MARKET TALK: Sleepy Session Has Dow Up 12, Nasdaq Off 12
Edited by Thomas Granahan
Of DOW JONES NEWSWIRES
(Call Us: 201 938-5299; All Times Eastern)
MARKET TALK can be found using code N/DJMT
1:46 (Dow Jones) Stocks muddling through a sleepy session. DJIA up 12 at
10961, Nasdaq slips 12 to 2157, and S&P 500 off 3 at 1253. Upside in coming
sessions may be limited by worries hanging over the market on the earnings
front, and there is some vital economic data on tap over the next few days.
In fact, the Beige Book is coming up shortly. Internets worst group of the
day, followed by communication technology. (TG)
1:26 (Dow Jones) Mike Mayo, Pru's bearish banking analyst, has raised his
price target on Bank of America to $66 from $60: he believes the Charlotte
banks's restructuring story "has legs." And, he added, "the cyclical
weakness is not so bad in our view. We believe BAC is a unique restructuring
story in an industry facing a major structural speed bump." He expects the
company to earn $4.90 a share in 2001, up from last year's $4.72. Shares
were recently up 0.45, or 0.8%, at 59.55. (TAS)
1:09 (Dow Jones) So, does this mean you don't like how things are going at
JDS (JDSU)? Wit SoundView analyst Kevin Slocum has this to say: "Business
stinks, our numbers are too high, and it's time to get them down." Cuts FY02
rev view to $2.7B from $3.5B and EPS to 18c from 38c. Also can't rule out a
miss in current quarter because company still hustling for business. Sees
limited downside at $15 a share, but upside is limited beyond $20-$21.
Shares off 1.4% at $14.89. (TG)
12:53 (Dow Jones) Uncertainty over Iraq's continued export halt is keeping
oil prices from falling as they would otherwise, Dow Jones' Energy Matters
column says, citing key data called a "good indicator" by Saudi Oil Minister
Naimi. When crude stocks in the US Midwest, including the Cushing, Okla.,
NYMEX contract delivery point drop to near 60 million bbl the oil price
"really spikes," Naimi says. When stocks are 70-72 million bbl "the price
plummets." The indicator stands up historically, and latest EIA data says
June 8 stocks stand at 70.5 million bbl, down from near 72 million a week
ago. That suggests price weakness, but the Iraq situation is overwhelming
the fundamentals. (DCB)
12:29 (Dow Jones) One group left out of the Kraft IPO (KFT) were Philip
Morris (MO) shareholders. Some investors apparently thought that the Kraft
spinoff would ultimately give them shares in the food company. But this deal
was a carve-out, not a spinoff, and Philip Morris has said all along it
intends to retain the Kraft shares it still holds. (RJH)
12:21 (Dow Jones) Sep S&Ps and Nasdaq are firmer, trading near session highs
as the markets ready for the lunch hour. The positive trade bodes well for
further gains going into the p.m. Next event to watch is beige book. (DMC)
12:16 (Dow Jones) Lehman remains confident in Bed Bath & Beyond (BBBY) 1Q
estimate of 10c. Doesn't see upside potential to that number, but says
company well positioned to post strong gains in back half of year. (TG)
12:02 (Dow Jones) Rep. LaFalce, ranking Democrat on House Financial Services
Committee, serving up a soundbite in advance of tomorrow's hearing
"analyzing the analysts," says he's "increasingly concerned industry
self-regulation may not be sufficient to guard against the problems and
abuses we are seeing...." (JC)
11:49 (Dow Jones) The Fed's Ferguson is warning that there's a risk
consumers may cut their spending activity. He adds the economy is currently
growing quite slowly. (MSD)
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)
(END) DOW JONES NEWS 06-13-01
01:51 PM
*** end of story *** |
