DJ MARKET TALK: There Are Lots Of Options With A 1,074% Jump
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
10:35 (Dow Jones) InVision Technologies' (INVN)
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CFO, Ross Mulholland, said in a TV interview Wednesday that the company will use the $86M raised in a recent share offering to build manufacturing capacity and develop new products. It seems InVision simply saw a good opportunity and knew exactly how to capitalize on it. On Sept. 10, InVision's stock closed at $3.11, with 20,070 shares changing hands that day. On March 26, a day on which 1.28 million shares traded, InVision priced 3M shares at $36.50 each, a 1,074% premium to the Sept. 10 close. The company makes bomb-detection equipment, a hot industry, to say the least, since the Sept. 11 attacks. Shares down 3.3% to $39.30. (NBB)
10:23 (Dow Jones) The U.S. Air Force Electronic Systems Center told Dynamics Research (DRCO) that as of Monday it would no longer be the prime contractor of the follow-on five-year Combat Air Forces Command program office support contract. The contract is proposed to be awarded to another contractor, of which Dynamics Research is a team member. The company provides 52 of the 180 contractor personnel supporting the contract and recognized annual contract revenue of $23 million in 2001. The company said that as a team member subcontractor it will negotiate to retain its staff members in their current Combat Air Forces Command support contract assignments. Shares off 4.7% at $23.55. (CC)
10:16 (Dow Jones) Treasurys in narrow range, mainly shrugging off non-manufacturing ISM report for March, at 57.3, closely in line with expectations. 2-year yielding 3.61%, price up 1/32. 10-year yield at 5.34%, price up 2/32. (JNP)
10:07 (Dow Jones) I2 Tech's (ITWO) 1Q outlook came in worse than Goldman had expected. While the selling environment overall remains very challenging, the brokerage firm says recent results from Manugistics (MANU) shows there are also issues specific to i2. "If the demand environment does not improve in the next quarter or two we believe the company has to cut the cost structure further," Goldman says. Keeps outperform rating because the shares are trading at just two times CY03 revenue estimate, which is trough valuation level for mature software companies. ITWO off 2.7% at $4.68. (TG)
9:53 (Dow Jones) Many conflicting themes in Treasurys, but the overriding concern, say some traders, continues to be the escalating violence in the Middle East, which is keeping the curve steep. Concerns about oil and inflation are intensifying that tone, but working against that are expectations for buybacks later this month. Deal-related flows, particularly expectations for the AOL Time Warner (AOL) deal, still officially at $4 billion, are also said to be maintaining a short-term flattening bias for Treasurys. (SV)
9:45 (Dow Jones) Lehman technician Jeff deGraaf notes that breadth on the NYSE acted better Tuesday than the price action, which points out one of the market's current dilemmas: the average stock is doing well, while the major averages are doing poorly. Complicating matters is the fact small traders as of last week held their largest net long positions on the NDX and SPX in the history of the data. "This is not a bullish configuration," he says. (TG)
9:36 (Dow Jones) Morgan Stanley downgrades Micron Technology (MU) to underweight from equal-weight, but doesn't sound crazy about it. "Although we believe that Micron is well-positioned in the DRAM market, a fierce global competitor and is likely to be a prime beneficiary of market consolidation, we believe that the stock is likely to be under pressure in the near term." MU closed Tuesday at $32.40. (GS)
9:12 (Dow Jones) Much Japan pension fund money being put to work at home, some into equities, with Nikkei index looking poised to test March high near 12000, says Marc Chandler, chief currency strategist with HSBC in NY. Japanese institutional investor interest in foreign assets has not been as strong as expected in first two days of Japan's new fiscal year, say analysts at IFR Forex Watch. (JNP)
9:05 (Dow Jones) Asia Global Crossing (AX) said it won't be able to file its annual report on time because its auditor, Arthur Andersen, hasn't finished auditing its financial statements. Andersen has said it won't be able to complete its audit for 2001 until the investigations into allegations by a former employee of Global Crossing (GBLXQ) regarding the accounting and disclosure of certain reciprocal transactions are complete. Global Crossing, which is in bankruptcy, is Asia Global's parent. Asia Global Crossing expects to record a "more significant net loss" for 2001 than in the previous year, when its net loss was $146.9 million, or 29 cents a share. (JM)
8:58 (Dow Jones) Salomon Smith Barney's Paul Ting has bumped up his price targets on a host of international oil names. Says oil prices are likely to be influenced by two types of fundamentals: the "events driven" imponderables and the supply/demand driven "ponderables." He estimates prices could average $22.75 this year, and sees $19 next year and $20.50 thereafter. Expects outperformance in group over the near term, but continues to favor the top tiers, such as ExxonMobil (XOM), BP, Suncor (SU), and Conoco (COC). (TG)
8:47 (Dow Jones) Deutsche Bank Securities believes SmartForce's (SMFT) 1Q results will "significantly" miss the investment bank's expectations. "While we anticipated difficult near-term conditions, we significantly underestimated the magnitude of the impact." Deutsche Bank cut its rating to buy from strong buy; it now expects SmartForce to lose 31 cents a share during 2002, versus its previous target for a 60-cent profit. Analyst Peter Appert also cut SmartForce's 2002 revenue estimate to $203 million from $320 million. (NBB)
8:41 (Dow Jones) Treasurys are little changed in early trading, holding on to the strong gains they chalked up late Tuesday on the back on weak stocks, Mideast violence, concerns about a slow economic recovery, and corporate bond pricings. The market seems inclined to hold some of those gains into Friday's employment report, but some sellers are also said to be lurking in the wings. (SV)
8:35 (Dow Jones) Lehman is finally getting off the WorldCom (WCOM) bandwagon, after the stock has fallen nearly 52% since the beginning of the year. The firm downgrades WCOM to market perform from strong buy and lowers its revenue growth forecasts by roughly 300 basis points for 2002 and 200 basis points annually over the next few years. "We see minimal growth in revenues, EBITDA at WorldCom over the next few years, making valuation multiple expansion unlikely." WCOM closed at $6.78 Tuesday. (GS)
8:30 (Dow Jones) Worries about upcoming corporate profit reports haven't gone anywhere, but major stock market indexes are going to try to get back some of their recent losses. The Dow's been off for three sessions running, tech charts still look ugly, and Tuesday's news from PeopleSoft (PSFT) isn't going to help rectify that situation, at least until tech names become a bit more oversold. Treasurys are looking soft after Tuesday's big rally, and the only economic report of note is the ISM non-manufacturing reading. Equity futures showing slight gains. (TG)
(END) DOW JONES NEWS 04-03-02 |
