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by 10/16/2000 11:22 AM
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Brokerage titan Merrill Lynch (MER 57-3/16) is castigating some of its peers today, announcing a series of earnings estimate reductions shortly before the open. The firm reduced its 2000 and 2001 earnings estimates for Goldman Sachs Group (GS 100-1/4), Lehman Brothers Holdings (LEH 118-7/8), and Morgan Stanley Dean Witter (MWD 77-5/16). Additionally, MER cut its earnings estimate for Citigroup (C 49-11/16) for 2001 only.

MER's 2000 earnings estimate for GS was reduced from $6.45 to $6.20, while its 2001 estimate fell from $6.65 to $6.30. For LEH, MER trimmed its 2000 estimates from $13.10 to $12.65, and 2001 earnings are now expected at $12.05 rather than $12.50. MWD saw its 2000 earnings expectations fall from $5.10 to $4.95, while 2001 earnings were reduced to $4.70 from $4.80. For C, MER nudged its expectations lower from $3.10 to $3.05 (all numbers indicated are on a per-share, full-year basis).

All four downgraded names are trading lower today, albeit slightly.

by 10/16/2000 11:21 AM
Stocks quoted in this article:
Photographic equipment manufacturer Polaroid (PRD 8-15/16) has fallen over 22 percent today after issuing a negative earnings surprise. Before the open today, the company announced third-quarter results of 40 cents per share, a far cry from the Street's expectations of 54 cents per share. PRD's CEO added fuel to the equity's downward bias, saying that fourth-quarter earnings would likely be unchanged compared to last year.

PRD has subsequently recorded a low of 8-1/2 today, the lowest point the shares have achieved in over 15 years. In September, the shares breached the 17 level, a significant region of technical support. This area offered support to the equity in October 1987 and throughout 1999 and 2000. Needless to say, the security is sitting beneath all of its short-term and long-term moving averages. <

by 10/16/2000 11:20 AM
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The AMEX Biotechnology Index (BTK 691.9) has stepped up by nearly 17 points, or more than two percent, so far today. This upswing has lifted the index back above its 10-day moving average, a trendline it hasn't finished a session above since September 29. The BTK is also presently perched right on its 20-week moving average.

Top index performers this morning include Human Genome Sciences (HGSI 89-1/8), up nine percent; Bio-Technology General (BTGC 10-5/16), up 8.2 percent; and IDEC Pharmaceuticals (IDPH 169-15/16), up 4.4 percent. HGSI announced that SmithKline Beecham (SBH 64-9/16) exercised its first option to jointly develop and commercialize repifermin, a protein with several potential therapeutic applications.

by 10/16/2000 11:18 AM
Stocks quoted in this article:
Qualcomm (QCOM 74-5/8) has gained over six percent in mid-morning trading following reports that China's second-largest mobile phone company will build a wireless network using QCOM's wireless technology. In response, the security is trading back above its 20-day moving average and is sitting right on its 20-month trendline

In QCOM's options pit this morning, 1,447 and 1,728 contracts have crossed the tape on the out-of-the-money October 75 and 80 calls, respectively. The October 75 call has open interest of 17,980 contracts, while open interest on the October 80 call stands at 14,985 contracts.


by 10/16/2000 9:21 AM
Stocks quoted in this article:
Chevron (CHV 84-1/4) has agreed to buy rival oil company Texaco (TX 55-1/8) for $45.4 billion in stock and assumed debt. In addition, it was announced that TX may need to exit its refining ventures with Royal Dutch Petroleum's (RD 62-3/4) Shell Oil Company in order to gain clearance of its merger with CHV.

CHV and TX both finished Friday's trading lower by more than three percent. CHV dipped back below its 10-day and 20-day moving averages, while TX moved back beneath its 20-month moving average.

Information from Schaeffer's Daily Sentiment shows that pessimism has been growing toward CHV. On September 19, Schaeffer's put/call open interest ratio (SOIR) on the stock was 0.16, which is significantly less than its current reading of 0.45. As for TX, its SOIR has declined from 0.76 on October 6 to its present 0.55 mark, indicating that optimism toward the shares is on the rise.


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