MARKET TALK: Wireless Can't Get It Right Even In This Mkt
04 Mar 11:29
Edited by Thomas Granahan
Of DOW JONES NEWSWIRES
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11:28 (Dow Jones) Stocks holding onto sizable gains in a nearly
all-encompassing rally. A diverse group of industries make up the top five:
Internet services, auto manufacturing, land transportation equipment, brokers,
and electric components and equipment. Only a dozen or so groups are losing
ground (one guess which is the worst acting...yes, wireless, again). Speaking
of wireless, check out these returns: down 18% in past week, 22% in past month,
49% in past three months, 51% in past six months, and 61% in the past year.
DJIA up 147 at 10515, Nasdaq Comp jumps 34 to 1836, and S&P 500 advances 13 to
1144. Investors have decided to start embracing the strong economic data of
late, the experts say. (TG)
11:20 (Dow Jones) At current price of 97.97, July fed funds are pricing in a
100% chance of a 25-BP rate hike and a 12% chance of a higher rate hike at the
June 25 meeting, according to off-floor experts. (ZHS)
11:11 (Dow Jones) Lehman analyst Dan Niles says chip maker Intel (INTC) will
narrow the range of its revenue target for the 1Q when it holds a mid-quarter
update after the close Thursday. "We believe the revenue range of $6.4 to $7
billion will be narrowed with a midpoint of $6.6 to $6.7 billion, with the
high-end gone," says Niles. Niles adds that the bigger issue in his mind is
Intel's 2Q, saying current backlog cancellation will likely drive a sequential
decline in the 2Q versus current expectations of sales up 1%. INTC up 2.1% at
$31.64. (DLF)
11:05 (Dow Jones) The stock surge is no help for the dollar, which continues
to struggle against the euro and the yen. Though euro has managed to hit
$0.8682 as a high today, it needs to prove it can hold that level before taking
another step up, analysts say. "All we did was rebound" after holding last
week's low, says HSBC's Marc Chandler. "It's just reinforcing that we're in a
range." USD/JPY at Y132.05. (JEN)
10:56 (Dow Jones) Prudential's Ed Keon is reversing his mid-January call to
tilt toward value and underweight tech, saying that, despite concerns about
tech earnings and valuation, an equal weight of tech and a leaning toward
growth is warranted. The market's reaction to Friday's positive economic
reports signals a shift toward greater optimism and a shift away from the
Enron-induced hand-wringing over earnings. "If we are right that the market is
poised for a rally and that greater optimism might lead to better growth stock
performance, then tech might outperform," Keon says. (TG)
10:47 (Dow Jones) 3M's (MMM) operating results in the latter part of 2002
will not improve as much as others anticipate, says Lehman Brothers, which
lowers its 2002 EPS estimates by 35c to $4.40 and its 2003 estimates by 30c to
$4.85. The firm says the lowered views "reflect our renewed concern about
international economies (including Europe and Japan, where business continues
to be sluggish) affecting most of 3M's businesses." The firm reiterates its
market perform rating. 3M up 0.2% at $120.51 (GS)
10:35 (Dow Jones) There are three airline IPOs in the hopper for this year:
JetBlue, ExpressJet and Pinnacle. That's an unusually high number, and for good
reason. Airline IPOs are notoriously stinkers. In fact, there have been 66
domestic airline IPOs, and only eight currently trade above their offering
prices, according to Thomson Financial. The last airline IPO was back on Dec.
5, 1997, when Midway Airlines (MDWYQ) came public. Midway filed for Chapter 11
bankruptcy protection in August. (RJH)
10:27 (Dow Jones) Whether yen repatriation is really a major factor ahead of
the Japanese fiscal year end in March is a topic of contention among analysts.
Now that the flows data are in for December, at least it's definitive that Dec.
was not amonth for net inflows, Citibank research shows. Net in Dec. was a
$3.6 billion outflow from Japan to the U.S. (JEN)
10:22 (Dow Jones) Another Wall Street analyst is out with a positive call on
eBay (EBAY). Deutsche Banc Alex. Brown's Jeetil Patel is raising his rating on
the stock to strong buy from buy. The analyst says eBay's U.S. business should
grow 35% to 55% year-over-year in coming quarters, driven by listings gains and
increased pricing. He also says the company should benefit from more large
enterprises embracing it as an alternative distribution channel. Last Thursday,
Morgan Stanley's Mary Meeker raised her rating on eBay after the stock hit its
lowest close since October. eBay shares recently at $57.02, up $2.16 or 4%.
