DJ MARKET TALK: This Is No Rumor: IBM At 52-Week Low
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
11:32 (Dow Jones) It's official. Shares of IBM just set a new 52-week low. Market talk of a SEC investigation is weighing on the stock Thursday. Recently shares of Big Blue were down 5.7%, or $5.15, to $83.89. (DLF)
11:20 (Dow Jones) Stock market woes are compounding dollar softness vs. EUR. Drop for IBM shares and lack of clarity on SEC investigation rumors causing investors to abandon USD for relative safety of EUR. EUR/USD now at 0.8837, just below intraday high at 0.8845. (RF)
11:14 (Dow Jones) Merrill Lynch's (MER) options are active Thursday, with the stock down 5.5%, or $2.82, to $48.10. The firm is under state attorney general's order to overhaul research on companies that are also investment banking clients, and implied volatility of options - from those expiring April to those expiring October - are up a notch from historical level as investors expect stock to move. Merrill's April 50 puts traded 2,002 contracts in the first hour, compared with open interest of 27,527, and gained $1.05 to $2.60 at the ISE. (KT)
11:07 (Dow Jones) EUR is back at its best levels of the day, while JPY remains soft. So EUR/JPY stays the big winner, up more than a yen on the day. EUR is $0.8838; USD/JPY is Y131.48; EUR/JPY is Y116.26. (JRH)
10:48 (Dow Jones) "Sorry, Jack. I'm not convinced." Salomon Smith Barney restaurant analyst Mark Kalinowski, an avowed bear on McDonald's (MCD), sat down with chain CEO Jack Greenberg to hear the bull's side of the story. Greenberg said efforts to improve domestic service are "on the right track." And he defended the pace of new-unit expansion as prudent investing. But Greenberg admitted that changing the corporate culture in such a large organization hasn't been easy -- partly because of McDonald's "enormous success." After hearing the pitch, Kalinowski reiterated his neutral rating on the stock. Shares up 0.4% at $28.05. (RLG)
10:35 (Dow Jones) The deepest shades of blue among blue chips are at the bottom of the Dow industrials. AT&T off 5.6% after, far from acting like a blue chip, the company pulls out a reverse split. GE is next worst, off 5.2% at $35.25, after 1Q revenue comes in below views, while talk of an SEC look into IBM has those shares off 3.7%. The roller-coaster ride that has been this week's action in major averages continues, with the above noted laggards joining with overall tech weakness to make for plenty of red. DJIA off 82 at 10300, Nasdaq Comp slips 19 to 1747, and S&P 500 drops 11 to 1119. (TG)
10:24 (Dow Jones) Shares of IBM were under pressure after reports of a Securities and Exchange Commission inquiry into Big Blue. A spokeswoman from IBM declined to comment "on discussions with government agencies." An SEC spokesman wasn't immediately available to comment. Stock down 3.7%. (DLF)
10:19 (Dow Jones) UBS Warburg raised its rating on Delta Air (DAL) to buy from hold, just five weeks after reducing it from buy. The firm cited a 25% decline in its share price from a recent high, which it said makes the stock attractive again. Its target price on Delta for early 2004: $42-$44. The stock is up 1.4% at $30.05 early Wednesday. The airline sector corrected about 15% in the past month, notes analyst Samuel Buttrick of UBS, due to higher oil, fare cuts by America West Holdings (AWA), and earnings estimate reductions. (SON)
10:10 (Dow Jones) Alaska Air Group (ALK) Chairman John Kelly took home a profit of $157,500 after he exercised stock options and immediately sold the stock in March. Kelly, chairman and CEO since 1995, exercised options for 7,000 shares at $21.50 a share on March 15 and sold them the same day for $33.50 a share. He also acquired 6,000 shares from options at $21.50 a share on March 18 and then sold them for $33.75 a share the same day, the filing said. ALK up 0.7% at $32.23. (RG)
10:03 (Dow Jones) St. Louis Fed's Poole, an FOMC non-voter, gave a relatively hawkish interview to USA Today, saying the Fed should be vigilant on inflation. "It is certainly my desire...to see the Fed act promptly enough and in correct measure so that we never see an inflation problem," said Poole in the interview. He also notes the unemployment rate will not snag the Fed's efforts to raise rates, if all other areas of the economy call for rate hikes. "If everything else is going the other way, then the unemployment rate is not decisive," said Poole. Poole said the recession ended in Dec. or Jan. and the upturn would be muted. But he said growth may be stronger than many expect, due to "expansionary" monetary and fiscal policy. (SV)
9:58 (Dow Jones) Enron (ENRNQ) bonds continue to drift lower, says Harold Rivkin, principal, H. Rivkin & Co., Princeton, N.J. Currently bid at a dollar price of 13, they were being bid closer to a dollar price of 15 in mid-March, he says. (MCG)
9:41 (Dow Jones) WellPoint Health Networks (WLP) said the Internal Revenue Service likely won't seek taxes on an $800 million payment it made in 1998. The managed care company received a letter from the IRS saying a ruling not to tax the $800 million payment made by Blue Cross of California when it converted from a nonprofit company wouldn't be revoked. WellPoint merged with Blue Cross of California through a recapitalization in 1996. WellPoint said earlier this month that the IRS sent a letter in March saying it was considering rescinding its decision that the payment made was deductible as an ordinary business expense. (CS)
9:28 (Dow Jones) "Everybody was one-way on the euro and they decided to take them back," was one reason given in the market for the EUR's 30 tick bounce in early NY. EUR is $0.8834; USD/JPY is Y131.38; EUR/JPY is Y116.10 (JRH)
9:22 (Dow Jones) While Yahoo (YHOO) managed to increase financial targets for 2002, Merrill says the increases were not significant in light of the HotJobs acquisitions and the extension of the Overture deal. At $18, shares trade at 46 times Merrill's 2003 cash flow estimate of $173 million, and to sustain that lofty multiple, firm believes significant upside surprises and increase in financial targets are required. Cuts intermediate-term rating to neutral from buy. (TG)
(END) DOW JONES NEWS 04-1 |
