MARKET TALK: Maybe It Was All Just A Dream10 May 16:03
Edited by Thomas Granahan Of DOW JONES NEWSWIRES
(Call Us: 201-938-5299; All Times Eastern)
4:03 (Dow Jones) Those folks who said Wednesday's big gains were a flash in
the pan got more evidence Friday. Just after noon, stocks started heading south
in a big way, leading to a fairly ugly close. DJIA fell 98 to 9939
(preliminary), while the Nasdaq gave back 49 to close smack on the 1600 level.
S&P 500 fell 18 to 1055. (RJH)
3:45 (Dow Jones) Analysts like to tout how the IPO market has rebounded, but
the numbers don't bear that out. There have been just 28 domestic IPOs this
year, raising $10.95 billion, against 27 deals for the comparable period of
2001, raising $10.36 billion, according to Dealogic. (RJH)
3:25 (Dow Jones) Japanese Government Bond holders - some 94% of whom are
domestic accounts - will be hoping that Moody's, which has said it probably
will make a decision by Monday whether to cut Japan's "Aa3" sovereign rating by
as much as two notches, does so early in Monday's Asian session. That would
allow domestic accounts to trade on the news, although JGBs have already priced
in much of the move in advance, say analysts. (JNP)
3:02 (Dow Jones) Despite some signs of near term "stabilization" of Japan's
economy, attributed in part to a rise in export activity, Citigroup economist
Kim Schoenholtz says the country's long-term prospects remain bleak. The drag
from Japan "will mute the global recovery and limit the scope for sustainable
yen gains," Schoenholtz says, on the eve of a widely expected Moody's decision
whether to cut Japan's sovereign rating by as much as two notches, expected by
Monday. (JNP)
2:37 (Dow Jones) Fewer U.S. banks tightened loan standards over the past
three months, but banks continue to report lower demand for loans, the Federal
Reserve said Friday. "Results of the survey indicate some further tightening of
standards and terms for loans to both businesses and households," the Fed said
in its latest senior loan officer survey. (MSD)
2:17 (Dow Jones) Western Wireless (WWCA) bonds are down sharply after
disappointing 1Q earnings. The results also have raised some concern that
Western could violate covenants soon. Western's 10 1/2% notes of 2006 were
quoted at 80. The bonds typically trade in the high 80s, trader says. Shares
off 42% at $3.30. (NAB)
2:00 (Dow Jones) Things continue to be dicey in stocks. While it seems
unlikely they'll be revisited Friday, some of the major averages aren't too far
from giving back in their entirety the gains from Wednesday. Such a move means
a test of the September lows is a real possibility, technicians say. Of the 86
Dow Jones industry groups, only about a dozen are higher, and just two - oil
drilling and equipment and cosmetics - are up by 1% or better. Intel,
Microsoft, H-P, and SBC weigh the most on the DJIA, which is now off 43 at
9994. Nasdaq Comp drops 45 to 1605 and S&P 500 falls 13 to 1060. (TG)
1:49 (Dow Jones) EBay (EBAY) amended marketing and advertising representation
agreements with AOL Time Warner (AOL), making them dependent on AOL meeting
performance goals and reducing costs. EBay said its payments under the
marketing deal are for "online advertising impressions delivered," but didn't
specify the nature of the advertising representation agreement. In the
marketing deal, EBay had been obligated to pay AOL $18.75 million per year for
each of the contract years ending March 23, 2003 and 2004. Under the amended
agreement, however, AOL can extend the agreement past March 23, 2003, only if
it meets performance goals. Also, EBay's fee is capped at $15 million for the
year ending March 23, 2004. AOL off 3.8%, EBAY drops 4.6%. (BS)
1:30 (Dow Jones) Stocks' continued pullback sent the various option
volatility indexes once again near the top of their recent short-term ranges.
