MARKET TALK: Roach's Worry: When Does Credibility Return?
01 Jul 13:49
Edited by Thomas Granahan
Of DOW JONES NEWSWIRES
(Call Us: 201-938-5299; All Times Eastern)
1:49 (Dow Jones) Morgan Stanley's Stephen Roach says, "The credibility of US
businesses is being challenged as never before. What keeps me awake at night is
how, and under what circumstances, the bleeding stops." He says Corporate
America "needs to become far more aggressive in clearing the decks and
restoring its credibility." (JCC)
1:39 (Dow Jones) Treasurys are off intraday lows as stocks fall marginally.
Traders say the market is grasping for direction after stronger-than-expected
ISM numbers and a still weak stock market. Trading is quiet as some
participants are absent for an extended July 4th holiday. Ten-year Treasurys
are down 6/32 to yield 4.83%. (JSX)
1:29 (Dow Jones) Pru's Ed Keon notes all sectors within S&P 500 had negative
returns in June with exception of energy, which was flat. Information tech
(-1.8%), health care (-1.3%), and consumer discretionary (-1.1%) were biggest
negative contributors for month. Year to date, IT (-5.6%), health care (-2.5%),
and telecom (-2%) have been biggest negative contributors, while consumer
staples (+0.4%) and energy (+0.3%) have been biggest contributors. (TG)
1:02 (Dow Jones) S&P will review British Telecom's (BTY) rating outlook soon,
agency says in a report summarizing the state of play at Europe's
investment-grade telcos. This follows recent review with company management,
and comes given implementation of debt reduction strategy, S&P says. BT
currently A- with negative outlook. (RGB)
12:47 (Dow Jones) No sign of a double dip, says Merrill's Bruce Steinberg. In
fact, the U.S. recovery is alive and well - accounting scandals will lead to
regulatory reform but they will not impair the strength of the recovery. He now
looks for 2002 GDP of 3.2%, up from 3.1%. (TG)
12:32 (Dow Jones) USD remains firm even as stockshead south, with both DJIA
and Nasdaq now trading in negative territory. EUR/USD currently listed around
$0.9882 while USD/JPY is at Y119.96. (TDL)
12:15 (Dow Jones) "I don't think much of the data right now because no one's
looking at it," Jeremy Fand at Friedberg Mercantile Group said of
stronger-than-expected ISM numbers. People are more concerned with the U.S.
stock market and its effect on the current account deficit, he added. (TDL)
11:57 (Dow Jones) Federal funds futures prices rotating around unchanged
after a slight weakening in prices immediately following this morning's data
releases. Contracts continue to reflect around a 50% chance of a tightening
scenario by the early November Fed meeting. (CMN)
11:49 (Dow Jones) The Russians are beating the drumsticks again about another
possible ban on U.S. poultry. This time they're insisting that fowl imported
from the U.S. be certified safe under Russian veterinary standards. Talks
between the two countries are being called "quite unsatisfactory," and Midwest
Research agri-analyst Christine McCracken advises clients that the threatened
Aug. 1 ban could be bad news for Tyson Foods (TSN) earnings for several
quarters. Recall that when Moscow stopped imports earlier this year, a glut of
chicken in the U.S. led to lower prices for pork and other meats and impacted
shares of Tyson, Smithfield Foods (SFD) and Hormel Foods (HRL). (RLG)
11:38 (Dow Jones) Stocks aren't exactly ushering in the new quarter with an
abundance of confidence. Tobacco and home construction look solid, but biotech,
technology services (the likes of EDS and Computer Sciences), and airlines act
poorly. Street seems pretty comfy saying 2Q will be first quarter in a while of
sequential growth, but expensive stocks need help from second half numbers,
help that may not be coming. Quarterly close on major averages did avoid
breaking very long-term bull trends, but shorter-term technicals are dicey at
best. Fears over July 4 attacks not helping, either. DJIA flat at 9245, Nasdaq
Comp falls 26 to 1436, and S&P 500 eases 5 to 984. (TG)
11:20 (Dow Jones) Talx (TALX) says the SEC is investigating its August 2001
secondary offering of common stock and its financial results for the 2Q of the
year ended March 31, 2001. Talx says it's cooperating fully with the
investigation and has voluntarily produced documents requested by the SEC. It
has also made its employees available for interviews or testimony upon request.
"We believe that there is no basis for any action by the commission," Talx
says. Shares are halted at $14.78, down $4.18, or 25%. (DL)
11:12 (Dow Jones) WorldCom (WCOME) bonds were steady early Monday after last
week's carnage. The 7 1/2% notes due 2011 were quoted at 15 bid, 16 offered.
Traders said the bonds are stabilizing in the mid-teens. Xerox (XRX) bonds also
were unchanged to slightly lower with the 9 3/4% notes due 2009 quoted at 82
bid, 83 offered. (NAB)
10:58 (Dow Jones) An early look at Disney's (DIS) fiscal 3Q from Prudential:
sees revenue at $5.87 billion and EPS of 17c, vs. Street view of 18c. Results
should exhibit sequential improvement, but negative trends will persist across
all segments except consumer products. Says improving performance at theme
parks will be overshadowed by an underperforming film slate and the weak ad
market. Keeps buy rating, $30 target. Company reports week of July 29. DIS off
0.2% at $18.86. (TG)
10:44 (Dow Jones) Clearly the lag effect many had expected before the weaker
dollar kicks in on U.S. manufacturers bottom lines is somewhat questionable:
ISM showed export orders rose for the third month, partly due to the weaker USD
already lifting sales abroad. The ISM is now at its highest level since
February 2000 and a long way off its low of 39.5 back in Oct. 2001. (GMM)
10:33 (Dow Jones) It's now or never for a bounce in stocks, says Arnhold &
Bleichroeder technician John Roque. He points out that for the last eight days,
Nasdaq declining volume has been greater than or equal to 60% of total volume,
which is second only to the 17 days from Sept. 5 - Oct. 3, 2001. He says
support on S&P 500 comes in at about 940, while rallies will have trouble near
1015, and if that's broken, 1035. "While we're still very skeptical of any
attempt at upside activity, we figure either one of two things is going to
happen near-term: either we get a bounce soon, or the indexes are going to get
hit very hard," Roque says. (TG)
(END) DOW JONES NEWS 07-01-02
01:49 PM |
