MARKET TALK: Markets Can Handle Higher Rates: Gross
11 Mar 12:26
Edited by Thomas Granahan
Of DOW JONES NEWSWIRES
(Call Us: 201 938-5299; All Times Eastern)
MARKET TALK can be found using code N/DJMT
12:25 (Dow Jones) Pimco chief Bill Gross says the Fed did the right thing
lowering interest rates post-Sept. 11, and says the economy and markets can
take a 2.5% to 3% funds rate sometime this year, in an interview on CNBC. (MSD)
12:15 (Dow Jones) Insurance analysts can't make up their mind on Aflac (AFL).
Joanne Smith, a UBS Warburg analyst, upgraded the insurer to a buy from a hold,
citing a new attitude and sales outlook in its largest business - Japan. Smith,
after meeting with Aflac's management team in Japan, says "new products and new
management could be just the right combination to get Aflac back on its
historical growth track." However, Vanessa Wilson, a Deutsche Banc Alex. Brown
analyst, has a different view on the firm's valuation. She cut her rating to a
buy from a strong buy, citing a recent run-up in the stock based on increasing
confidence in its Japan unit. Investors seem to be listening more to Wilson:
Shares of Aflac recently traded down 30 cents, or 1.1%, at $28.16. (CUB)
11:59 (Dow Jones) Between Friday's close and Monday's open, six companies
filed to raise up to $905 million in IPOs. How rare is that kind of volume?
There had not been that many deals filed in such a small period of time since
eight companies filed for IPOs on Oct. 5 and Oct. 6, 2000, according to Richard
Peterson, chief market strategist at Thomson Financial. (RJH)
11:45 (Dow Jones) "I don't rule out testing major support at Y125" said
Ashraf Laidi, chief currency analyst at MG Financial in New York. EUR is
$0.8765; USD/JPY is Y127.96; EUR/JPY is Y112.22. (JRH)
11:31 (Dow Jones) When it comes to the economic recovery, bag the 'V' and
think 'check mark', says Pru's Ed Keon. The almost surreal growth in
productivity during the recession,strong consumer spending, the drop in
unemployment and the pick up in manufacturing lead him to believe the 2001
economic drop, like the Asian crisis slowdown in 1998, may in time look more
like a pause in a long-term expansion rather than a major recession. Ups 2002
S&P 500 expected return forecast to 10%-15% from 5%-10%. (TG)
11:14 (Dow Jones) Blue chips have turned up after spending the morning in the
red, and techs are trying to do the same. Financials acting OK, with JP Morgan
and AmEx leading the Dow higher. Gold, Internet services, entertainment, and
oil companies also looking good, while office equipment, semis, and tobacco
struggle. DJIA edges up 5 to 10577, Nasdaq Comp eases 10 to 1918, and S&P 500
flat at 1164. (TG)
11:05 (Dow Jones) We all know it has been six months since the horror of
9/11, but there's another, far less important, anniversary that should be
noted: On March 10, 2000, the Nasdaq Comp closed at its highest level ever,
5048.62. According to Webmergers.com, there have been 788 dot-com failures
since January of 2000. (TG)
10:49 (Dow Jones) Lehman Brothers says it sees Wednesday's release of overall
retail sales figures for February reflecting a 1.8% rise, following 0.2%
decline in January. Outside volatile auto sector, sales probably advanced a
very solid 0.8%, compared with last month's 1.2% jump. Removing auto sales,
spending has advanced steadily since last September, rising 4.2%. (MCG)
10:36 (Dow Jones) Sun Micro's (SUNW) lawsuit against Microsoft (MSFT) is more
about publicity and less about technology. At least that's how ABN-Amro sees
it. "In our view, the suit and the requests amount to nothing more than
corporate comedy," analyst George Godfrey says. "Most competitors of Microsoft
realize that the legal issues against them are winding down. Sun's suit is just
another attempt to delay what's already close to/has been decided." (TG)
10:25 (Dow Jones) Two out of three Latin Americans are dissatisfied with the
results ofdemocracy and only one out of two believe democracy is the best form
of government, according to a recent poll cited in a new Inter-American
Development Bank study. (JCC)
10:19 (Dow Jones) WR Hambrecht sees a significant backlog of business that
should drive Siebel's (SEBL) results this year, and likes the improving
fundamentals overall. Says current estimates for this year and next are highly
achievable, and checks indicate that progress is "adequate" for the March
quarter. Reiterates buy rating, price target is $40. SEBL up 0.7% at $36.29.
