MARKET TALK: Intraday Technicals Lose Some Steam
Edited by Thomas Granahan
Of DOW JONES NEWSWIRES
(Call Us: 201 938-5299; All Times Eastern)
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12:43 (Dow Jones) The Naz Composite just slipped under 2058.82 support. It's
now technically in synch with DJIA, which is around 10590.00 and well below
10650.00 resistance. (SC)
12:34 (Dow Jones) Although Rohm & Haas (ROH) representatives were present at
the Semicon West trade show, neither Rodel nor Shipley, its electronic
materials units, had display booths at the show. Although Salomon Smith
Barney's Gil Yang thinks this reflects the company's efforts to cut costs,
he is concerned that this may be symptomatic of low new-product visibility.
(CCC)
12:25 (Dow Jones) Deloitte Consulting is trying to rain on Accenture's (ACN)
parade in its market debut, taking ads in The Wall Street Journal and
Financial Times saying it is "pleased not to announce an IPO." The firm says
it is focusing on clients while "all of our competitors are rushing to the
capital markets," a Deloitte principal says. As for the ads' timing on a day
that should belong to Accenture? "Our intent is to hijack the news and try
to capitalize on it," he says. (RJH)
12:16 (Dow Jones) Drilling delays and disappointing gas production has
forced Louis Dreyfus Natural Gas (LD) management to reduce its estimates for
production growth to 5% from a range of 8% to 10%. Jefferies & Co. analyst
Frank Bracken said that since steady production growth is needed to keep
moving stocks higher in a declining gas price environment, he's downgrading
Louis Dreyfus to hold from buy. Bracken's 12-18 month price target falls to
$33 from $48. The stock is down 30 cents to $30.34. (CCC)
12:10 (Dow Jones) Weak economy. Limited visibility. Slowing orders. It's the
same song, just a different singer every day. Today, it's Digimarc's (DMRC)
turn to croon. The digital watermark technology company lowered its
estimates for the next 1 1/2 years and pushed back quarterly break-even
results, originally expected for the fourth quarter, for at least two
quarters. Digimarc, one of the biggest percentage losers on the Nasdaq, is
down $5.03, or 22%, to $17.83. (GS)
11:54 (Dow Jones) CSFB raises its estimate of 2Q GDP to 1.5% from 1% after
trade numbers. (MSD)
11:50 (Dow Jones) On its 2Q earnings conference call, Crown Cork & Seal
(CCK) says asbestos-claim costs for the first six months of 2001 totaled $52
million, which was approximately the same amount for the like period in
2000. (MCG)
11:43 (Dow Jones) Nymex crude oil futures take off after OPEC source says
there is a strong "likelihood" the cartel will cut output quotas by as much
as 1 million bbl ahead of a scheduled meeting in Sept. "It's very bullish
news," one analyst says. Venezuela's oil minister earlier said OPEC could
meet before Sept. to cut output. Comments follow earlier remarks by Saudi
Arabia's Naimi that OPEC has "no choice" but to reduce output ahead of Sept.
26 meeting to reverse recent price decline. Nymex Aug. crude now at $25.70,
+81c, facing resistance at $26.00. (MXF)
11:37 (Dow Jones) Prudential analyst John Barton sees Broadcom (BRCM) shares
breaking away from large-cap peers. With the bulk of inventory correction
behind, he sees continued demand for high-speed cable modems and a digital
upgrade cycle in cable set-top boxes to drive near-term results. Reiterates
buy rating and $56 target price. Shares up 13% at $44.32. (CD)
11:23 (Dow Jones) Congress's Joint Committee on Taxation estimates cost of
energy tax bill cleared by House Ways and Means Committee yesterday at $33.5
billion over 10 years. (JCC)
11:19 (Dow Jones) Medtronic (MDT) has had a tough time in patent courts. The
latest ruling, which said Medtronic's rapid-exchange balloons and stents
infringe on Boston Scientific (BSX), comes after patent losses to Guidant
(GDT) and Johnson & Johnson (JNJ) over the past three years. SG Cowen
analyst Matt Dodds thinks $220 million in sales and 4 cents in EPS are at
risk because of the ruling. Medtronic shares are up 60 cents to $47,90,
though. (RJH)
11:13 (Dow Jones) IBM among the most defensive plays in computers, but
Lehman says issues in the semi business are likely to turn around slower,
and macro environment internationally likely to be worse than expected.
Valuation is interesting at 23 times CY01 EPS, but timing still early given
further EPS risk. Dan Niles, by the way, is now the IBM analyst at Lehman,
following the recent departure of George Elling. IBM flat at $104.27. (TG)
11:00 (Dow Jones) Now that Accenture (ACN) is trading 4% higher in its
debut, the key will be whether the company holds its $14.50 offering price
in subsequent days, or suffers the fate of the last big deal, Kraft (KFT),
says David Menlow of IPOfinancial.com. The larger offerings, which were
popular earlier this year, have performed poorly lately. "Big is not
necessarily good for an IPO these days," he says. (RJH)
10:56 (Dow Jones) Convertible bonds, touted for offering the best of both
stocks and bonds, can actually have a "significant downside," says Moody's.
While issuance has grown over 50% per year over the past five years, a study
of defaults in the past 30 years shows issuers of convertibles are more
likely to default - 1.5% vs 1.0% for non-issuers. Also, recovery rates after
default are lower for convertibles - 29 cents vs 43 cents. (RTB)
10:46 (Dow Jones) Sept. Nasdaq up around 3% because people are "looking for
good bargains out there," says Rich DeFalco, managing director of West
Cooper Asset Management. However, DeFalco says he is not sure the bottom
fishing is enough to sustain the market. Cash indexes acting well: DJIA up
87 at 10657, Nasdaq Comp jumps 46 to 2064, and S&P 500 climbs 13 to 1220.
(CMN/TG)
10:37 (Dow Jones) Bear Stearns analyst Marc Falcone said as shares of Six
Flags (PKS) drop on soft first-half trends, investors should buy on the
weakness. He said the theme park company might have difficulty reaching his
2001 Ebitda projection of $460 million. However, he still thinks the company
can achieve 10% to 12% Ebitda growth for the year. (DDO)
10:29 (Dow Jones) Ariba (ARBA) beat previously lowered estimates for its
fiscal 3Q. It also announced the abrupt departure of CEO Larry Mueller,
who'd held that post for less than three months. Citing ongoing weakness in
the business software market and summer seasonality, Ariba forecasts fiscal
4Q revenues will decline sequentially and come in between $60M and $70M.
(RS)
10:22 (Dow Jones) As the first of the large U.S. integrated oils to report
earnings, Occidental Petroleum (OXY) gave Wall Street its first glimpse at
the sector, and the news was good. Occidental outpaced analyst estimates by
a wide margin aided by strong energy prices, particularly in California's
natural gas market. According to ABN Amro's Gene Nowak, other oil companies
will probably realize natural gas prices that are about half of the level
that Occidental achieved. Still, positive earnings surprises will be
widespread, and may help turn investor psychology more favorably toward the
group, Nowak said. (CCC)
10:15 (Dow Jones) WR Hambrecht's Jim Liang notes Broadcom (BRCM) continues
to see signs of business stabilization, and he says bottom is in sight.
Reiterates buy rating, $50 12-month target. Shares up 15% at $44.90. (TG)
(END) DOW JONES NEWS 07-19-01
12:43 PM
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