MARKET TALK: Rally Brings Another Drop In Volatility
16 Apr 12:50
Edited by Thomas Granahan
Of DOW JONES NEWSWIRES
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12:50 (Dow Jones) Volatility dropped a marked notch as stocks rally on some
good earnings news from the tech sector. The CBOE's market volatility index, or
VIX, is down 1.71 to 20.67. In the tech sector, the CBOE Nasdaq volatility
Index, or VXN, fell 2.20 to 39.68, easing below 40 for the first time since
earlier this month. The Amex's Nasdaq Volatility Index, or QQV, is down 1.73 to
33.90. The rare rally was welcomed by many but the mood in the options market
remains somewhat skeptical, with many waiting to see how the rest of this
week's earnings reports stack up. (KT)
12:46 (Dow Jones) Charles Schwab (SCH) employees have reason to be a little
more upbeat this year. Hurt by the online-trading slump, Schwab went through
two big rounds of job cuts last year. But Schwab, which didn't pay employee
bonuses last year, has set aside about $13 million to do so this year. CFO
Christopher Dodds calls the bonuses, which he said will be paid out over the
next few weeks, "modest." Schwab has no current plans for more large-scale job
cuts, Dodds says, but is keeping a tight lid on payroll expenses. Earlier,
Schwab reported a 3% drop in 1Q net income. Schwab shares are up 3.6%. (GFC)
12:33 (Dow Jones) Wireless modem maker Sierra Wireless (SWIR) is down 4% at
$9.75 after BMO Nesbitt analyst Ray Sharma cut his rating to market perform
from outperform. The analyst said disappointing guidance from the likes of
Research In Motion (RIMM) and Handspring (HAND) indicate that carriers are
selling and marketing 2.5G services at a slower rate than expected. He also
said competition, particularly from major semiconductor companies, is
increasing. Sierra is scheduled to report 1Q results after the close Tuesday.
The mean estimate is for a loss of 25 centsa share. (SEW)
12:18 (Dow Jones) Talk of Robbie Stephens' sale comes after the firm went
from being a big player in leading tech IPOs during the boom, to be a nonentity
during the bust. Robbie led just two IPOs last year, the last one from Nassda
(NSDA) on Dec. 12, according to Thomson Financial. Since late 1998, the typical
RS-led IPO is off 45.6% from its offering price. (RJH)
12:06 (Dow Jones) In a move to strengthen its restructuring department,
Lazard LLC has hired David Kurtz, a prominent bankruptcy lawyer with Skadden
Arps Slate Meagher & Flom, as a managing director. Kurtz, who served as lead
counsel on a number of the largest corporate restructuring of the past decade
including Polaroid and Trans World Airlines, will be based out of Lazard's
Chicago office. (JAW)
11:54 (Dow Jones) Salomon calls Texas Instruments' (TXN) order trends
impressive, with analog orders up 30% and overall semi orders up 18%
quarter-over-quarter. Notes TI is confident it's seeing the early stages of a
cyclical recovery in wireless handsets and personal computing, though telecom
equipment remains weak. Salomon ups 2Q EPS view to 7c from 3c, mostly on higher
margins, and for full year to 32c from 20c. Keeps buy rating and $40 target.
Shares up 6.6% at $34.20. (TG)
11:37 (Dow Jones) After recently hitting an all-time high, shares of Quest
Diagnostics (DGX) have pulled back near their 10-day moving average. Joe
Sunderman, of Schaeffer's Investment, is bullish on the stock, noting the
strength over the past several weeks, when the shares displayed a stair-step
climb along the 10-day and 20-day moving averages. That bullish technical
driver is even more appealing, he says, given the bearish sentiment backdrop on
Quest. Traders should target a move to $94.20, he says. Quest down 0.6% at
$85.18. (TG)
11:22 (Dow Jones) Treasury Secretary Paul O'Neill Tuesday cited the
efficiency of global supply chain management as a key source of productivity
growth. Corporate confidence inthis supply chain is an "obscure reality that
most American consumers take for granted -- but it underpins the low prices and
high quality we have come to expect." (DAL)
11:08 (Dow Jones) Accenture (ACN) reached agreements to push back the
deadline under which the firm can be included in two Enron-related lawsuits
against Arthur Andersen. Accenture, which separated from Arthur Andersen last
year, said that even if it is included in the lawsuits, it has no legal
liability. However, lawyers suing Arthur Andersen have suggested that Accenture
could be added to the lawsuits because of the consulting firm's past ties with
Arthur Andersen. Accenture also said it had reached a similar deal in another
lawsuit involving a former Arthur Andersen client. It didn't identify the
former client, nor did it identify the plaintiffs in the two Enron-related
lawsuits, except to say that those two suits were filed in Houston. (TC)
10:59 (dow Jones) Robust start of the session for stocks. Only 11 of the 86
Dow Jones industry groups are lower, and they're only off modestly - gold is
biggest loser, down 1.8%. Wireless is having a big day, with large gains in
Nextel, AirGate, and Sprint PCS, among others. Favorable combo of half-decent
1Q numbers and accommodating data make for impressive gains on major averages,
which were going to be receptive to good news coming off a rocky spell. AT&T up
7%, leading Dow higher, followed by Intel, GM, H-P, and GE. Only Cat, Kodak,
and Home Depot are lower. DJIA up 165 to 10258, Nasdaq Comp gains 48 to 1801,
and S&P 500 climbs 20 to 1122. (TG)
10:49 (Dow Jones) Considering Intel (INTC) gave a mid-quarter update last
month, analysts aren't expecting any surprises out of the chip maker when it
reports 1Q earnings after the close. As for its 2Q, some Wall Street watchers
expect Intel to talk of seasonal weakness and provide a wide revenue target.
Douglas Lee, an analyst at Banc Of America Securities, predicts the range will
be between $6 billionand $6.7 billion. While the 2q is usually down
sequentially about 3%, Lee said it could be a little worse. Salomon's Jonathan
Joseph, however, said the 2Q seasonal weakness is already priced into the
stock. The analyst has a 12-month price target of $45 on Intel. Stock recently
trading up 5% at $29.61. (DLF)
10:39 (Dow Jones) "Although it remains somewhat premature to draw firm
conclusions, the data received thus far have been very poor, and this
reinforces our belief that the final results on seasonal tax receipts will
generate sizable upward adjustments to official budget deficit forecasts for
the current and future fiscal years," says Goldman Sachs' John Youngdahl. (JCC)
10:28 (Dow Jones) Surpassing eBay (EBAY) and Amazon (AMZN) in online
popularity during March was something called the Gator Network, according to
Jupiter Media Metrix (JMXI). No, it's not for devotees of the University of
Florida's football team. It's Gator Corp., a Redwood City, Calif., maker of
Internet software including the eWallet, which remembers login names and
passwords and fills in online forms with one click of the mouse. Gator had 32.2
million U.S. users in March, ranking No. 7 on Jupiter's list. The top three
most-visited online properties remained AOL Time Warner (AOL), Microsoft's
(MSFT) MSN and Yahoo (YHOO). (PDL)
(END) DOW JONES NEWS 04-16-02
12:50 PM |
