MARKET TALK: Drop In Volatility May Hurt Later In Week
09 Jan 13:17
Edited by Thomas Granahan
Of DOW JONES NEWSWIRES
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1:17 (Dow Jones) As the Nasdaq Composite Index pushes toward 2100, implied
volatility in the tech sector fell as investor optimism grew. The Amex's Nasdaq
Volatility Index, or QQV, declined 1.07 to 39.03, and traders and investors are
keeping a close watch. Since late-August, this tech-sector fear gauge has
dipped intraday below 39 during just four sessions - each time, the Nasdaq
pulled back within one or two days (although not always by much). (KT)
1:07 (Dow Jones) The confirmed crash of a marine refueling plane in Pakistan
hasn't altered the direction of stocks much. The Pentagon is saying there's no
evidence the plane was fired upon. DJIA up 85 at 10235, Nasdaq Comp adds 37 to
2092, and S&P 500 adds 10 to 1170. (TG)
1:02 (Dow Jones) The National Association of Homebuilders has raised $6
million for providing financial housing assistance to families impacted by the
Sept. 11 disaster. The money will go to families who lost a family member or
lost a job in a business south of Canal Street in Manhattan. The trade group
has set up a hotline for interested applicants at 212-385-4949. (JKM)
12:53 (Dow Jones) Robertson Stephens says the assumptions supporting its 2003
adjusted EPS view of $1.43 a share for Cendant (CD) are conservative,
especially since they don't include any help from acquisitions. Valuation of
Cendant remains attractive, and firm reiterates strong buy rating, $31 target.
Shares up 2.6% at $19.16. (TG)
12:42 (Dow Jones) JP Morgan analyst Mike Weinstein upped his price target on
medical device giant Guidant (GDT) to $65 a share from $55 a share, predicting
the company's 4Q financial results will top his expectations of 46 cents a
share, aided by share gains in stents and re-acceleration in the market for
implantable electronic defibrillators. Guidant plans to post 4Q results on Jan.
29. (JJO)
12:32 (Dow Jones) Goldman Sachs' Pablo Morra, commenting on Argentina, said
in part: "We believe that, in the most likely scenario, confidence will suffer
further, activity will continue to shrink, and the government will continue to
run a sizable fiscal deficit. Without access to voluntary or official
financing, part of this deficit will likely be covered with Lecops (Treasury
bills that play the role of money) and the rest via outright money printing,
'feeding' inflation and currency depreciation." (JCC)
12:19 (Dow Jones) Initial headline that sent USD/JPY lower was Takenaka's
remark that it's not correct that Japan is targeting the Y135-Y140 range. But
later comments on pace and fundamentals "were certainly more bullish than not,"
BNP Paribas' Bob Lynch said. Pair now stabilizing at morning's Y132.50 level.
Meanwhile, EUR/USD bouncing to $0.8885 after quick drop through support to
$0.8866 with no follow-through. (JEN)
12:07 (Dow Jones) Despite Merrill Lynch (MER) announcing the elimination
9,000 positions, analysts say Wall Street likely won't cut jobs on a massive
scale in the coming months - barring another economic downturn. Securities
firms will likely reevaluate their staffing levels this spring and could make
some cuts if the pipeline looks less than rosy, said David Trone, a Prudential
Securities analyst. So far, investment banking pipelines appear to growing,
foreshadowing a possible mid-year recovery. (CUB)
11:50 (Dow Jones) Agilent Technologies (A) didn't pay bonuses to 941
executives during 2001 ended Oct. 31 because the company failed to achieve its
performance objectives. Agilent also said a 10% pay reduction implemented for
all executives in 2001 would continue in the current 1Q for the executives and
now would include about 2,000 senior managers. Agilent said Chief Executive
Edward Barnholt was eligible for up to $2.6 million in bonus payments for 2001
under the company's Pay for Results compensation program. The company didn't
provide the specific performance targets of the program but said the objectives
were based on its net profit and revenue growth. (RG)
11:41 (Dow Jones) Plenty of analysts caution that Japanese repatriation of
foreign assets in the 1Q (ahead of the fiscal-year close) could lead to a yen
bounceback, but Deutsche Bank's Ken Landon says it's historically the opposite
that actually occurs. On average over the past 12 years, the yen has been at
its weakest vs. the dollar in the January to March block, he notes, even as
Japanese investors sell overseas assets. That's likely because those investors
go right back and buy foreign assets in 2Q, and keep their 1Q proceeds in
non-yen cash in the meantime, he says. (JEN)
11:35 (Dow Jones) Prudential analyst John Barton ups his price target on
Broadcom (BRCM) to $68 from $48 and says the company's December quarter will
meet or exceed expectations. "Our channel checks indicate that the company's
December quarter was in line to slightly better than expectations and booking
trends support continued sequential growth in the March quarter in the high
single digits," he says. The analyst is also encouraged that Broadcom filed to
reprice its employee stock options because it suggests "management's increased
optimism regarding current order trends." In fact, Broadcom just came out and
said it will return to profitability this year. Shares up 6% at $52.26. (CD)
11:24 (Dow Jones) Weak wireless net customer additions of 715,000 for Verizon
Communications' (VZ) in the usually strong 4Q adds to a long list of negatives
for the wireless sector, says Lehman analyst Tim Luke. "These results compare
with 725,000 (net customer additions) in the 3Q, indicating a sequential
decline in the seasonally strong 4Q," he said. Luke notes that Wall Street had
expected the company to add 900,000 to 1 million new customers in the quarter.
Luke expects near-term pressure on Qualcomm (QCOM) and handset maker Nokia's
(NOK) outlook for momentum with Verizon in the 1Q. (JDB)
11:15 (Dow Jones) Is electronic trading the way of the future or was it just
a very good year? The all-electronic International Securities Exchange said it
traded on Tuesday its 75-millionth options contract. In a sign of how quickly
the ISE's growth is accelerating, the New York exchange traded its 25-millionth
contract a year after it was launched (in May 2000), its 50-millionth contract
just four months later, and reached its 75-millionth contract after just three
more months. (KT)
11:05 (Dow Jones) New quantitative research from Merrill shows that 2001 was
actually the broadest year for the equity market of the last 15 years. Despite
the S&P 500 being down 13%, 65.4% of the stocks in the index outperformed the
index. So, investors had about a 2-in-3 chance of picking outperforming stocks
in 2001. Of course, they only had a 4-in-10 chance of picking a stock that
actually went up, which brings up one of our favorite Wall Street sayings: You
can't get rich by losing less than your neighbor. (TG)
(END) DOW JONES NEWS 01-09-02
01:17 PM |
