MARKET TALK: It's Been Awhile, But It's Like Riding A Bike
01 Mar 16:06
Edited by Thomas Granahan
Of DOW JONES NEWSWIRES
(Call Us: 201 938-5299; All Times Eastern)
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4:04 (Dow Jones) It's been six months since the DJIA closed where it did
Friday, and in doing so the blue-chip barometer put on an impressive show. All
30 close up, Intel and Microsoft close higher by better than 5%, and more than
half of the components are higher by a buck. The Nasdaq's 4.1% jump is its
biggest since Dec. 5, 2001. For a change, stocks chose not to shrug off even
more good economic news - if the recession's not over yet, we're real close,
bulls insist. SOX jumps 11%, NWX rallies 4%, and NDX jumps 5.6%. DJIA rallies
262 to 10368, Nasdaq Comp surges 71 to 1802, and S&P 500 improves 25 to 1131
(preliminary). (TG)
3:48 (Dow Jones) Merck's (MRK) decision to replace Andersen as its auditor is
viewed by industry watchers as a considerable blow to the firm. "They've had
their top three clients lopped off in the past six months," says Jonathan
Hamilton, editor of Public Accounting Report. Indeed, as measured by the
clients' annual revenue, Andersen lost its No. 1 client in the now bankrupt
Enron (ENRNQ), research from the accounting industry newsletter shows.
Unrelated to the Enron mess, the firm lost its No. 2 client, Texaco, when that
company merged with Chevron. The newly merged energy concern, ChevronTexaco
(CVX), also chose PricewaterhouseCoopers, previously Chevron's auditor, to
audit its books. Merck was Anderson's third biggest client. (JAW)
3:33 (Dow Jones) "If you knock on the door enough times, you will finally get
through it," says Jim Smitherman, president of Harvest Trading Group LLC. of
stock index futures market's ability to finally hold onto gains in afternoon
trade. He notes that contracts have had a higher low than the previous day in
each consecutive session since Feb. 22 - a sign there has beenunderlying
potential for upside strength in the market. (CMN)
3:26 (Dow Jones) PerkinElmer (PKI) the day's biggest loser on the Big Board,
reporting weakness in all of its business units so far this year. In
downgrading shares, Merrill says it's not clear when or to what degree growth
will return to these units, and says cost cutting efforts won't be able to
offset revenue declines. Shares down $7, or 30%, at $15.98. (TG)
3:13 (Dow Jones) Yielding 3.18% amid Friday's Treasury selloff, the 2-year is
bordering a new, higher-yield range that could extend all the way up to 3.38%,
says fixed-income strategist in NY. Where next will depend in large measure on
equities trajectory and whether there are any more accounting issues lurking
behind the signs that could regenerate a flight-to-quality bid into Tsys. (JNP)
3:05 (Dow Jones) Earnings season may have slowed, but it hasn't stopped
altogether. Don't forget that companies have 90 days to report their numbers
after the end of their fiscal period, versus 45 days at other times of the
year, and a goodly number of retailers have fiscal years that end January. Next
week's numbers will come from AnnTaylor (ANN), Berkshire Hathaway (BRKA, BRKB),
BJ's Wholesale (BJ), Costco (COST), OfficeMax (OMX), Saks (SKS) and Staples
(SPLS). Also, retailers report their February figures Thursday. (CRW)
2:53 (Dow Jones) Williams Communications (WCG) said Monday it may file for
bankruptcy protection, but it's the possibility of delisting, rather than new
developments on the bankruptcy front, that explains the halt in trading of its
stock all day. Williams Communications shares have an average closing price of
less than $1 for 30 consecutive days, triggering a review by the NYSE. (CBN)
2:37 (Dow Jones) Recent economic data have J.P. Morgan so pumped about an
economic recovery that the firm raised its earnings estimates and price targets
for three manufacturing companies: Honeywell (HON), United Technologies (UTX)
and SPX (SPW). Also well positioned to benefit from an economic upturn is GE,
says analyst Don MacDougall, who "revised" his 2002 and 2003 EPS estimates for
GE to $1.67 and $1.83 a share, respectively, from $1.65 and $1.82. GE is up 70
cents to $39.20. (CCW)
2:25 (Dow Jones) Arthur Andersen is assuring its clients that neither the
quality of its audits nor the firm's viability are at risk because of the
collapse of Enron (ENRNQ). With many public companies in the process of making
annual decisions on whether to renew the employment of their auditors (Merck
(MRK) just pulled the plug on the firm after about 30 years), Arthur Andersen
has found itself, formally and informally, meeting with clients to offer
reassurances. "They (clients) generally want to hear our side of it," Andersen
spokesman Charlie Leonard says. "Clients are most concerned with wanting
confirmation that the team they know and trust won't be impacted by these
matters." (RG)
2:14 (Dow Jones) It will be light on the equity issuance front next week,
with just one IPO almost certain to be a yawner: a $108 million IPO from Greek
shipping company Tsakos Energy. There are eight follow-ons on tap for $1.7
billion. If the recent past is any guide, though, a few overnight deals will
likely round out the calendar. (RJH)
2:02 (Dow Jones) In reaction to ISM Feb report showing equivalent annualized
4.4% GDP growth, Banc One senior financial economist in Chicago Anthony
Karydakis says economic activity could accelerate to around 4% over the next
two quarters, but ISM alone is not definitive - we have to continue to track
other measures of economic activity, he says, nor should we be "overly
impressed by one blockbuster quarter" as economy lifts out of recession. (JNP)
1:47 (Dow Jones) Arthur Andersen, under fire both for handling Enron's books
and for shredding thousands of Enron-related documents, has just lost another
longtime client. Merck (MRK), an Andersen client since 1972, had decided to
drop the embattled auditfirm in favor of PricewaterhouseCoopers. Merck is only
one of growing list of high-profile departures following Enron's implosion.
SunTrust Banks (STI), Andersen's largest banking client, decided to drop
Andersen, its auditor of 60 years, also choosing PricewaterhouseCoopers. Delta
Air Lines (DAL), an Andersen client since 1949, also is reported to be weighing
whether to switch to a new auditor. (JAW)
1:33 (Dow Jones) Some short sellers like to play secondary offerings,
shorting the stock leading up to a deal knowing there's a good chance investors
will get skittish when a company issues shares. Anyone who shorted Aftermarket
Technology (ATAC) is getting squeezed. The company was going to sell 6 million
shares in a secondary, but pulled the deal at the last minute, since an
investor that wanted to sell 3.6 million shares pulled out, citing unstable
market conditions. Now Aftermarket might not sell any shares. The result? The
stock's up 10%. (RJH)
1:19 (Dow Jones) Robertson Stephens analyst Harry Curtis upgraded Mandalay
Resort Group (MBG) to buy from market perform and set a 12-month price target
of $38 a share on the stock. The analyst downgraded the stock in November based
on price. Curtis also increased his fiscal 2003 earnings estimate to $1.70,
including goodwill, from $1.30. He added that by the March-April timeframe,
revenue per available room for the casino-hotel company should be running close
to last year. (DDO)
(END) DOW JONES NEWS 03-01-02
04:06 PM |
