MARKET TALK: Honeywell Leads Dow Lower
08 Feb 13:41
Edited by Thomas Granahan
Of DOW JONES NEWSWIRES
(Call Us: 201 938-5299; All Times Eastern)
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1:40 (Dow Jones) Stocks are weakening a bit, and Honeywell (HON) is at the
bottom of the pack. One possible explanation for at least some of the weakness
is an erroneous report that UBS Warburg lowered numbers on the Dow component,
though even if that were true this seems like a big hit. Anyway, the brokerage
firm actually cut views on HON Industries (HNI). Honeywell shares off 9.6%.
DJIA down 35 at 9589, Nasdaq Comp eases 9 to 1772, and S&P 500 flat at 1079.
(TG)
1:30 (Dow Jones) One negative effect of the Fed rate cuts: $90 billion less
earned in money market fund interest. According to Peter Crane, managing editor
of the Money Fund Report newsletter, investors were earning $120 billion in
money market fund interest when they were returning 6% at the beginning of last
year. At the current rate of 1.5%, only $20 billion is generated on this $2
trillion asset class. "The Fed's cuts may have actually been counter
productive," he says. (YXH)
1:15 (Dow Jones) Investors are buying back shares of Goodyear Tire (GT) after
the tire maker revealed it had positive cash flow of $806 million in the fourth
quarter. David Bradley, an analyst at JP Morgan, said the positive cash flow
came as a "great relief" and showed that the company isn't "that troubled after
all." Shares up 5.65 to $22.60. (EGS)
12:59 (Dow Jones) Stocks are muddling through an uninspiring session.
Goodyear has the tire sector at the top of the heap, followed by insurance
names, wireless, gold, and broadcasting. Gold, by the way, is up 9% in the past
week, 26% in the past month, and 54% over the past year. If you're a betting
person, you have to like the chances of another late decline, given the recent
past and what major averages have already done Friday. DJIA up 8 at 9634,
Nasdaq Comp eases 4 to 1778, and S&P 500 adds 2 to 1082. (TG)
12:43 (Dow Jones) Some brokerage analysts did a little cheerleading Friday,
even as others were revising earnings estimates downward. Merrill analyst Judah
Kraushaar reiterated his strong buy rating on Morgan Stanley (MWD), saying that
even if he cuts his estimates later in the month, "we see excellent value in
the shares, which we confidently believe would hold up even with somewhat lower
EPS forecasts." Also on Friday, Credit Suisse First Boston upped Merrill (MER)
to strong buy from buy. (CWM)
12:25 (Dow Jones) There's been an unusually strong performance for Actuant
(ATU) after a follow-on offering. The company sold 3 million shares at $30.50
through Wachovia. The shares are now trading up at $35.01. It's commonplace for
companies to trade flat or up just slightly after such an offering. (RJH)
12:15 (Dow Jones) Tax season is upon us. And now that W-2s are arriving in
mailboxes around the country, taxpayers are traveling en masse to the IRS's Web
site for forms, instructions and information about how to file online. The
recently revamped IRS.gov played host to 1.9 million visitors in the week ended
Feb. 3, an 85% gain, according to Web measurement firm Nielsen//NetRatings.
(RTR)
12:00 (Dow Jones) Calpine (CPN) is leading high-yield gainer in otherwise
quiet trade, with the 8 1/2% notes of '11 up another 2 1/2 pts at 77-80. The
energy company's bonds have recovered from 74 earlier in the week, and Calpine
announced today that it bought back $119M of the $819M outstanding of the
zero-coupon converts of '21 that are puttable in April. Shares up 7% at 8.76.
(RTB)
11:54 (Dow Jones) The Economic Cycle Research Institute's weekly leading
index increased in the week ended Feb. 1 to 120.0 from 119.8, and up from its
cyclical low of 113.9 for the week ended Oct. 19. Also relevant was that the
4-week moving average remained above the 52-week moving average for the fifth
straight week, at 1.8%. ECRU economist Anirvan Banerjee says the index
continues to point to "pronounced, pervasive, and persistent" evidence that the
economy is set to rebound out of recession in first-quarter 2002. (SV)
11:42 (Dow Jones) Still doubt cash is king on Wall Street? Take a look at
what Tyco (TYC) shares are doing after SEC filing validated management's
guidance on cash flow. The filing "makes (cash flow guidance) more real," said
analyst Harriet Baldwin of Deutsche Banc. Tyco is up 6%. (CCW)
11:33 (Dow Jones) The odds of the pending merger between Echostar (DISH) and
Hughes Electronics (GMH) aren't looking so good, says Salomon Smith Barney
analyst Armand Musey. Based on a preliminary analysis of comments filed with
the FCC, Salomon gives it about a 20% chance of winning FCC approval, a
considerable drop from the 40% odds the firm estimated in a Jan. 17 report. "We
believe filings by Pegasus and the NRTC that analyze competition between DISH
and DirecTV demonstrate a strong potential for negative pricing impacts if the
two are allowed to merge, while weakening the arguments behind DISH's national
pricing 'solution' for high market concentration," says Musey. Accordingly,
Salomon lowered its 12-month price target on Echostar to $30 and on GMH to $18.
(JAW)
11:27 (Dow Jones) CBO, which published its first macroeconomic forecast in
1976, says it "has compiled a forecasting track record comparable in quality
with those of a sizable sample of private-sector forecasters as well as five
Administrations." (JCC)
11:24 (Dow Jones) While many traders are still cautious and skeptical, call
trading is finally picking up as stocks rally Friday morning from what many say
are oversold levels. At the CBOE, the ratio of equity puts traded to calls fell
to 0.61 - compared with readings of 0.91, 0.92, 0.88 and 0.78 the four prior
days this week. Index put/call ratio was at 1.38. (KT)
11:11 (Dow Jones) VeriSign (VRSN) shares have gotten cheaper, yet the
company's prospects for strong cash flow growth in 2002 are good, says Bear
Stearns analyst Chris Kwak. He raised his VeriSign rating to "attractive" from
"neutral" Friday. The stock has fallen sharply on concerns that VeriSign didn't
properly disclose investments it made in overseas companies that resell its
security software and other services. Kwak says don't worry. "We are satisfied
by these affiliate arrangements," he says.. He has a $37 price target. The
stock's up $1.84, or 8%, to $25.94 Friday. (PDL)
(END) DOW JONES NEWS 02-08-02
01:41 PM |