(RS)
10:09 (Dow Jones) King Pharmaceuticals' (KG) shares represent "good value at
a reasonable price" and the "risk-reward mix is ideal for the current
investment environment," says Merrill analyst Gregg Gilbert, who upgraded the
shares to intermediate-term strong buy from buy. King shares do not reflect the
strong revenue and earnings growth over the next year or two, which will be
driven by blood pressure drug Altace and hypothyroid treatment Levoxyl. He
would not be surprised if King uses some of its $1 billion cash war chest to
acquire products or companies, but added that the money could also be used to
make share repurchase programs if the stock remains at depressed levels. Shares
up 1.9%. (BMM)
9:58 (Dow Jones) That Friday's big gain on the DJIA came on a breakout from a
two-month trading range and established a new recovery high is probably good
news for the market, at least for the next few weeks, says Hilliard Lyons
technician Dick Dickson. In fact, with Friday's advance, all the broad market
indexes managed to close above important short-term resistance levels. The only
quibble he had with the quality Friday was the lack of big volume to confirm.
Key support to watch in event of near-term pullback: 10250-10300 for DJIA,
1120-1125 for S&P 500, and 1745 for Nasdaq Comp. (TG)
9:47 (Dow Jones) Merrill Lynch analyst Steven Milunovich says Sun
Microsystems' (SUNW) fiscal 3Q earnings may be at risk. Sun will hold a
mid-quarter business update after the close Thursday, and according to
Milunovich, channel checks indicate business is soft. While he maintains his
earnings estimate of a loss of two cents a share and revenue of $3.25 billion,
there could be downside to that view. Milunovich also said he's "nervous" about
the June quarter, in which he expects Sun to reach $3.65 billion in revenue and
a two-cent profit. "If fiscal third quarter falls short, the sequential
top-line gain required to break even in fiscal fourth quarter may be a
stretch," he says. SUNW off 2.5% at $8.72. (DLF)
9:38 (Dow Jones) Looking for leadership in this market? Lehman's Jeff deGraaf
notes that, within S&P industries last month, construction, tires, appliances,
and auto parts were the strongest groups, while networking, storage, wireless,
and telecom equipment were weakest. "We like this fact for the health of the
market, because as history suggests, leadership is unlikely to be the
leadership in the previous cycle," he says. (TG)
9:31 (Dow Jones) It's even worse then they thought: capital markets activity
in February dropped off nearly 25% from January's levels, says Pru bank analyst
Mike Mayo, given lower equity issuance (down 50%), reduced M&A activity (off
38%) and debt issuance (down 33%), weaker equity trading volume (fell 10%), and
flat equity and debt values. "February's performance fired through the low set
in September, to the lowest value since September 1999," Mayo notes. That said,
there are some mitigating factors, he added, including "an improved equity
underwriting pipeline, the potential benefit in Europe from lower rates,
improved M&A likely following better economic growth, and accounting
uncertainty which may get cleared up after the release of 10Ks." (TAS)
9:22 (Dow Jones) Goldman's Laura Conigliaro sticking with belief that tech
spending is simply bouncing along the bottom, offering little evidence of
near-term demand. Until key end markets show a few consecutive months of
encouraging business, it's unlikely there will be a legitimate demand-driven
recovery. When it comes to positive data out of this space, she's hearing too
much "inventory-related", "consumer-related", or "easier compare" talk, she
says. (TG)
9:13 (Dow Jones) Senate Republican Leader Lott, commenting on President
Bush's upcoming steel tariff decision, said, "I think he will try to find a way
to do it that will help save the domestic steel industry while not violating
international trade agreements. And it's going to be a delicate balance..."
(JCC)
(END) DOW JONES NEWS 03-04-02
11:29 AM |
