Edited by Paul Vigna Of DOW JONES NEWSWIRES (call: 201-938-5172; e-mail: paul.vigna@dowjones.com) MARKET TALK can be found using N/DJMT
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2:13 (Dow Jones) Worry that credit-market problems will trip up the globaleconomy are misplaced, says Michel Peretie, Bear Stearns's CEO for Asia and Europe. BSC, of course, has had a starring role in the debt drama. But Peretieargues that what's happening now "is not contagion...The market was showingexcess in the subprime and leveraged buyout markets." All of which is not to saythat business has been a picnic for Bear lately. The firm is trying to expandits reach in Asia, and Peretie acknowledged its well-publicized problems havemade that harder. "We are dealing with a reputational issue, which is never easyto do," he says. (TA) (http://blogs.wsj.com/marketbeat/2007/08/02/q-are-we-not-men-a-we-are-nyse/)
1:57 (Dow Jones) The tug of war between bulls and bears has created a veryvolatile market, and is a good indication the technical pullback is near itsend, says Peter Cardillo, chief market economist at Avalon Partners. "Wereiterate, that the fundamentals of the stock market remain positive, as USeconomic growth is on track to support earnings growth," Cardillo writes. Heexpects the market to stick inside a trading range, "as investors calm theirnerves and sanity is restored." (PJV)
1:45 (Dow Jones) Treasurys reverse course again after a brief blip on subprimeand credit worries, with prices pushing lower again across the board. The 2-yearnote is off 3/32 at 4.60% and the 10-year is down 5/32 to yield 4.78%. Stocksalso gaining again; DJIA up 54. (DLB)
1:43 (Dow Jones) US stocks get a little shaky just before 1 p.m. ET, afterheadlines about the $10B bond sale to finance the Chrysler buyout getting pushedback 2-3 months. The DJIA fell to nearly its opening level, but indexes are nowcoming back. Most sectors still positive, with utlities, tech and health carethe strongest. Advancers up on decliners on the Big Board. IBM, Honeywell,Hewlett-Packard leading the DJIA higher; Exxon, down $2, the biggest decliner.DJIA up 43, Nasdaq Comp up 12, S&P 500 up less than 1. (PJV)
1:36 (Dow Jones) S&P's equity research unit downgrades Lehman Brothers (LEH)to sell from hold. "We believe LEH may be forced to write down a larger portionof its mortgage-related positions given recent market trends, although we notehedging positions may mitigate some losses," analyst Matthew Albrecht writes. "We are also concerned with the rising amount of high-yield bridge loancommitments outstanding that it may be forced to extend, as well as adeteriorating M&A environment." He keeps '07 EPS estimate at $8.08 but slashestarget price by $15 to $55. LEH down 1.3% at $60.02. (JED)
1:28 (Dow Jones) New York-traded emerging-market shares dodges morningdownward pressure to hold on to gains. Bank of New York's Emerging Market ADRindex up 0.4% at 316, with BoNY's Latin America index up 0.9%. Asian ADRs stilldown; BoNY's Asia index retreats 0.5%. (CSS)
1:27 (Dow Jones) Stock index futures pull back from the day's highs, with SeptS&P's returning to near unchanged levels after midday. Better-than-forecastearnings and easing of subprime concerns were credited for early session gains.Sept S&P's dipped below the 200-day moving average of 1476.70, having surpassedthat level earlier. Recently trading at 1470.20, up 0.3 points, off the high of1479.80. Sept Nasdaq off its high of 1977.00. Recently at 1965.00, up 4.5. SeptDJIA last at 13425, up 21, off the high of 13460. (HLP)
1:18 (Dow Jones) US stocks continue to bounce around, though the majoraverages have managed to maintain a mostly positive tone so far, with anoccasional downdraft keeping gains in check. Energy stocks are particularlyweak, followed by materials and chips. Strength in Honeywell, IBM and H-P shareshelp sustain Dow Industrials gains. DJIA up 25; Nasdaq ahead 8; S&P 500 off 1. (JHS)
1:06 (Dow Jones) Think anybody still believes Lone Star's going to pay $15.10/share for Accredited Home Lenders (LEND)? Shares are down a steep 40% thismorning, last at $5.09, after the company warned it may be forced out ofbusiness. That's quite a precipitous drop for a stock that was at $60 last May.Lone Star declined to comment, and LEND hadn't yet returned calls seekingcomment. But clearly the market doesn't expect the deal to get done at $15, oranywhere near it. And they shouldn't. (PJV)
12:53 (Dow Jones) Advanced Medical Optics (EYE) doesn't expect confusion whenit hits stores with "Complete" branded contact lens solution, to replace "Complete MoisturePlus," which was yanked due to infection links. New launch willhave different box and label, doctors are aware of difference and new box willtell people to rub and rinse lenses - a departure from old "no rub" label. "Ithink it's going to be a clear differentiation," says Richard Meier, EYE's CFOand COO, on analyst call. Health regulators are concerned people are still usingold product and don't know it's been recalled. EYE up 4.7% to $31.98. (JDK)
12:42 (Dow Jones) Bally's (BFTH) Chapter 11 filing may signal it's time forbankruptcy lawyers and bankers to get in shape, Deal Journal writes. The filing,which came after the company lost control of an $800M debt load, punctuates ahistoric period of quiet in corporate defaults. But with the leveraged-lendingmarkets suddenly turning nasty, the case could mark a turning point. Companiessuch as Bally could end up victims of the very lending practices that havesustained them of late, as the enormous backlog of private-equity loans bigbanks such as Citigroup and JPMorgan have on their books may turn off the loanspigot to companies that simply need cheap funding to stay in business. (DC) (http://blogs.wsj.com/deals/2007/08/02/ballys-gets-caught-up-in-loan-market-clampdown/)
12:34 (Dow Jones) Gold and silver directionless ahead of tomorrow's employmentreport, with equities relatively steady and US dollar not seeing a big moveagainst the euro, says Dave Rinehimer, director of futures research at CitigroupGlobal Markets. Comex Dec gold up 40c at $676.30; Sep silver up 7c at $13.025. "We might just chop around here today ahead of that number," Rinehimer says. (MWH)
(END) Dow Jones Newswires 08-02-07 1413ET Copyright (c) 2007 Dow Jones & Company, Inc.
