DJN: DJ MARKET TALK: An Ugly GDP Could Have Ugly Implications
(Dow Jones 08/28 13:19:21)
Edited by George Stahl
Of DOW JONES NEWSWIRES
(Call Us: 201 938-5299; All Times Eastern)
MARKET TALK can be found using code N/DJMT
4:18 (Dow Jones) A scary double whammy could hit the market Wednesday if the
revised 2Q GDP comes in below expectations. A number below the expected 0.0%
will not only surprise analysts, but it also will signal that the country is
halfway toward a recession. And we saw today how the stock market reacts to
surprising economic data. (GS)
4:04 (Dow Jones) The major stock indexes again ended near their lows for the
day. The stock market fell after the disappointing consumer confidence
figure at 10 a.m. and was never able to get back up. A vague Intel outlook
in the mid-afternoon boosted stocks temporarily but served as nothing more
than a blip. For the day, DJIA (preliminary) fell 160 to 10222; Nasdaq
dropped 47 to 1865; and S&P 500 lost 18 to 1162. (GS)
3:55 (Dow Jones) Comverse Technology (CMVT) will report 2Q earnings a few
minutes after 4 p.m., and analysts are expecting good things from the maker
of telecommunications systems. Lehman Brothers analyst Tim Luke sees "solid
numbers" from Comverse, while Robertson Stephens analyst Marianne Wolk
expects results "in line to slightly ahead" of expectations of $345 million
in revenue and 28 cents a share in earnings. Those numbers are from the
company's warning on July 11. (GS)
3:37 (Dow Jones) ABN-Amro lowers its 2001 and 2002 estimates on Rowan Cos.
(RDC) "to account for lower-than-expected 3Q utilization and greater
declines in dayrates than we thought was likely." The problem is the lack of
production from the company's 4 GOM-based Gorilla rigs, where 3Q revenue
will fall to $10 million from $25 million in the 2Q, ABN says. The company's
shares are down 26 cents to $16.26. (GS)
3:31 (Dow Jones) Deere's (DE) decision to sell its money-losing Homelite
consumer products business and restructure some operations drew mostly raves
from analysts. Michael L. Braig of A.G. Edwards isn't among them. "While it
is possible to develop some degree of optimism from efforts to reduce or
eliminate money losing operations, we see disturbing exposure to cyclical
products and markets with secondary brand positions," said Braig, in
lowering his rating on Deere to reduce from maintain position. Deere is off
11 cents to $43.80. (CCW)
3:24 (Dow Jones) More on the gloved one opening the Nasdaq Thursday. In
keeping with Michael Jackson's reputation for shyness, his handlers have
asked the Nasdaq Stock Market to close his appearance to the press.
Broadcast media can tap into Nasdaq's feed, and the public will be able to
get a peek at the event from the street. But reporters who are stll raving
about "Thriller" need not fret about being shut out, as the King of Pop
isn't expected to sing. (GFC)
3:13 (Dow Jones) Among the notable insider activity from July was $76
million in sales by Goto.com (GOTO) Director Bill Gross, $23 million in
sales by Jabil Circuit (JBL) Vice Chairman Thomas Sansone and $27 million in
sales by three Intel (INTC) execs. Dell Computer (DELL) insiders were the
only ones active among computer makers, selling $21 million worth of stock
in July. And then, of course, there was the $504 million of Microsoft (MSFT)
stock sold by Bill Gates. (RG)
2:55 (Dow Jones) There's enough evidence to forecast a stronger market over
the near-term but that's it, says Hilliard Lyons technical adviser Dick
Dickson. Best case for any short-term rally, he says, should be a test of
the top of the current trading ranges: 10600 for DJIA, 2100 for Nasdaq and
1225 for S&P 500. A breakout from those levels would point to a more
sustained rally but "we have no evidence to forecast a breakout." (GS)
2:38 (Dow Jones) The board of Rightime Fund Inc. approved a plan to
liquidate the Rightime OTC Fund, according to an SEC filing Tuesday. Under
the plan approved Aug. 15, the OTC Fund will sell or dispose of all of the
assets of the fund and will provide for the payment of all charges, taxes,
expenses and other liabilities and obligations of the OTC Fund not assumed
by other parties. No reason was given for the liquidation of the fund. (MW)
2:24 (Dow Jones) The summer doldrums may have investors down in the dumps,
but the Nasdaq Stock Market is going to try to give them a thriller. On
Thursday, Nasdaq will host the King of Pop himself, Michael Jackson, who
will preside over the market's daily opening ceremony as a kickoff to his
concerts at Madison Square Garden. (GFC)
2:12 (Dow Jones) The market is weak, and Dow component Procter & Gamble (PG)
certainly isn't helping matters. The stock is down 2.3%, but investors may
rest easy - fundamental flaws are not being attributed to the decline.
Sanford Bernstein's Jim Gingrich said that after the recent ride-up in the
stock, investors are merely enjoying some profit-taking. P&G, the
second-biggest percentage loser Tuesday on the Dow, recently traded at
$75.07. (CEG)
2:02 (Dow Jones) Stock sales by executives at technology companies slowed
considerably in July. Excluding the $504 million in Microsoft (MSFT) stock
sold by Bill Gates, technology insiders sold about $305 million worth of
stock in July, down from $542 million in sales in July. The decline in
sales, though, didn't translate into more buying, with only $145,000 in
purchases in July, down from $384,000 in June.
1:52 (Dow Jones) The DJIA has rebounded slighly in the past half-hour on
reports that Intel still expects a seasonal improvement in second half
demand. The news moved Intel to the top of the Dow gainers and made the
index jump more than 25 points. The DJIA has since given back some of that
gain, settling at 10281, down 100 points for the day. (GS)
1:38 (Dow Jones) Metron Technology (MTCH) expects revenue for the 1Q of the
fiscal year ending May 31 to be "substantially below" the $120.8 million
that it reported in the 4Q. The company said that during the fourth quarter,
it began to experience order cancellations, delays in booking new orders and
delays in shipping orders to customers. (CD)
1:14 (Dow Jones) Ford (F) is likely to cut its $1.20 annual dividend by
40%-50%, predicts Morgan Stanley Dean Witter, which adds that the dividend
cut is already discounted in the stock. However, in a WSJ story last week,
Ford Financial Chief Martin Inglis said he didn't see any reason to
recommend a dividend cut to Ford's board, given the company's cash strength.
Ford has $16.2B in the bank, an extra $6.5B in its pension fund and is
expected to save $400M annually from coming job cuts. (GS)
12:59 (Dow Jones) The North American market for programmable logic device
chips is stabilizing for Altera (ALTR) and Xilinx (XLNX), W.R. Hambrecht
says. Because of that, "the North American market will lead the
international markets to a recovery, starting in the December quarter and
continuing into 2002." The firm expects Xilinx and Altera to reaffirm their
quarterly revenue guidance in their respective mid-quarter updates. (GS)
(END) DOW JONES NEWS 08-28-01
04:19 PM
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