Wall Street outlook - U.S. futures off peaks, AMD lower - UPDATE 1 05.10.2004 14:24 Headlines
LONDON (AFX) - U.S. stock futures were higher early Tuesday and the European
could have some room left.
overnight peaks, dealers in London noted. Crude oil prices were holding above
$50 a barrel, likely keeping stocks in check. The Dow industrials were up 12
points to 10,219 ahead of 8:30 a.m. Eastern.
Hardware stocks were an expected focus after J.P. Morgan Securities overnight
raised its rating on IBM to overweight and downgraded Hewlett-Packard Co. to
neutral. The changes were "primarily driven by our incrementally more
concerns over the consumer PC and printer segments," the broker said.
H-P was marked at $18.95 in Frankfurt, down some 10 cents from its close Monday.
IBM was marked up as much as $88.05, or around 90 cents, London dealers said.
J.P. Morgan told clients it expected an "in-line September quarter" at IBM,
On the deal front: Japan's Toppan Printing Co. overnight said it had an
million. Terms call for Photomask shareholders to receive $27 a share in cash,
setting a 48 percent premium to the Monday close in the shares.
Internet group IAC/InterActiveCorp , the owner of Expedia, said it's decided
against making an offer for U.K. online travel company ebookers . The shares
dropped as much as 9 percent and were last down 4 percent in London.
Overnight, Camden Property Trust unveiled a $1.9 billion takeover, including
debt, of Summit Properties , creating a leading owner of apartment buildings.
Camden is paying $31.37 a share, representing a near 13 percent premium to
Summit's closing share price of $27.84 Monday.
Ahead on the data front: The Challenger survey of layoffs announced in September
will offer something of a curtain raiser for the U.S. government's jobs report
on Friday. The German jobless rate inched up to 10.7 percent, government
statistics on Tuesday showed.
Focus stocks
Netflix rose 16 percent in the pre-open to $20.08 after boosting its
third-quarter outlook late Monday. The stock was among pre-open volume leaders.
Eastman Kodak Co. said it will cut 870 jobs manufacturing sites in the U.K.
and France due to the "increasing popularity of digital photography." Kodak said
the actions are part of Kodak's three-year program, announced in January, to
reduce worldwide employment by 12,000 to 15,000 and to reduce total facilities
square footage by one-third.
Advanced Micro Devices was 50 cents at $13.20 after it warned on third-quarter
sales overnight. European chipmaker STMicroelectronics was down 0.5 percent;
Dutch chip equipment maker ASML was little changed.
ADM said late Monday that it now expects third-quarter sales to come in below
those reported in the second quarter, citing softness in its flash memory
business.
"We believe that defined strategies to take market share by significant flash
competitors, including Intel Corp. , have put pressure on AMD's flash
business," UBS concluded. "We expect that AMD has performed relatively better in
its MPU business, particularly in the server sector." INTC was down 0.2 percent
at $21.09.
Secure Computing lifted its financial outlook for the third quarter, citing a
strong performance in both its federal and commercial markets. Shares rose close
to 14 percent at $9.
Geron shares jumped almost 10 percent to $7 in pre-market action after the
company received a patent covering the growth of human embryonic stem cells,
hESC, in the absence of feeder cells.
German sporting goods brand Adidas-Salomon CEO Herbert Hainer at an investor
presentation said the apparel industry needs to lift prices. "Nike , Reebok ,
retailers, everyone, must have an interest in bringing prices up, otherwise no
one will make any money," he said. Yet Hainer sounded an upbeat tone after
hiking earnings estimates twice during the year, saying there's no reason why it
can't top its 10 percent operating margin target for 2006.
JP Morgan initiated coverage of JDS Uniphase with an 'underweight,' telling
clients "we believe end-user demand for optical components, while relatively
stable, is not strong enough to cause a pull on the component end of the food
chain, resulting in a lack of pricing power and lackluster demand for JDSU."
Danish shipping company TORM , which is listed on the NASDAQ, said its was
raising its profit before tax expectations to $183 million to $192 million from
$146 million to $154 million. It said the increase in expectations consists of
improved earnings of approximately $17 million and an extraordinary dividend
payment of $21 million from its stake in Danish shipping company Norden.
Morgan Stanley raised its rating on European oils stock Norsk Hydro to
overweight from underweight and cut its ratings on France's Total to
equal-weight from overweight and Italy's Eni to underweight from overweight.
"European oils have outperformed the market by 9 percent year to date; beyond
the current long-term oil price adjustment, we see an increasing focus by the
market on the worrying structural transition. We expect one last, oil
price-driven lift, before the party ends," the analysts told clients.
Smith Barney Citigroup overnight upped its rating on carrier AT&T to hold from
sell, citing the stock's dividend yield as well as management's restructuring
plans. "We expect T to soon announce a series of additional steps to try to
improve near-term value and address the persistent revenue erosion across its
operating segments," the broker told clients. Shares of AT&T rose 4.3 percent
Monday on the renewed speculation that the phone company could cut more workers
and write down the value of assets to improve profits.
This story was supplied by CBSMarketWatch. For further information see
www.cbsmarketwatch.com. Gruß Pichel
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