8:58AM Gapping Up/Down : Gapping up: NVTL +39% (obtains financing, Piper upgrade), GSPN +8.6% (Needham upgrade), ADVP +5.1% (Weisel calls it best idea of 2002), chip and chip equipment stocks (rallying on news of Hynix DRAM price hike). Gapping down: INRG -5.2% (Salomon downgrade), GENZ -4.6% (Piper downgrade), UEIC -4.1% (warned), EBAY -2.8% (Robbie downgrade).
8:46AM SG Cowen on Med Tech : SG Cowen downgrades medical technology group to MKT NEUTRAL from Overweight, sees unfavorable impact on currency translation resulting from economic recovery weighing on group; top picks include ABT, BAX, MTD, RESP; Q4 best performers should be BAX, MTD, STJ, GDT, JNJ.
8:44AM BJ Services (BJS) 32.45: JP Morgan downgrades to MKT PERFORM from Long-Term Buy on valuation; recommends Hanover Compressor (HC 25.26) for those wanting exposure to the natural gas mkt.
8:39AM Genzyme (GENZ) 59.86: USB Piper Jaffray downgrades to MKT PERFORM from Outperform, sees 2002 as "a more challenging year for company fundamentals"; sees 3 keys to 2002 stock performance: Renagel quarterly sales performance, prospects for competitive product approvals in Gaucher's disease, and the competitive outlook in Fabry disease.
8:38AM DRAM Pricing : DRAM stocks higher overseas as Hynix Semi raised contract DRAM prices by 30%; Hynix rallied in Asian trading, with IFX and STM following suit in Europe.
8:37AM Genentech (DNA) 54.25: USB Piper Jaffray upgrades to OUTPERFORM from Mkt Perform, believes that concerns over valuation, Herceptin mkt saturation, and Xolair regulatory uncertainty are already reflected in the stock and sees a number of 2003-04 drug approvals providing future catalysts; sets $65 price target.
8:32AM Novatel Wireless (NVTL) 1.22: USB Piper Jaffray upgrades to OUTPERFORM from Mkt Perform with a $3.50 price target; says that viability trumps dilution as company secures financing.
8:29AM Opening Indications : The pre-market bias is mixed with the S&P 500 futures 1 point below fair value, the Nasdaq 100 futures are 9.5 points above fair value while the Nasdaq 100 PMI is up 9.7 points. Reports that South Korean chipmaker Hynix Semi had raised its price of chips it sells to PC makers has sparked some interest in the tech sector.
8:27AM Intel (INTC) 31.45: Banc of America is cautious on INTC, as capital expenditures are at 15-year high while return on capital is running at a 15-year low, divergence is not sustainable and will weigh on recovery. Firm sees high risk of correction in the semi equipment group, as INTC accounts for 20% of global spending on such equipment, and is expected to lower 2002 capex to $6.5 bln from $7.5 bln last year. Semi equipment names that could be affected include AMAT, KLAC, NVLS.
8:22AM Dollar General (DG) 14.90: Prudential upgrades to HOLD from Sell; cites the upcoming release of audited financial statements on Jan 14.
8:15AM BofA on Softline Retailers : Banc of America is positive on softline retailers, upgrades IBI, LTD, and ANN to BUY from Mkt Outperform; firm sees improving momentum yet low expectations at IBI, sees LTD tracking better performance at IBI; believes that ANN's Dec comps are running better than expected and new products are more appealing than last year's.
8:11AM Kmart Corp (KM) 5.46: Prudential downgrades to SELL from Hold.
8:04AM AdvancePCS (ADVP) 29.35: Thomas Weisel calls ADVP its "best investment idea for 2002"; says co is well-positioned to benefit from strong long-term fundamentals in the pharma industry; reiterates Strong Buy rating and price target of $44.
8:01AM Hughes Elec (GMH) 15.45: Thomas Weisel upgrades to STRONG BUY from Buy based on valuation, sets price target of $31.
7:58AM UBSW on E&P Group : UBS Warburg downgrades a number of names in the E&P group: APC and EOG go to HOLD from Buy, based on valuation and near-term nat gas pricing concerns; and BJS goes to HOLD from Buy based on valuation and concerns over continued slowdown in US gas drilling, Canadian drilling activity, and spending by US independent oil co's.
7:54AM GlobeSpan Virata (GSPN) 12.95: Needham & Co upgrades to STRONG BUY from Buy and raises price target to $27. Firm believes GSPN's balance sheet of $570 mln in cash (or roughly $4 per share) provides it with the resources necessary to continue to fund new product development. Firm forecasting 2001 EPS of ($0.02), 2002 of $0.06, and introducing a 2003 est of $0.54.
7:47AM Apple Computer (AAPL) 21.90: Gerard Klauer Mattison upgrades to OUTPERFORM from Neutral, as new desktops and the maturation of the Mac OS X operating system should accelerate an upgrade cycle among installed base; lowers FY02 est to $0.52 from $0.55 and establishes price target of $26. Firm expects stock to continue to run up before MacWorld Expo on Jan 7 and fall off afterwards.
7:38AM QUALCOMM (QCOM) 50.50: Announced that CDMA operators in N. America have begun receiving volume shipments of a range of third-generation (3G) CDMA2000 1X products.
