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To: 2MAR$ who wrote (121)	6/20/2001 3:06:29 PM
From: 2MAR$	Respond to of 208838

DJ MARKET TALK: Market Action Ugly, But Low May Be Near 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 3:04 (Dow Jones) Despite Tuesday's discouraging reversal, there are some good technical signs, says Hilliard Lyons' Dick Dickson. The firm's momentum model is getting closer to oversold extremes, which are usually associated with important market lows. And the readings extend beyond just price momentum. The 10-day moving average of advancing vs. declining volume, for one, is at levels last seen at the April lows and before that at the October 1998 low. "In sum, while the current market action is ugly, we think that a sustainable low is close at hand," he says. (TG) 2:47 (Dow Jones) The 30-year is off its high after as-expected Treasury budget numbers. Some were concerned that the numbers would have been a bit higher, signaling the possibility of higher debt issuance down the road, says Lehman Brothers' Drew Matus. The long bond up 8/32 to yield 5.67%. (AEG) 2:35 (Dow Jones) Sen. Paul Sarbanes, D-Md., the new chairman of the Senate Banking Committee, says "I think the banking industry is better situated today to withstand the softening of the economy than it has been in the past." (JCC) 2:24 (Dow Jones) Most money managers are betting on a 50 BP Fed rate cut, according to the latest Ried, Thunberg poll. Sixty percent of 151 respondents see the 50, with the remainder sticking to the 25 BP that meets most primary dealers' expectations. (MSD) 2:12 (Dow Jones) The low in Sept Nasdaq is key, floor traders say. It's near Tuesday's low and traders say sell stops are likely building in that area. A move under 1571 could trigger further selling. (DMC) 2:08 (Dow Jones) More gloominess from MSDW's Stephen Roach, who says in latest missive, "America's downshift has dealt a harsh blow to the broader global economy. And the sudden and abrupt deterioration in the external climate is likely to put further pressure on the United States." (JCC) 1:57 (Dow Jones) No contest in race for today's best-performing group - home construction is running away with it. Lennar's (LEN) 2Q numbers and the company's outlook have the sector up 6.5% all told. In fact, of the group's 11 members, nine are up more than 5%, with Lennar up nearly 10%. The group's one-year return of 93% is the best of all Dow Jones industry groups during that time. (TG) 1:41 (Dow Jones) Declining profit margins are likely to remain on the menu for both casual-dining and fast-food chains the rest of the year, says J.P. Morgan's John W. Ivankoe. Higher labor costs will be matched by rising utility and beef bills, he says. Still, the analyst sees 2.5%-3% increases in same-store sales as achievable for full-service operators, as busy lifestyles and an aging population make dining out de rigueur. He rates Darden Restaurants (DRI) and Wendy's International (EAT) as buys. (RLG) 1:28 (Dow Jones) GKST economist Brian Wesbury says "we continue to believe that the U.S. is currently in a recession and that any rebound is unlikely until early 2002." (JCC) 1:25 (Dow Jones) USD/JPY trend higher is accelerated by Nikkei report that Bush adviser Lindsey told a Japanese daily that yen weakening is okay as long as it comes from structural reforms and not manipulation. Pair is now at Y123.90. At high above Y124, dollar was up nearly 1 1/2 yen from intraday low. EUR/JPY gaining also, helping EUR/USD to $0.8540. (JEN) 1:21 (Dow Jones) Everybody in the bond market is upbeat about Lehman (LEH) debt after the firm turned in stellar 2Q earnings. The fixed income market - which saw secondary market prices rise even as new issuance skyrocketed in 2Q - gets much of the credit for Lehman's performance. (CSE) 1:12 (Dow Jones) A big trade went down in Oracle's (ORCL) calls - or did it? Option investors who thought they saw more than 50,000 contracts of Oracle's December 20 calls trade Wednesday morning turned out to be mistaken; the large trade that showed up on many computer screens was the result of a bad print, confirmed a trader at Letco, the designated primary market maker for Oracle options at the CBOE. (KT) 1:08 (Dow Jones) Sen. Phil Gramm, R-Tex., after quoting "a famous oracle" on the subject of irrational exuberance in the equity market, says "anything irrational ultimately has to come to an end." (JCC) 1:00 (Dow Jones) Fed Gov. Gramlich says personal saving is vital for U.S. households to maintain their standard of living, and more work should be done to help consumers improve their financial outlook. He makes no mention of monetary policy or general economic conditions. (FL) 12:56 (Dow Jones) Merrill Lynch analyst Roberta Goodman said she expects the U.S. Senate to vote tomorrow to proceed on patients' rights legislation proposed by Senators Kennedy and McCain that would allow patients the right to sue their health insurance provider in federal court. After the vote tomorrow morning, debate on the bill should proceed and the amendment process begin with Senate Republians offering the first change around noon, Goodman said. The amendment process is critical in determining what legislation finally emerges from the Senate, and Democrats may not be able to block changes that weaken the Kennedy-McCain bill, she added. (JJO) 12:51 (Dow Jones) House Financial Services Chairman Oxley, says "the California energy crisis is not only bad for California, it's bad for America. There is no question that when a state must issue the largest municipal bond offering in history in order to purchase electricity, there is something seriously wrong with the system." (JCC)