MARKET TALK: Rally On Light Volume Won't Change Anything
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
10:55 (Dow Jones) As things stand, all the major indexes remain in
short-term downtrend, so a big drop in volume on a further rally would
probably indicate a short-lived, counter-trend move, says Hilliard Lyons
technician Dick Dickson. Here are the levels to watch: 10900 on DJIA, 1250
on S&P 500, and 2100 on Nasdaq. A close above these levels would be good
indication that rally is more than just short-term counter-trend move. (TG)
10:43 (Dow Jones) The cat's out of the bag. Keefe Bruyette analyst Thomas
Theurkauf downgraded shares of Dime Bancorp (DME) to market perform from
outperform after a Wall Street Journal story said Washington Mutual (WM) is
reportedly in talks to acquire the New York institution. "While this fit
appears to be logical, in our view the market has fully discounted the
potential for an acquisition," he said, noting he estimates WaMu would pay
$38 to $40 a share for Dime. Dime was recently off 0.67, or 1.8%, at 37.41
(TAS)
10:37 (Dow Jones) Network chip-maker Multilink's (MLTC) 24% first-day gain
Thursday marks an important shift away from safer non-tech names in the IPO
market, says David Menlow of IPOfinancial.com. "The security that was
available from these big-name IPOs...are no longer on the wish list for
investors," he says. "We may actually be at the dawn of a new beginning in
which smaller, more speculative deals may come back into rotation." (RJH)
10:24 (Dow Jones) Tech space getting some welcome news from analysts. JDS
(JSDU), Nortel (NT) upgraded at Wit, and ABN Amro has nice things to say
about Research In Motion (RIMM). Results in 1Q looked good, and in weak
macro environment, says RIMM's ability to make numbers is more a function of
its own product cycles than reliance on strength in broader IT market.
Long-term growth chances and lead in wireless enterprise market remain
"stellar." Reiterates buy and $90-$100 price target. Shares up 2.3% at
$30.07. (TG)
10:11 (Dow Jones) EUR/USD continues to defy expectations of a test lower on
weak German data and is now at intraday high of $0.8548. USD/JPY heads to
low side of Y124, reflecting the "instability" of that level, trader says.
(JEN)
10:05 (Dow Jones) Zions Bancorp (ZION) CFO Dale Gibbons was suspended from
his post at the Salt Lake City bank after being arrested on drug possession
and related charges, the company said. While the stock is under mild
pressure early Friday, UBS Warburg analyst Robert Patten says that will
likely be offset by buying tied to the stock's addition to the S&P 500 Index
after the market close. "This does not impact our view on the company and we
reiterate our buy rating," Patten said. Shares recently off 1.36, or 2.3%,
at 58.18. (TAS)
9:56 (Dow Jones) Sept. Nasdaq holding gains in early trade. Market is
hitting resistance at 1776, which could keep the market at bay. Above there,
resistance is seen at 1793 and then 1815. Support comes in at 1755 and 1736,
which could uncover buying interest. (DMC)
9:45 (Dow Jones) Nymex crude seen 30-40 cents a barrel higher early on very
oversold technicals. Comments Thursday that OPEC may leave output unchanged
triggered a correction overnight and follow through is expected Friday,
analyst says. Resistance for Aug. crude, up 43c to $26.99 in overnight
trade, is seen at $27.40. (MSX)
9:40 (Dow Jones) Not much doing on major averages in the early going. DJIA
off 3 at 10714, Nasdaq eases 10 to 2048, and S&P 500 drops 2 to 1234. Merck
will put more weakness on Dow when the stock opens, expected between 67-70
after close around 74. SOX off 1.1%, AMEX Internet index down 1.2%. Telecoms
trying to add to very recent gains. Honeywell, Intel, American Express best
acting on Dow. (TG)
9:25 (Dow Jones) Micron Tech (MU) still appears well positioned as a low-
cost provider, Merrill says, but firm has concerns about demand and pricing
environment. Reiterates intermediate-term neutral and long-term accumulate,
cuts FY02 revenue and EPS view to $3.55B and 59c from $3.98B and 66c,
respectively. (TG)
9:11 (Dow Jones) Concerned about the slowdown in mass spectrometry orders
and continued weakness in the DNA sequence analysis market, Credit Suisse
First Boston analyst Meirav Chovav downgraded Applera Corp.-Applied
Biosystems (ABI) to hold from buy. She isn't sure the genomic-tools company
will be able to deliver revenue and earnings growth over the next few
quarters. Even though her fiscal 4Q views of $422 million in sales and 24
cents a diluted share are below company guidance and consensus, Chovav
thinks there could still be downside to her numbers. (BMM)
9:04 (Dow Jones) You want ugly charts? We've got ugly charts, via Lehman
technician Jeff deGraaf: Active Power (ACPW), Noble Drilling (NE), Diamond
Offshore (DO), Orion Power (ORN), and El Paso Corp. (EPG). (TG)
8:56 (Dow Jones) The reversal in jobless claims reported Thursday was too
abrupt to be totally credible, says UBS Warburg's Maury Harris. Also, trade
gap data provide some downside risk to his 2Q forecast of a 1% contraction
in real GDP growth. Taken together, the reports don't alter his call for
half-point cut. (TG)
8:49 (Dow Jones) Junk bond mutual funds reported cash outflows of $633.2
million for the week ended June 20, marking two straight weeks of outflows,
according to AMG Data Services. (JD)
8:41 (Dow Jones) Bear Stearns analyst Amy Butte was quite surprised with the
9% climb in Morgan Stanley Dean Witter's (MWD) stock Thursday after the firm
beat Wall Street expectations. Butte says Morgan Stanley's 18.6%
return-on-equity in the 2Q doesn't represent the trough for the firm.
Butte's outlook is for an ROE of about 15% in the 3Q, a significant drop
from the 30%-plus return investors have come to expect, she said. (CUB)
8:36 (Dow Jones) Given magnitude of Symantec (SYMC) shortfall, Lehman
expects shares to trade to mid-$30s. Uncertainty over the 2H precludes firm
from recommending the stock at these levels. Collateral damage can be
expected in other names in the sector, though Lehman continues to recommend
Internet Security (ISSX), Network Associates (NETA), and VeriSign (VRSN).
(TG)
8:30 (Dow Jones) A profit warning from Merck (MRK) will put some pressure on
stocks in the early going, at a time when the recent advances on major
indexes is seen as somewhat suspect to begin with. Symantec (SYMC) is
getting buried after lowering 1Q views sharply, while Micron Tech (MU)
posted a wider-than-expected loss of 53c/share. Wall Street shrugged aside
some somber earnings news Thursday, and very well could do the same as
today's session progresses, but the current environment probably isn't
conducive to much more than a trading bounce. Market players will also
continue to make bets on next Wednesday's FOMC announcement, with a
quarter-point cut the most popular wager. A fairly rare data-free Friday,
but, in front of next week's FOMC gathering, there will be plenty to digest,
including durable goods and new home sales. Stock futures soft, Tsys
essentially unchanged. (TG)
(END) DOW JONES NEWS 06-22-01
10:56 AM
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