(DOW JONES) DJN: DJ MARKET TALK: Triple-Witch Week Could Pressure Dow
DJN: DJ MARKET TALK: Triple-Witch Week Could Pressure Dow
Edited by Thomas Granahan
Of DOW JONES NEWSWIRES
(Call Us: 201 938-5299; All Times Eastern)
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10:53 (Dow Jones) The Dow Jones Industrial Average, which dipped to close
below the key 11000 level last Friday, could continue to be vulnerable this
week as traders hedge their June put positions in the Dow Jones Industrial
Average Index, or DJX, notes Bernie Schaeffer of Schaffers' Investment
Research. This week marks the "triple witching" expiration of stock-option,
index-option and futures contracts, and the blue-chip decline could
accelerate as each put strike price is penetrated, he noted. (KT)
10:49 (Dow Jones) There's more downside in the homebuilders, says Arnhold
technician John Roque. The group is topping, and reports of homeowners
falling behind on mortgages won't help. Centex (CTX) and Lennar (LEN) have
risk to $30, Pulte (PHM) to high $20s, KB Home (KBH) to $20, and Toll Bros.
(TOL) to $25. He also says Freddie Mac (FRE) and Fannie Mae (FNM) should
have trouble moving higher from current levels. (TG)
10:35 (Dow Jones) Despite a 232 basis-point contraction in junk bond spreads
through May this year and heavy new issuance, it's too early to call a
bottom in the high-yield market, says Moody's. The still disproportionate
amount of downgrades versus upgrades and a fast-rising default rate
"preserve the possibility of another sell-off," the rating agency warns.
(RTB)
10:29 (Dow Jones) Sept. Nasdaq breaks support at 1800 and brings down S&Ps
as selling pressure steps up. Locals main drivers behind selloff, which
explains part of the light volume. Sept. Nasdaq needs to hold 1795 or a trip
to limit down, 85 points lower, is possible. (DMC)
10:26 (Dow Jones) Research In Motion (RIMM), maker of the BlackBerry e-mail
pager, is off 11% after Merrill Lynch analyst Virginia Genereux cut her
intermediate-term rating on the stock to neutral from accumulate. Genereux
also cut her revenue forecasts for RIMM's fiscal second and third quarters,
citing concerns about oversupply in the U.S. Genereuex believes the
inventory concerns are a short-term problem and she maintained her long-term
buy rating. RIMM is scheduled to report its first-quarter results June 21.
(SEW)
10:18 (Dow Jones) Falling natural gas prices have taken the momentum and
investment urgency out of the oil and gas exploration and production sector,
said Stifel Nicolaus & Co.'s Gary Clark and Andrew Lees. The analysts have
cut their commodity price forecast by 7% in 2001 and 5% in 2002. Ratings on
a number of stocks in the sector also have come down. Still, the analysts
retain their positive outlook for the group. (CCC)
10:12 (Dow Jones) The Richmond Fed released only the manufacturing part of
its regional business conditions index, which showed manufacturing shipments
at -20 versus -25 in April. Service-sector survey has yet to show up on
Richmond's site. (SV)
10:07 (Dow Jones) The Philadelphia Stock Exchange today began trading 21 new
options on companies including American General (AGC), J.C. Penney (JCP),
Kimberly Clark (KMB), Kroger (KR), Providian Financial (PVN), and Virata
(VRTA). (KT)
10:03 (Dow Jones) The U.S. saw large net equity inflows in week ending June
8, led mainly from the UK, a UBS Warburg report shows. The U.S. gained $503M
while UK, European outflows totalled $285M, $56M respectively. Asia/Pacific
saw only its second week of outflows in past 10-weeks at $162M. (AES)
9:56 (Dow Jones) Weakness in Sept. Nasdaq is expected to continue, which
could cause the market to break support at 1800, floor traders say. Beneath
there some buying support might be found around 1795. Because of recent
losses contract might be due for a bounce, but any upside is limited.
Resistance seen at 1858 and 1875. (DMC)
9:47 (Dow Jones) FirstEnergy (FE) and its merger partner GPU Inc. (GPU)
filed a merger settlement with the Pennsylvania Public Utility Commission
late Monday. Lehman Brothers' Daniel Ford thinks the deal, which has broad
support from a number of interest groups, will be approved by the PUC
commissioners on Thursday. Although gaining approval for New Jersey won't be
easy, the worst may be over. With the uncertainty surrounding the deal
easing, Ford upgraded FirstEnergy to strong buy Tuesday. (CCC)
9:42 (Dow Jones) Nokia (NOK) off nearly 20%, putting pressure on broader
market. Nasdaq telecom index sheds 3.4%, Nasdaq 100 off 2.9%. Intel, H-P
among weaker Dow names, along with Honeywell and GE. P&G, Exxon lead the way
on blue-chip index. DJIA off 37 at 10885, Nasdaq drops 46 at 2124, and S&P
500 falls 8 to 1246. (TG)
9:35 (Dow Jones) Nymex crude seen opening 15-20 cents a barrel lower as
flood waters recede in Gulf Coast. Remnants of Tropical Storm Allison now
over and Alabama and Houston's recovery from storm- and flood-induced damage
is underway. Traders turn next to inventory data, which is expected to show
a nearly 22-month high in total crude stocks holding. Iraq's halt of
UN-sanctioned oil exports seen limiting losses. July crude -15c at $28.89 in
overnight trade. (MSX)
9:28 (Dow Jones) Advest cut Oxford Health (OHP) to buy from strong buy on
fears the Senate's patient's bill of rights, led by Sens. Kennedy, McCain
and Edwards, will make the HMO a prime target of trial lawyers. Might not
lawyers go easy on HMOs if given broader rights to sue? "Suggesting that
trial lawyers might exercise restraint is like suggesting that piranhas are
concerned about the long-term viability of their habitats during a feeding
frenzy," says analyst Rob Mains. (RJH)
9:17 (Dow Jones) The strong dollar is making Treasurys look good to
foreigners, who have bid them higher in recent sessions. Today, a 3% drop in
the Nikkei, and ugly retail price index in the UK and CPI in France, helped
to fuel some buying in Treasurys. Lower stock futures here, thanks in part
to a warning from Nokia, is sustaining the bid in New York. (SV)
(END) DOW JONES NEWS 06-12-01
10:53 AM
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