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To: 2MAR$ who wrote (48721)	4/12/2002 9:32:51 AM
From: 2MAR$	Read Replies (1) \| Respond to of 208838

DJ MARKET TALK: Pharmaceutical Sector Growth Not Looking Up 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 9:31 (Dow Jones) "More than a few bad apples could spoil the bunch," says JP Morgan analyst Carl Seiden in describing the pharmaceutical sector. Although the drug companies have varied growth outlooks, he is reducing the sector's weighting to market weight from overweight. Stemming from patent expirations, in general, and specific issues, "the biggest negative is eroding near-term fundamentals, with 2002 industry growth now cut to 9% from 13% in 2001 and 17% in 2000," said Seiden. However, he sees earnings acceleration for the sector in 2003. And with the "extraordinarily low" current valuation, an overweight weighting might be justified if Seiden was not concerned about the continued risk of negative revisions for weaker players like Merck (MRK), Schering-Plough (SGP) and Bristol-Myers (BMY). (BMM) 9:17 (Dow Jones) Microsoft (MSFT) Chairman Bill Gates reported a 5.3% stake in Fisher Communications (FSCI). Gates beneficially owns 455,700 common shares. The holdings were disclosed on a Schedule 13G, which denotes a passive investment stake in a company. (BS) 9:12 (Dow Jones) Score one for the go-slow case for monetary policy. Retail sales were a bit soggy, but core wholesale prices advanced by a tame margin. That suggests the Fed has both the room and the reason to move slowly in hiking interest rates, and may even diminish the chance of a 25-BP rate hike at the June FOMC. (MSD) 9:03 (Dow Jones) The SEC's dismissal of its IBM investigation without taking any action "is good news for IBM and accounting concerns should fade," Merrill analyst Steven Milunovich says. "We still need to understand the reasons for the earnings miss and the implications for future profits." He maintains his neutral intermediate-term rating. (GS) 8:59 (Dow Jones) Overall, the early economic data for March shows a welcome settling down in the pace of economic activity after a spurt in January and February. Payrolls only rose moderately, the unemployment rate rose, retail sales only edged up modestly, especially setting aside the rise in gas station sales. The widespread forecasts of 5% GDP growth in 1Q only reflects a one-quarter inventory adjustment, not the start of a growth explosion. (JM) 8:50 (Dow Jones) It's not hard to figure out the demand for the two IPOs expected to begin trading today. JetBlue (JBLU) sold nary 5.9 million shares, a bit more than expected, at $27 a share, a dollar more than recently raised price talk of $25 to $26. Ribapharm (RNA), however, sold 26 million shares at just $10 each, well below talk of $13 to $15. MorningNotes.com has maintained its A+ rating on JetBlue, which suggests a strong opening premium, but cut Ribapharm from A+ to B, which is looking for a small opening premium. (RJH) 8:43 (Dow Jones) The CPI rose by 1.0% in March as energy prices rose by 5.5% and food prices rose by 0.6%. Core prices only rose by 0.1% with some of the usual suspects well behaved: car prices up 0.4% and tobacco only up 0.1%. The absence of core inflation is a welcome sign that inflationary pressure in general stays under wraps. (JM) 8:39 (Dow Jones) Treasurys are quickly moving off their lows and heading into positive territory following the benign ex-energy PPI number and the slower-than-expected retail sales. Still, the market is sitting near the top of the range and may not be inclined to break significantly higher, with Fed officials having spouted hawkish words in recent days. (SV) 8:36 (Dow Jones) Retail sales rose by only 0.2% in March and Feb. was revised to +0.2% from +0.3%. Non-auto sales rose by 0.4%. There was even more softness in retail sales when it's recognized that gas station sales were up 3.8%. (JM) 8:30 (Dow Jones) The stock market looks like it's ready to put aside the bad feelings generated Thursday and recoup at least some of those dramatic losses. The SEC decided to wait for the market to close before saying its look at IBM was wrapped up without any action being taken. IBM shares are looking up. The biggest day of the week from a data standpoint kicks off with a PPI reading, followed by a glimpse of consumer sentiment. Oil prices are looking lower after the ousting of Venezuela's President, which raises the chances of increased production from that country. Stock futures look strong - S&Ps up 7, Dow futures gain 65. Treasurys cautious in front of data. (TG) (END) DOW JONES NEWS 04-12-02