(TG)
10:11 (Dow Jones) Goldman Sachs economists call U.S balance of payments
"still unsustainable" and say "long term outlook for the dollar remains very
precarious." (JCC)
10:04 (Dow Jones) Wholesale inventories fell by 0.2% in January compared to a
0.5% decline in December and a 0.3% consensus expectation. A large portion of
wholesale inventories - particularly autos - are imports, so, this signals
further downward pressure on U.S. imports, but much less than in 4Q. Inventory
liquidation remains a drag on GDP growth, but also less so than in 4Q. (JM)
9:59 (Dow Jones) The volatile stock market continues to draw more investors
who want to help manage their stock portfolios with options, and the
educational effort is coming to Philly: On March 20 and 21, the Options
Industry Council and the Philadelphia Stock Exchange are holding options
seminars - one introductory, one intermediate. Both are free, but investors
must register at the OIC website www.888options.com. (KT)
9:48 (Dow Jones) Salomon Smith Barney analyst Jonathan Rosenzweig downgraded
Macromedia (MACR) to outperform from buy, after upgrading the stock to buy from
neutral on Feb. 21. The maker of software used to create Web content is on the
cusp of a key product upgrade cycle, but the recent stock price appreciation
has tempered the risk/reward profile of Macromedia, he said. MACR off 8% at
$18.82. (DDO)
9:41 (Dow Jones) With the yen's bounce last week going far further than
expected, traders see the pair starting to move back toward Y130, with Y135 the
key medium-term target for resumption of the long-term uptrend. EUR is $0.8758;
USD/JPY is Y128.09; EUR/JPY is Y112.20. (JRH)
9:33 (Dow Jones) A few thoughts from Merrill's Global Tech Strategist, Steve
Milunovich: 1) CIOs are shifting out their expectations for a spending recovery
from the second half to 2003; 2) more Hewlett-Packard (HWP) and Compaq (CPQ)
users are against than for the merger; 3) IBM is gaining share; 4) Sun Micro's
(SUNW) momentum has waned, though users are not running for the exit; 5) Dell
Computer (DELL) has the best sales and service force. (TG).
9:21 (Dow Jones) Morgan Stanley says it's learned its lesson - Take profits
in commodity stocks when commodity prices are still rising and estimate
revisions are positive. That's why the firm cuts Louisiana-Pacific (LPX) to
neutral from outperform despite its feeling that LPX shares will trade higher
if lumber prices continue to rise. "Waiting to sell until commodity prices have
peaked and have begun to roll over is typically too late. Liquidity will dry up
and share prices can fall sharply. Our goal is to be exiting shares like LPX
'early' while there is still 'money on the table."' (GS)
9:13 (Dow Jones) Salomon Smith Barney's Steven Wieting says, "The Fed should
not be feared" with economy below trend and Fed working very hard to restore
it. (JCC)
9:09 (Dow Jones) Eaton (ETN) should see improving fundamentals in all of its
businesses as it exits 2002, except in its smallest, Trucking, Prudential says.
As markets improve, earnings should accelerate because of above market revenue
growth potential, improved cost structure, and lower debt levels. Firm ups
Eaton to buy, 12-month target is $105. ETN closed Friday at $83.47. (TG)
(END) DOW JONES NEWS 03-11-02
12:26 PM |