7:36AM OfficeMax (OMX) 4.50: Appoints Michael F. Killeen to the CFO post following the resignation of Jeffrey P. Freimark. OMX said Mr. Freimark has accepted another senior level executive position outside of retailing which presented him with an opportunity in a location that was more geographically compatible with his personal preferences.
7:34AM Metalink Ltd (MTLK) 5.50: Co updates guidance for Q4; sees revenues of approx. $1.7 mln (First Call consensus $7.7 mln -- 1 analyst surveyed). Given that co logged revenues of just $1.2 mln in Q4, it is doubtful that this estimate is applicable. Co expects Book to Bill ratio for Q4 to be well over one and says that visibly with some of its customers has improved during the qtr.
7:32AM CSFB on Healthcare Providers : CSFB downgrades AHG and DIAN to BUY from Strong Buy; firm cites 3 factors that could pressure the stocks in 2002: 1) Medicare and Medicaid programs could be pruned, hurting providers; 2) healthcare stocks are too defensive in the early stages of an economic recovery; and 3) reimbursement rate environment in private sector could weaken by end of 2002.
7:28AM Opening Indications : This morning's fair value figures -- S&P 500 fair value: 1149, closed at fair value. Nasdaq 100 fair value: 1583, closed 1 pt above fair value. Current indications: S&P 500 futures are +2.2, or 2.2 pts above fair value. Nasdaq 100 is -0.5, or 0.5 pts above fair value... NAPM Index released at 10ET.
7:23AMMicrosoft (MSFT) 66.25: WSJ reports that some investors and analysts are urging Microsoft, which is sitting on $36 bln in cash, to return value to shareholders by offering a dividend. Analysts have extended the same advice to cash-rich technology companies Cisco and Oracle.
7:22AM INRANGE (INRG) 12.35: Salomon Smith Barney downgrades to OUTPERFORM from Buy, raises price target to $15 from $10.
7:14AM Level 3 Comms (LVLT) 5.00: Selected as the primary provider of broadband services for Sony Pictures Digital Entertainment's Screenblast.
7:13AM eBay (EBAY) 66.90: Robertson Stephens downgrades to BUY from Strong Buy, citing current valuation and the potential for higher future investments in biz and marketing to impact operating profits; raises FY01 rev/EPS ests to $744.5 mln/$0.49 from $742.5 mln/$0.48 and raises price target to $75 from $70.
7:12AM Fiber Glut : EBN reports that a panel of experts told the China Ministry of Information Industries that a rush of foreign and domestic suppliers into the China market threatened to create a glut that could have a similar devastating impact as in the rest of the world. The panel projected that annual production optic transmission equipment in China could reach 35 mln kilometers of fiber by 2004, although demand then will be only 20 mln kilometers. The panel urged the China government to take measures to cull back the rampup of fiber cable and equipment production. Article predicts that foreign suppliers could be especially hard.
7:07AM AT&T (T) 18.14: Merrill Lynch upgrades to Intermediate-Term BUY from Neutral, citing the potential for value creation from the new AT&T Comcast unit and the favorable impact the sale ofCMCSK will have on T's balance sheet.
7:06AM Univ. Electronics (UEIC) 17.21: Co reduces guidance for Q4; sees EPS of $0.25-$0.26 (including an projected tax benefit) on revenues of $27-$28.5 mln. Consensus estimates for the qtr are $0.25 and $32 mln. "Although our net sales were affected by this decline in demand, the impact on EPS is expected to be offset by ongoing tax initiatives and a number of overhead cost saving programs."
7:00AM Monsanto (MON) 33.80: The Washington Post reports that Monsanto concealed decades of PCB pollution from an Alabama town. According to the publication, while producing the now-banned industrial coolants PCBs at a local factory, Monsanto routinely discharged toxic waste into a west Anniston creek and dumped millions of pounds of PCBs into oozing open-pit landfills. So far, MON has spent $80 mln on legal settlements, and a another lawsuit by 3,600 plaintiffs (one of every nine city residents) is scheduled for trial next Monday.
6:48AM Edison Intl (EIX) 15.10: Receives notice from Mirant (MIR) that it is terminating the purchase agreement for the acquisition of 50% of EcoElectrica, a power project located in Puerto Rico. Edison does not agree that Mirant has the right to terminate the agreement and is reviewing its alter.
6:41AM U.S. Markets : S&P futures trading at 1145.80, 3.2 points below fair value, Nasdaq 100 futures trading at 1578.50, 4.5 points below fair value. The 10-year note is down a tick at 5.034%. The dollar is a tad firmer against the yen, but weaker against the euro and the Swiss franc.
6:40AM European Markets : FTSE +0.25%, DAX -0.71% -- European stocks under pressure this morning. Oil stocks underperforming amid expectations that the recent 1.5 mln bpd output cut from OPEC will be unable to deter continued cheating. Spanish shares have also been hit on concerns that the Argentine peso will be devalued soon. Domestic demand concerns also a factor, particularly after the ninth straight drop in European manufacturing.
6:40AM Asian Markets : Nikkei closed%, Hang Seng -0.41% -- Asian stocks mixed. Korea's Kospi index pushed to a sixteen-month high thanks to a 15% surge in Hynix Semiconductor. Hynix was buoyed by news that it raised its chip price for the third time in less than a month. Chipmakers also provided a decent boost for Taiwan, though China Mobile proved to be a drag on Hong Kong's Hang Seng index.
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