. Firm says early launch of Rebif a real possibility and one which
could potentially create a considerable drag on Biogen's EPS. (TG)
8:59 (Dow Jones) As expected, the forex market has punished the euro for the
ECB's failure to cut rates last Wednesday. "We're going to see the real
reaction to the ECB," says one analyst. Clearly the market was just waiting
to sell euros. EUR/USD is at $0.8776 and USD/JPY is at Y123.85. EUR/JPY is
2% lower at Y108.75. (JRH)
8:52 (Dow Jones) Bank of New York (BK) credit quality remains surprisingly
strong, Merrill says. The company seems to have been aggressive in unloading
problematic credits, and Merrill says that while lower rates have hurt
spread income, the bank may be in good position to begin to releverage its
balance sheet into low-risk investments. Reiterates buy, 12-month target is
$75. (TG)
8:46 (Dow Jones) The biggest energy price drop in seven months is unlikely
to be repeated, says Barclays' Henry Willmore. He says that the rise in
energy prices, plus hikes in California electricity rates, will start taking
effect in subsequent CPI reports, and will add some upward pressure to the
indicator. (MSD)
8:41 (Dow Jones) Cisco (CSCO) will take a hit early Tuesday, but Lehman says
the shares may trade modestly higher in coming sessions. Cisco hasn't yet
seen concrete signs of improvement, but Lehman says investors could be
encouraged that Cisco may see a bottom in the 4Q, with quarter-over-quarter
improvements starting in the 1Q. Upside may be limited to $19-$20, though,
given long-term valuation concerns. (TG)
8:34 (Dow Jones) Stock futures not showing much reaction to generally
in-line data. Inflation remains a non-factor, the housing market is holding
up OK. Industrial production reading a little after 9:00 a.m. ET will be
big. S&Ps off 9 points, DJIA off 55. Tsys also not doing much. (TG)
8:30 (Dow Jones) Stocks will get beat up a bit Tuesday morning, with Cisco
(CSCO) shares taking a 10% hit in pre-market dealings. In case we were
starting to forget, CSCO reminded us that things are still fairly grim on
the IT spending front. As the session progresses, it will be interesting to
see if Cisco, and other techs, can bounce, a reflection of just how much
this news was already discounted. Johnson & Johnson (JNJ), Schering-Plough
(SGP) and Enron (ENE) top views, while Kodak (EK) and Sprint (FON) miss. If
there aren't enough profit reports to keep you busy, there are a number of
economic readings that may sway trading - prices at the consumer level,
weekly retail sales data, housing starts, and industrial production all on
tap this morning. (TG)
(END) DOW JONES NEWS 04-17-01
10:12 AM
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