Too bad media reports after the fact. They could sell more newspapers if they could report before the facts. <gg>
cbs.marketwatch.com
Oil-service index at seven-month high
By Myra P. Saefong, CBS.MarketWatch.com
Last Update: 1:45 PM ET Feb. 25, 2002
NEW YORK (CBS.MW) - A key index of oil service shares rose to its highest level in seven months Monday after Merrill Lynch upgraded its outlook on the stocks, calling them an "attractive vehicle" ahead of the expected economic recovery in the U.S.
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"The earnings trough for a large number of oil service companies appears to be much higher than in prior cycles," due to solid oil prices, the good financial position of most oil companies and good management of the U.S. downside from most oil-service managements, Merrill Lynch analyst Kevin Simpson said in a research note issued Monday.
While there is still a downside risk for oil prices, "a combination of the impact of OPEC production cuts and an increasing probability of a U.S. attack on Iraq could well offset the impact (of) an expected increase in Russian exports starting in 2Q," he said.
The oil service equipment and service stocks will likely be the best oil service performers this year, he added.
As a result, Simpson upgraded his intermediate-term ratings on Weatherford International (WFT: news, chart, profile) to a "strong buy" from buy and Smith International (SII: news, chart, profile) to "buy" from "neutral." See related story on oil-service stocks.
In recent action, the Philadelphia Oil Service Index (OSX: news, chart, profile) rose to a high at 94.61, its highest level since July of 2001. It last traded at 93.85, up 3.3 percent.
Within the index, shares of index components Weatherford rose by $2.32 to $47.46 and shares of Smith International gained $2.18 to stand at $63.93.
The CBOE Oil Index ($OIX: news, chart, profile), a key gauge of integrated oil stocks, stood at 305.06, up 0.6 percent from the previous session.
Among the index components, ExxonMobil (XOM: news, chart, profile) rose 18 cents to stand at $40.90 while ChevronTexaco (CVX: news, chart, profile) added 37 cents to stand at $84.07. U.S.-traded shares of BP traded at $49.07, up 68 cents.
Over on the futures market, April crude traded at $20.64, down 43 cents. See Futures Movers.
Elsewhere in the energy complex, shares of Enron (ENRNQ: news, chart, profile) traded up 14.8 percent at 20.9 cents.
Among other energy-related stocks, Dynegy (DYN: news, chart, profile) shed 15 cents to $24.65 and shares of Mirant (MIR: news, chart, profile) declined by 16 cents to stand at $7.74.
Shares of Williams Cos. (WMB: news, chart, profile) fell $1.50, or 9 percent, to $14.80 on growing concerns over the possibility that the energy services company's former subsidiary, Williams Communications, will file for Chapter 11 bankruptcy. See Energy Watch.
Myra P. Saefong is a reporter for CBS.MarketWatch.com in San Francisco. |
