Averages edge down in tentative
trade
PPI off 0.1%; retail sales shed 0.2%
| By Julie Rannazzisi, CBS.MarketWatch.com |
Last Update: 9:48 AM ET Apr
12, 2001 |
NEW YORK (CBS.MW) – Investors showed some cautiousness at the open
Thursday as they digested a spate of economic news and a flurry of
earnings reports.
The market initially staged a muted reaction to the morning’s spate
of economic data before turning lower. March retail sales shed 0.2
percent compared to expectations for a flat reading. Excluding autos,
sales were down 0.1 percent.
The March producer price index fell 0.1 percent while the core, which
excludes the volatile food and energy components, edged up 0.1 percent,
compared to predictions for a 0.1 percent increase both overall and at
the core.
Finally, weekly initial claims rose 9,000 to 392,000, the highest
level since March 1996. Still on tap is the Michigan consumer sentiment
index for April. View Economic Preview and economic calendar and
forecasts.
The Dow Jones Industrial Average ($DJ) lost 5 points to 10,007.
The Nasdaq Composite ($COMPQ) edged down 3 points, or 0.2 percent, to
1,896 while the Nasdaq 100 Index ($NDX) rose 3 points, or 0.2 percent,
to 1,650.
The Standard & Poor’s 500 Index ($SPX) added 0.3 percent while
the Russell 2000 Index ($RUT) of small-capitalization stocks rose 0.1
percent.
Volume came in at 65.2 million on the NYSE and at 135 million on the
Nasdaq Stock Market. Market breadth was negative, with decliners
outpacing advancers by 16 to 12 on the NYSE and by 23 to 13 on the
Nasdaq.
Specific movers
Yahoo (YHOO) shares fell 1.7 percent. The company posted after the
close Wednesday a first-quarter profit of 1 cent a share vs. breakeven
results expected by First Call/Thomson Financial. Yahoo also announced
it was slashing 12 percent of its work force. Looking ahead, the portal
giant said it expects to earn 2 to 6 cents a share for the year on
revenue of $700 million to $775 million. Wall Street projects a 5-cent a
share profit for 2001.
Commenting on Yahoo’s results, CS First Boston said: “The only
potential near-term catalyst is the hire of a new CEO, and it remains to
be seen whether that individual will be well-received by the market.
Despite limited visibility on the forward outlook, we believe Yahoo has
sustainable value longer-term, but would not buy the stock at its
current level.”
A plethora of earnings releases flooded the tape before the opening
bell Thursday.
Dow stock General Electric (GE) reported first-quarter earnings of 30
cents a share, matching the First Call estimate. Shares rose1.2 percent.
Biotech behemoth Biogen (BGEN) posted a first-quarter profit from
operations of 46 cents a share, in line with the Wall Street estimate.
The stock gained 3.1 percent.
In the networking arena, Juniper Networks (JNPR) posted first-quarter
earnings of 25 cents a share, in line with the First Call estimate. The
stock jumped 5.8 percent.
J.P. Morgan lowered its rating on Broadcom (BRCM) to a market
performer. “We are generally cautious towards the communications IC
sector given the lack of strong demand in communications equipment
markets driven by carrier capex or enterprise IT budgets. On an absolute
basis, we do not believe these stocks represent a compelling
value,” J.P. Morgan said in a note to clients. Broadcom fell 3.8
percent.
Lehman Brothers issued a research note on Microsoft (MSFT) ahead of
the software kingpin’s third-quarter results next week. Lehman estimates
EPS at 43 cents, adding that it would not be surprised to see a penny
shortfall. “Given the state of the PC market, it’s difficult to
envision 15 percent growth. We see 10 percent as more realistic,”
the brokerage added. Lehman notes that Microsoft’s performance relative
to the Nasdaq has been stellar since the start of the year but cautioned
that as the market eventually broadens, it expects Microsoft shares to
begin to underperform as investors seek higher growth potential
elsewhere. Shares shed 0.1 percent.
Treasury focus
Government issues, which have continued to take their cues from stock
market gyrations, opened mixed, with short-term issues under some modest
selling pressure.
The Treasury market will close at 2 p.m. ahead of Good Friday.
The 10-year Treasury note was up 3/32 to yield ($TNX) 5.11 percent
while the 30-year government bond added 7/32 to yield ($TYX) 5.59
percent.
In the currency arena, dollar/yen slid 1.2 percent to 123.25 while
euro/dollar edged down 0.4 percent to 0.8844.
Julie Rannazzisi is markets editor for CBS.MarketWatch.com in New York.
