Stock Market At Proverbial Fork In The Road
( when you find a silver fork in the road ....take it !;-)
Edited by George Stahl
Of DOW JONES NEWSWIRES
(Call Us: 201 938-5299; All Times Eastern)
MARKET TALK can be found using code N/DJMT
10:36 (Dow Jones) Here are the support levels to watch, according to
Hilliard Lyons technical analyst Richard Dickson: 10,850 on DJIA, 1246 on
S&P 500 and 2100 on Nasdaq. "We suspect that the market is close to
resolving the question of where it is likely going for the next few weeks.
... Keep an eye on the support levels. A break probably means a further
correction. A successful test and bounce probably means a tradeable rally,
maybe even back to the all-time highs for the DJI." (GS)
10:25 (Dow Jones) Stocks continue their losses from Friday, albeit modestly,
as investors remain skeptical about pushing the market higher. DJIA down 24
at 10952. Nasdaq off 36 at 2179. S&P 500 losing 4 at 1261. Semiconductor and
networking sectors are dragging the techs lower. Intel, down 3%, is the
biggest loser on the DJIA. (GS)
10:14 (Dow Jones) The Patients Bill of Rights debate is expected to take
center stage this week, according to SG Cowen analyst Ed Kroll. In a
research note published Monday morning, he said he expects the Democrats to
introduce Sens. Kennedy and McCain's version of the bill this week, which
would be bad for the managed care industry. The bills gives consumers the
right to sue HMOs and caps punative damages at $5 million. Kroll said he
believes President Bush would veto the measure. (JJO)
10:01 (Dow Jones) Citing difficult markets for long-haul and metro-optical
network gear and Juniper Networks' (JNPR) profit warning, UBS Warburg
lowered its target on Nortel Networks (NT) to $15 from $18, and now expects
Nortel to post a loss of 17 cents a share this year, versus UBS Warburg's
previous estimate of a 10-cent-a-share profit. "Given our new outlook of
Nortel not turning profitable until the 4Q 2001, we wouldn't be surprised if
Nortel further reduced headcount beyond the planned 20,000 already
announced," UBS Warburg analysts Nikos Theodosopoulos and Michael Urlocker
said in a note Monday. (BED)
9:56 (Dow Jones) Longer maturities of Treasurys, especially the long bond,
extend gains modestly on remarks by Dallas Fed's Robert McTeer that
inflation picture is reasonably good, economy at or near bottom of slowdown.
30-yr Tsy up about 2/32 since McTeer's remarks, up 12/32 on session at 95
7/32, yield down 3bps at 5.71%. 10-yr Tsy up 1/32 since McTeer's remarks, up
9/32 on session at 97 19/32 yield dn 4bps at 5.32% (JNP)
9:52 (Dow Jones) It's a "Meat Loaf Market," says Arnhold & L. Bleichroeder
Vice President John Roque, because it's hard to tell what's it gonna be for
techs - good or bad? "We're all still wondering if we're ever going to find
Paradise by the Dashboard Light?" He says to watch the Philadelphia
Semiconductor Index and whether it breaks through the 700 level, where
resistance is obvious. "So crucial is tech's action at present that we are
either at the cusp of the summer swoon or the summer boom." The SOX is down
14 at 661. (GS)
9:40 (Dow Jones) Nymex crude seen 25-35 cents a barrel higher on
followthrough from Friday and reports of storm damage along the US Gulf
Coast. The remnants of Tropical Storm Allison struck Gulf Coast over
weekend, causing a fire at the Lyondell/Citgo refinery in Houston, and
closing the Houston ship channel. Iraqi oil export halt and uncertainty
about supply shortfall remain supportive. July crude, up 36c to $28.69 in
overnight trade on Access, faces $28.80 resistance. (MSX)
9:30 (Dow Jones) Long-standing litigation between medical device giants St.