The CBOE's market volatility index, or VIX, rose 1.14 to 25.50, while the
CBOE's Nasdaq Volatility Index, or VXN, rose 2.80 to 50.88. The last time VXN
closed above 50 - which was on Tuesday, for just the third time this year -
stocks put in an explosive rally the following session. But other option
indicators had been more bullish on Tuesday: put/call ratios were higher and
implied volatility in many large stocks showed they were priced to move. On
Friday afternoon, put/call ratios for both stock and index options were
neutral. (KT)
1:09 (Dow Jones) If you want to meet the person who sold you that circa-1900
Hamilton upright piano over the Internet, here's your chance. EBay (EBAY) is
sending out e-mail invites for its first-ever "eBay Live" conference, a
three-day extravaganza scheduled for June in Anaheim, Calif. The gathering will
give eBay buyers and sellers the opportunity to meet in person, discuss the
finer points of their Beanie Babies collections, voice concerns and questions
to company executives and take courses on how to buy and sell more effectively.
(RAS) 12:51 (Dow Jones) Bank One chief economist Diane Swonk believes consumer
spending will likely slow in coming months as effects of refinancings and
vehicle sales diminish. In a monthly report, she said unless business picks up
where the consumer leaves off, "the fate of the recovery is still in question."
That's why Fed is delaying any rate hikes until August. Once it starts, though,
she said hikes could be "fairly aggressive." (MEM)
12:32 (Dow Jones) Accenture (ACN) said a difficult economic environment over
the last year has trimmed its revenue by about 1%, but it expects to meet or
beat analysts' estimates of diluted earnings of 26 cents a share in the 3Q
ending May 31. Accenture expects revenue before reimbursements for the quarter
to be about at last year's level, which was $2.95 billion. Cost management
programs have allowed the company to maintain or improve operating margins, but
Accenture also warned that "cost-management initiatives may not be sufficient
to maintain our operating margins if the current challenging economic
environment continues for several quarters." ACN up 4.3% at $21.07. (TC)
12:18 (Dow Jones) Kimberly-Clark (KMB) holders have voted that the company
should seek shareholder approval of any "poison pill" program. Stockholders
approved a proposal requesting the company's board to seek holder approval
before adopting a poison pill and redeem or terminate any poison pill in
effect. A poison pill, or shareholder rights plan, is a way for a company to
significantly increase the cost of a hostile takeover. The proposal was opposed
by Kimberly-Clark's board. The company said 61.8% of the shares represented at
the meeting voted for the proposal, while 36.5% voted against and 1.7%
abstained. Kimberly-Clark said the approved proposal isn't binding and that its
board will discuss it at a future meeting. (CS)
11:59 (Dow Jones) Energy merchant bonds are down a point across the board
after Reliant Resources (REI) canceled its already-priced $500M bond deal. A
bond trader describes trading in the sector as "very sloppy," adding, "I think
it's the pressure of the unknown." Among sector credits, Mirant (MIR) 8.3% note
of 2011 are at 89 bid, Dynegy (DYN) 6 7/8% notes of 2011 are around 70 1/2, and
Williams Cos. (WMB) 8 1/8% of 2012 are trading at a spread of 335. REI shares
off 13%, MIR drops 8%, WMB sheds 5%, and DYN down 4%. (RTB)
11:47 (Dow Jones) By very recent standards, the action in stocks is downright
dull. More consolidation for techs after their sprint higher Wednesday, a rally
so sudden and intense that some technicians think it may have done more harm
than good. Consensus among these folks is that stocks may have a couple of
weeks of generally higher trade in them, but worst isn't yet over. DJIA off 23
at 10014, Nasdaq Comp slips 24 to 1626, and S&P 500 loses 8 to 1065. Wireless,
airlines, Internets, and heavy equipment among the worst-acting groups, with
oil, entertainment and aluminum looking up. (TG)
11:33 (Dow Jones) ADRs of Sabesp, Brazil's largest water utility, are rising
2.3% to $11.48 in their first session on the Big Board. The state-owned utility
went ahead with a secondary share offering late Thursday, but was forced to
price it at an 11% discount as investors shy away from Brazil ahead of October
presidential elections. (ME) (END) DOW JONES NEWS 05-10-02 04:03 PM |
