Stocks Stand Still

Stocks Stand Still

Friday, December 10, 1:00 PM EST: Stocks are flat to lower at midday, consolidating at the end of a mostly volatile week. Strong gains in the prior weeks, mixed economic data and a pledge by OPEC to cut output are restraining the bidding, although upbeat company developments in the industrial sector are luring some buyers. Except for industrials, most other major sectors are declining. Treasury prices are climbing.

* The Nasdaq Composite Index is down 1.85 to 2127.16, while the Dow Jones
Industrial Average is shedding 2.94 to 10549.88. The S&P 500 Index is
dipping 0.79 to 1188.45. The 10-year Treasury note is up 7/32, yielding
4.15%.

* Topping corporate headlines, telecom shares are in focus following
reports yesterday that Sprint and Nextel Communications are discussing
a possible merger. A deal would create a wireless carrier with about
39 million customers, rivaling the scale of the two dominant players,
Cingular Wireless and Verizon Wireless. While Sprint is higher, Nextel
is falling at midday. Overall, telecom shares are declining.

* Industrial shares are providing support, thanks to strength in
aerospace and defense issues. General Electric upped its quarterly
dividend to $0.22 a share from $0.20 a share and is planning to buy
back $15 billion in stock over the next three years. Also, United
Technologies is rising after saying it remains comfortable with analyst
estimates for 2004 earnings of $5.50 per share. The company also
expects 2005 earnings between $6.05 and $6.30 a share, excluding
certain expenses. That compares with Wall Street estimates of $6.14 a
share.

* Tech shares are dipping on profit-taking. Research is mixed on the
group today. Of note, Advanced Micro Devices is choppy after UBS cut
the stock to "reduce" from "neutral," citing expectations that tighter
competition with Intel will limit the company's valuation. Also,
chipmaker Nvidia is gaining after receiving an upgrade from Thomas
Weisel to "outperform" from "peer perform," due in part to an improved
margin outlook and new opportunities in Intel chipsets. Further, Ciena
is climbing after Credit Suisse First Boston upgraded the stock to
"neutral" from "underperform," citing the company's strong fourth-
quarter operating performance. Also, Finisar is advancing after its
second-quarter loss narrowed from a year earlier and beat analyst
estimates.

* Among healthcare issues, Martek Biosciences saw its earnings surge to
$1.16 a share in the fourth quarter from last year's $0.21 a share, as
sales increased 54% to $59.7 million. The issue is rising. Meanwhile,
Pfizer is dipping after the Food and Drug Administration late yesterday
said it approved a new label for the company's arthritis pain drug
Bextra that adds a warning about potential heart and blood-clotting
problems in patients who recently had coronary artery bypass graft
surgery. In M&A developments, The Wall Street Journal reported that
Johnson & Johnson is close to an agreement to buy medical device maker
Guidant for about $24 billion in cash and stock.

* The cyclical sector is lower, in line with the broader market, and with
auto-parts stocks falling the most. Delphi Corp. is lower after saying
it plans to cut 8,500 jobs as part of its restructuring plans. The auto
parts maker also cut its fourth-quarter outlook due to low global
production volumes and higher commodity prices. However, homebuilders
such as Hovnanian Enterprises and Lennar are climbing on a bullish note
from Banc of America.

* Turning to staples, Winn-Dixie Stores is climbing after ousting its
president and chief executive and replacing him with a former executive
from rival Albertson's.

* On the economic front, the producer price index rose 0.5% in November,
down from a 1.7% increase in October. The core index, which excludes
food and energy items, rose 0.2%, down from a 0.3% increase in October.
Analysts had forecast a 0.1% increase in the overall index and a 0.2%
gain in core prices. The University of Michigan's consumer sentiment
index rose to 95.7 in December from 92.8 in November, topping
expectations for an increase to 93.2.

-- Beatrice.Denis@thomson.com; Thomson Financial Corporate Group



This is Thomson Financial's Market Commentary, which is issued four times daily; Pre-Open (9:00 a.m.), Post-Open (10:15 a.m.), Afternoon (1:00 p.m.) and Close (5:00 p.m.). The information herein is believed to be true and accurate. We take no responsibility for inaccurate information and reserve the right to update our reports. If you have any questions please e-mail James Sang at james.sang@tfn.com or call 646.822.6233. For more information about Thomson Financial visit us on-line at http://www.thomsonfinancial.com/. For more financial information at your fingertips, please visit http://www.irchannel.com/.

PRNewswire -- Dec. 10


Source: Thomson Financial Corporate Group

Web site: http://www.thomsonfinancial.com/
http://www.irchannel.com/


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