MARKET TALK: Hey, Enjoy Your Weekend
25 Jan 16:02
Edited by Thomas Granahan
Of DOW JONES NEWSWIRES
(Call Us: 201 938-5299; All Times Eastern)
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4:04 (Dow Jones) Booz Allen Hamilton study warns that a "tidal wave" of
off-balance sheet inventory liabilities in the high-tech industry could surface
in 2002. "This wave of liabilities could beach many companies in the near
future, draining them of cash swiftly and unexpectedly," the report says. (PHM)
4:02 (Dow Jones) A week that brought so much news ended fairly tamely. That
might not be the case next week, though, when the employment report caps off a
huge week of data. The Fed's not moving, but the Street's got no problem with
that, as long as the economy is, in fact, turning. Some observers were in the
camp that said this week's earnings would give us more direction, but it's
tough to say that happened - some reports were good, plenty were bad. From here
it looks like more the same - one big trading range. DJIA adds 42 to 9836,
Nasdaq off 4 at 1939, and S&P 500 flat at 1132 (preliminary). (TG)
3:45 (Dow Jones) "Recent 'open mouth' operations from Federal Reserve
officials have gone most the way toward informing the public that the funds
rate likely will be left unchanged next week," say SSB economists. (JCC)
3:29 (Dow Jones) Despite anticipated weakness in the fiscal 4Q because of
tough comparisons with last year and the Olympics this year, AMC Entertainment
(AEN) should realize 8% revenue growth in fiscal 2002, ending in March, with
adjusted cash flow up 11%, says UBS Warburg analyst Christopher Dixon. He notes
the company has so far cut capital expenditures by $33.3 million to $47.2
million in fiscal 2002, and expects net capital expenditures to be around $75
million in fiscal 2002 and 2003. Dixon kept his buy rating and $18 price target
on the stock. (DDO)
3:12 (Dow Jones) Goldman Sachs economists reiterate view Fed will be very
slow to tighten monetary policy, saying "the first rate hike not expected until
2003." (JCC)
2:57 (Dow Jones) J.P. Morgan analyst Vinton Vickers upgraded Viacom (VIA,
VIAB) to buy from long-term buy and set a six- to 12-month price target of $52
on the stock. He lauded the company's improved ratings at CBS, UPN and the
cable networks; gains at owned-and-operated stations; its efforts to boost
subscriber numbers, affiliate fees, and advertising growth at its cable
networks; and stringent expense management. Vickers said Viacom should continue
to outperform its peers in the entertainment and media sectors in the current
weak advertising market, and will be one of the first beneficiaries of an
advertising recovery. (DDO)
2:41 (Dow Jones) Fed won't tighten interest rates until Sept., says Lehman
Brothers chief global fixed-income strategist Jack Malvey, who says the best of
the Treasury bond market rally of 2000 and 2001 "is behind us," adding,
however, that until the fall, "we are not entering a major bear market." (JNP)
2:32 (Dow Jones) The Information Technology Association of America says it is
"very disappointed" the Senate rejected a proposal allowing businesses to take
a three-year, 30% bonus depreciation for the purchase of certain high-tech
equipment. But the trade group is hopeful other measures aimed at providing
stimulus will be passed. ITAA President Harris Miller calls current
depreciation schedules "woefully outdated." (JPB)
2:18 (Dow Jones) VeriSign (VRSN) shares are off 7% after reporting in-line 4Q
results but lowering its 2002 outlook. Thomas Weisel analyst Tim Klasell cut
his rating to attractive from buy and reduced his 2002 estimates. He cited
weakness in VeriSign's mass markets unit, which includes the domain-name retail
business. He also cut his price target to $40 from $65. On the other hand, Bear
Stearns analyst Chris Kwak was "heartened" by VeriSign's cash flow, which rose
from 3Q. He also boosted his 2002 earnings view, but mostly because he'll now
factor in a lower tax rate. (PDL)
2:10 (Dow Jones) Entrepreneurs continue to gravitate toward sectors poised to
benefit from technological and regulatory changes, a survey from vFinance.com
(VFIN) shows. The utilities industry, powered by a surge in interest in
alternative energy, showed a 140% jump in entrepreneurial activity in December
compared to November. That was followed by the metals and mining industry, with
a 100% increase, and materials and construction, which rose 75%. For the fourth
straight month, the computer software and services industry remained the most
popular market segment for entrepreneurs seeking funding. But the sector showed
a 25% decrease in activity from November, and a 32% drop from its October peak.
(JAW)
1:58 (Dow Jones) For investors hoping that Nortel's (NT) new HDX optical
switch, which is in customer trials, would start to bolster the firm's network
business later this year, think again. HSBC analyst Paul Howbold believes that
Lucent (LU) is set to officially launch next week its new Lambda Unite optical
switch, making for an increasingly competitive market. Ciena's (CIEN)
Coredirector is the market leader and Alcatel (ALA) also sells a competing
product known as the 1680 OGX. In this environment, Howbold advises "investors
to temper expectations of a major HDX sales ramp" in the second half of the
year. (BED)
1:46 (Dow Jones) Robert Trumka, secretary-treasurer of AFL-CIO, urges
chairman of Motorola (MOT) nominating committee that Ronnie Chan not be
renominated to another term as a Motorola director unless Chan, who's also an
Enron (ENRNQ) director, "can show he personally took meaningful steps to
protect Enron investors." (JCC)
1:37 (Dow Jones) Lazard Freres analyst James Winchester raised his price
target on Royal Caribbean Cruises (RCL) to $19 from $16, while maintaining his
hold rating. The increase was based on the probability of a merger with P&O
Princess Cruises (POC), he said. The analyst alsonarrowed his 4Q loss
projection to 16 cents from 22 cents, and raised his 2002 earnings estimate to
84 cents a share from 65 cents. RCL up 2% at $17.81. (DDO)
1:24 (Dow Jones) Bankers say they still plan to bring the Alliance Medical
IPO next week, but what the offering looks like will likely change. Talk is
that Alliance is readying a new filing with the SEC and that the price terms of
the deals will be reduced. As it stands, Alliance is trying to sell 4 million
shares at between $14 and $16 a share through UBS. (RJH)
1:09 (Dow Jones) To reach its goal of $6.6 billion in cash flow over six
years, Eastman Kodak (EK) would have to see 12% annual earnings growth beyond
2003 - a target that Salomon Smith Barney analyst Jonathan Rosenzweig found
"hard to swallow." He also doubted that Kodak could realize low-to-mid-single
digit growth at its conventional film and camera businesses, considering that
those operations are "most subject to cannibalization" by digital products. He
kept his neutral rating and 12-month price target of $30 on the stock. Shares
up 1.7% at $28.73. (DDO)
(END) DOW JONES NEWS 01-25-02
04:02 PM |