Jude Medical (STJ) and Guidant (GDT) over patent cross-license transfers for
implantable electronic defibrillators begins today in Indianapolis,
according to SG Cowen Securities analyst Matt Dodds. Guidant is suing rival
St. Jude for damages and injunctive relief. In a research note published
Monday, Dodds said he likes St. Jude's odds given the outcome of Markman
hearings last year. Still, the company stock is likely to be volatile during
the case, Dodds added. A ruling will take several weeks. (JJO)
9:22 (Dow Jones) Prudential Financial says that according to D.C. buzz, Sen.
Carl Levin, D-MI, has issued a blanket subpoena to the Federal Trade
Commission for all internal documentation related to its investigations of
alleged price manipulation in the West Coast and Midwest retail gasoline
markets as well as its approvals of recent oil industry mergers. The firm
says the request from Levin, who plans to hold hearings on oil industry
profits this summer, is "unusually broad." But adds, "It looks to us like
preparations for some summer grandstanding are under way, though probably no
worse than investors already anticipated." (GS)
9:11 (Dow Jones) First, the dollar gained against the yen, now it's doing
well versus the euro and pound. GBP/USD hits new 15-year low, but a NY
dealer isn't surprised, as sterling has seen a new low every day for past
several days. "Technically the pound continues to be very weak," he says.
Pound drag is tied to euro's failure to make a break on the upside, he says.
EUR/GBP is at 61.26 pence; GBP/USD is at $1.3760; EUR/JPY is Y102.63;
EUR/USD is $0.8436 and USD/JPY is Y121.67. (JRH)
9:07 (Dow Jones) Quiet start to Fed funds, with HSBC only featured player
seen selling 500 of June at 96.01. Contract last down 1 bp at 96.01, while
July up 1/2 bp at 96.265, which still shows expectations for 25 bp rate cut
at June FOMC, broker says. (SPC)
9:02 (Dow Jones) UBS Warburg's Ed Kerschner says that although things are
bleak now, he sees the light at the end of the earnings tunnel. He expects
many warnings in the near term as 2Q will likely be the worst quarterly
decline of the profit cycle (with an S&P 500 EPS forecast of negative 14%).
However, he sees earnings improving in the 3Q (-5%) and 4Q (+8%) because of
the aggressive Fed ease, end of the inventory correction, boost from the tax
cut and companies' cost-cutting measures. Plus, he sees a 10-15% earnings
gain next year, based on easy comparisons. (GS)
8:47 (Dow Jones) W.R. Hambrecht expects Adobe Systems (ADBE) to beat its
revenue and EPS estimates by 3% to 5% when it reports its 2Q Thursday. That
translates into revenue of $353 million and earnings per share of 30 cents,
both above consensus estimates. However, W.R. Hambrecht doesn't believe
enough in its new expectations to officially raise its ADBE estimates. The
firm also sees ADBE issuing conservative guidance for the 3Q. (GS)
8:39 (Dow Jones) Any tech recovery is still far off in the future, according
to Anderson & Strudwick strategist Kent Engelke. He says the Nasdaq is
overvalued at 159x trailing and 84x anticipated earnings. "Eighty-four times
expected earnings require hyper growth, not stabilizing or reduced
cancellations of orders." However, because of huge cash hordes, the bottom
won't fall out. "We don't think the Nasdaq will trade below 1800, but rather
its upside may be limited to 2500." (GS)
8:30 (Dow Jones) Quiet start - assuming no more computer problems - for the
business week as major news isn't expected until later, such as the Kraft
IPO and some key economic data (retail sales, PPI and CPI). Of course,
because it's earnings preannouncement season, investors always have to be on
guard. Greenbrier (GBX), DuPont Photomasks (DPMI) and Powerwave Technologies
(PWAV) among those warning Monday morning. Elsewhere, Europe continues to
have issues with the GE/Honeywell deal, and Peregrine Systems (PRGN) agreed
to buy rival software company Remedy Corp. (RMDY) for $1.08 billion. For the
overall market, expect more sideways trading. Last week, the DJIA and S&P
500 were nearly unchanged, while Nasdaq gained 3%. Foreign markets mixed.
Dollar firm. Tsys modestly higher. Stock futures indicate slightly lower
open. (GS)
(END) DOW JONES NEWS 06-11-01
10:37 AM
*** end of story |
