MARKET TALK: '02 Set-Top Box Sales May Ease At Sci-Atlanta
Edited by Thomas Granahan
Of DOW JONES NEWSWIRES
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11:45 (Dow Jones) Shares of Scientific-Atlanta (SFA) dropped nearly 11%
after an analyst meeting at the National Cable and Telecommunications
Association's annual conference prompted anxiety that the company's set-top
box sales could moderate in 2002. Management did not provide any updates to
guidance for either the current quarter or outlook for fiscal year 2002, but
analysts are anticipating some slowdown next year. (EGS)
11:34 (Dow Jones) CIBC sees Oracle (ORCL) posting 4Q results Monday that
meet analysts' estimates, but doesn't expect a positive outlook. Analyst
Melissa Eisenstat says her fiscal 2002 estimates ($12.9B in sales and EPS of
52 cents) are at risk and the weak economy isn't the only reason.
Competition in database software and gaps in its application product lineup
are also hampering the company, she says. (MLP)
11:24 (Dow Jones) The Congressional Budget Office recently compared the Dow
Jones Industrial Average to the rising stock prices of Fannie Mae (FNM) and
Freddie Mac (FRE). While the Dow soared 300% since 1990, the stock values of
the mortgage GSEs skyrocketed by some 1200%, according to CBO Chief
Economist Deborah Lucas. She added, "On general grounds, their shareholders
benefit from some of their retained subsidies." (DMK)
11:07 (Dow Jones) The upside established in stocks in recent months is
intact and the market is merely going through a short-term consolidation,
says Mark Minervini, of Quantech Research. Since the April 4 low on the
Nasdaq Composite, it has put in 13 accumulation days and only five
distribution days. Meanwhile, the Composite has delivered 28 up days and 19
down. "In other words, the advances vs. declines have continues to indicate
a tone of health and resilience," he says. (TG)
10:56 (Dow Jones) ADRs of Brazilian jet maker Embraer (ERJ) up 3.6% to
$40.31 in heavy trade after an oversubscribed secondary offering worth $650
million that priced at a discount Tuesday. (ADG)
10:42 (Dow Jones) Brazil's oil giant Petrobras (PBR) will probably offer
international debt in several days, a source familiar with the matter said.
Company representatives are meeting with market participants in New York
this week. Shares up 1.3% t $27.10. (SR)
10:35 (Dow Jones) Can the ad climate get any worse? Just as newspapers face
declining rates of ad revenue growth and TV broadcasters get their first
taste of a very slow upfront session, more bad news wafts on the horizon.
Analysts expect more gloom and doom Thursday when Bob Coen, the well-known
forecaster at Interpublic Group's (IPG) Universal McCann agency, updates his
outlook for U.S. advertising in 2001 and 2002. Lehman Brothers analyst Kevin
Sullivan sees Coen reducing his forecast for U.S. ad spending "by as much as
half," from 5.8% to 2-3%, and non U.S. spending to a lesser degree. Ouch!
(BS)
10:31 (Dow Jones) Despite rising losses - thanks to spiking bankruptcies and
the economic slowdown - three major credit card companies should post solid
second-quarter results from year-ago levels, said David Berry, director of
research at Keefe Bruyette & Woods. He expects Capital One Financial (COF)
to earn 70 cents a share, up 30% from last year, and reiterated his buy
rating; MBNA (KRB), rated market perform, is seen at 42 cents/share, up 24%
from last year. At Providian (PVN), he anticipates EPS of 80 cents, up 25%
from the year-ago 2Q, and reiterated his buy rating. (TAS)
10:21 (Dow Jones) Even though this week's oil inventory data should put to
rest any lingering thoughts of $3-a-gallon prices at the gas pump, the
stunning draw in crude oil supplies is supporting oil-stock prices
Wednesday. The Oil Service Index is up 2.7%. Tropical Storm Allison's
disruption of Gulf Coast operations may explain some of the withdrawl, but
it heightens concerns about the impact of Iraq's halt of oil exports. (CCC)
10:13 (Dow Jones) Don't believe the hype. Juniper Networks (JNPR) won't be
launching its M320 router any time soon, says SG Cowen. Analyst Christin
Armacost says her checks show the beta version of the new router hasn't been
shipped to customers yet, so the next Juniper product launch is "at least 6
months away." (MLP)
10:07 (Dow Jones) Apparently there's something that tops cheese on the NYSE.
Traditionally, representatives from a newly issued company ring the opening
bell at the exchange. But, despite the eagerly awaited debut of Kraft (KFT)
- which brought the Kool-Aid man and company execs to the floor - the
opening bell was rung by Cardinal Edward Egan, the Archbishop of New York.
(RJH)
9:58 (Dow Jones) To take advantage of the heightened option volatility this
"triple witching" week, when equity-option, index-option and futures
contracts expire, some investors are focusing on selling options to earn
premium. For stocks an investor might like to buy or sell, the investor
instead might sell near-term puts or calls, respectively, to capitalize on
this week's premiums, suggests Mitchell Kurtz, a vice president and
financial adviser at Advest. (KT)
9:51 (Dow Jones) MSDW's Stephen Roach says "our recession call will be wrong
if the American consumer doesn't capitulate. But I sense that this very
process of capitulation is now underway." (JC)
9:43 (Dow Jones) Nymex crude seen opening 25-30 cents a barrel higher on
huge draw in crude supplies reported by API and DOE/EIA. Although decrease
seen exagerated by storm-induced delays in U.S. Gulf last week, the draw
heightens jitters over second week of Iraqi halt to UN-sanctioned oil
exports. July crude, up 32c at $29.50 in overnight trade, faces resistance
at $29.40, then $30. (MSX)
9:38 (Dow Jones) According to First Call, there have been 117 profit
warnings issued for the quarter from S&P 500 companies, compared with 14
this time a year ago. There were 112 such pre-announcements in the 1Q for
the same period. "We recognize that many of these cautionary statements may
be the result of Reg FD, but 23.4% of the S&P 500 issuing advisories should
cause some concern in light of the recent rally in the indices," says Kent
Engelke, of Anderson & Strudwick. (TG)
9:25 (Dow Jones) Don't expect a huge jump in the price of Kraft (KFT) when
it starts NYSE trading later this morning. Two factors work against it.
First, there were 280 million shares sold, most of which will simply be held
by investors, suggesting little price volatility. Secondly, at $31, the deal
"seems to be fully priced," says David Menlow, president of
IPOfinancial.com. Menlow expects no more than a three or four-point rise.
(RJH) |
