A word of caution: When we last saw your broker, he was, if not quite three sheets to the wind, definitely luffing by the time he showed up at the
Tavern on the Green
-- one of several shindigs different brokerages held last night to kick off the
Securities Traders Association
confab here in New York. Folks, you might want to have your broker repeat your orders back to you more than once. Slowly.
Beyond that, with stocks overseas performing well and New York set to follow suit, there isn't that much to worry about this morning. Investors have even been able to show a sanguine reaction to first-quarter
gross domestic product
growth coming in at a strong 4.5% -- well above the 3.3% economists expected.
Technology stocks are getting a good bid ahead of the open, looking to reverse three days of declines. But with
beating earnings estimates early, cyclicals may not fair badly either.
"There's a lot of momentum behind this cyclical rally," said one block trader. "Everyone is trying to short these things. At the end of the day, everyone expects
the rally to crater. It's not happening. This thing has more legs than anyone is giving it credit for."
And for those of you wondering if our block-trading friend joined his retail brethren sculling brew last night, he has this to say: "In the listed world, we don't have time for mindless frivolity -- just churning orders and writing tickets."
At 9 a.m. EDT, the
futures were up 10.1, better than 8 above fair value and indicating a nice bump at the open. The 30-year Treasury bond was down 8/32 to 95 22/32, lifting the yield to 5.55%.
Though there are glimmers of hope, it would be wrong to say the Japanese economy is back on course. Tokyo traders were reminded of that today with the release of March employment figures. The unemployment rate climbed to 4.8% -- and remember that most economists reckon that if Japanese employment data were tallied in the same way as they are in the U.S., unemployment numbers would be significantly higher.
With volume low for
holidays and Prime Minister
meeting with President
coming up on Monday, there was already a lot of caution in the market. The
dropped 240.71, or 1.4%, to 16,701.53.
Hong Kong stocks gained ground on speculation -- well founded, as it turned out -- that the
Hong Kong Bank Association
would cut interbank rates after the close. The
gained gained 153.50, or 1.2%, to 13,333.20. The HKBA cut its benchmark rate to 3.5% from 3.75%.
European stocks were solid. In Frankfurt, the
was up 50.7 to 5384.49. In Paris, the
was up 38.78 to 4410.31. And in London, the
was up 50.8 to 6548.4.
Friday's Wake-Up Watchlist
has offered to buy the rest of
, Argentina's largest oil company, for $13.4 billion. In January, Repsol bought a 14.99% stake in YPF for $2 billion.
has entered into confidentiality agreements with both
, paving the way for MediaOne to separately discuss new merger deals with each of them,
The Wall Street Journal
, citing people familiar with the matter, reported that both agreements were entered into with the approval of
, which is trying to save its $48 billion bid to take over MediaOne.
In other news (earnings estimates from
board approved a 3-for-1 stock split.
yesterday forecast its fiscal fourth-quarter earnings will be 83 cents a share, 2 cents ahead of the 25-analyst consensus.
North America's largest farm equipment maker,
, yesterday warned it sees second-quarter sales volume falling 20% below year-ago levels and full-year sales falling 18% to 20%.
Delta Air Lines
, Ireland's state-owned airline, have ended their codeshare relationship. Yesterday, Aer Lingus' board recommended to the Irish government that Aer Lingus join the
alliance, which includes
to neutral from buy.
3M reported first-quarter earnings of 95 cents a share, 4 cents ahead of the nine-analyst estimate, but down from the year-ago 98 cents. 3M's first-quarter earnings totaled $384 million down from the year-ago $400 million. Currency effects sliced earnings for the quarter by 2 cents a share, 3M said. Results were positively affected by an improvement in sales in the Asia Pacific region, solid productivity gains and growth in several of its U.S. businesses, and negatively impacted by the poor Brazilian economic situation and the strength of the dollar, the company said.
Nationwide Financial Services
to buy from attractive.
announced yesterday it has discovered a method to cut certain tobacco compounds some scientists believe cause cancer.
The St. Paul Cos.
posted operating earnings of 62 cents a share, a penny shy of the 14-analyst estimate and down from the year-ago 64 cents.
to attractive from buy.
Donaldson Lufkin & Jenrette
to market perform from buy.
This week's Inside Wall Street column in
reports that Joseph Battipaglia, chairman of investment policy at
, says if investors think foreign economies are on their way back, particularly in Asia and Latin America, large transport stocks will be the best bets among cyclical stocks. As economies improve, U.S. transport companies will get an increase in passenger and goods traffic, Battipaglia says, according to the column. He thinks
will be among the winners, the column says.
, the world's largest financial printer, has turned into a "fascinating and undervalued stock," worth twice its current price of $17, says money manager David Rocker of
, according to the column. Rocker says Bowne, is pondering ways to enhance shareholder value, including taking public all or part of its new businesses, the column says.
Dennis McAlpine, an analyst at
is an attractive buyout candidate, the column says.