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[madrose1]

Europe optical network spending set to grow-study

SAN FRANCISCO, July 9 (Reuters) - Spending by European
telecom carriers on optical equipment will more than double to
$6.3 billion over the next four years to meet growing demand
for broadband connections, according to a report on Tuesday.
Of that spending, European carriers and service providers
will nearly triple investments in network routers and switches
between this year and 2006 to $4.5 billion, according to the
report by research firm Infonetics Research Inc.
The report provided a glimmer of hope for network equipment
makers, some of the most battered technology companies. Their
revenues and shares have plunged as carrier financial troubles
mounted, leading to sharply reduced spending on equipment in
the bigger U.S. market.
The American Stock Exchange Network Index <.NWX> on Tuesday
closed at 142.71, down 90 percent from its all-time high of
1,401.26 on Sept. 1, 2000.
No. 2 Internet router maker Juniper Networks Inc. <JNPR.O>,
for instance, relies heavily on carriers for sales and its
shares have dropped 74 percent over the past 52 weeks.
Juniper reports second-quarter results on Thursday.
Analysts, on average, expect revenues of $109.6 million -- down
46 percent from $202.2 million a year earlier, according to
research firm Thomson First Call.
Kevin Mitchell, directing analyst for Infonetics, cautioned
that the forecast only projects growth starting in 2003.
"It's not rosy in the immediate future," he said.
Longer-term, however, European carriers need to get more
traffic on and revenue from their underused long-distance
networks, Mitchell said.
That makes the "metro market," where households and
businesses link to broadband networks the "bright spot" in
Europe for network gear sales, said Richard Webb, European
market analyst with Infonetics.
Among the services European consumers and businesses will
be pitched: Virtual private networks, network storage and
security, voice-over-Internet protocol and wireless data access
and management, Mitchell said.
((Jim Christie, San Francisco bureau, 415-677-2539,
[e-mail]))
REUTERS
*** end of story ***

[madrose1]

U.S. says to back Brazil through economic problems

BRASILIA, Brazil, July 9 (Reuters) - The United States
"would do whatever is necessary," to help Brazil out of
economic troubles that are roiling the country, a senior U.S.
official said on Tuesday amid talk the country is seeking IMF
cash.
"I wouldn't want to speculate about what needs Brazil would
have in the future," Otto Reich, U.S. assistant secretary of
state for Western Hemisphere affairs, told reporters during a
press conference at the U.S. embassy. "But we would do whatever
is necessary to help Brazil, certainly out of a problem not of
its own doing."
Reich's comments were made after being asked if the United
States would back a possible extension of a loan with the
International Monetary Fund, which expires at year-end. The
U.S. official met with senior Brazilian government officials on
Monday and Tuesday.
The Brazilian government has denied it is seeking such a
loan to replace the current one of more than $15 billion,
despite reports by local media.
The loan would be intended to help Brazil overcome a loss
of investor confidence caused by uncertainty about the outcome
of the October presidential elections, which has sent the local
real currency to record lows against the dollar.
"We are confident about the fundamentals of the Brazilian
economy. We think they have an excellent economic team,
political leadership and it is a friend," Reich said.
The United States is the largest and most influential member
of the IMF's decision making executive board, so winning U.S.
support is important for securing an extension to the IMF loan.
((Brasilia Newsroom, [phone], [e-mail]))

REUTERS
*** end of story ***

[madrose1]

WEEK AHEAD-U.S. retail sales and grim equities in focus

By Oliver Bullough

LONDON, July 8 (Reuters) - Financial markets are looking to U.S. retail sales data due this week for evidence of a sustained economic upturn, but analysts say the figures will be overshadowed by the performance of nervous stocks.
ADVERTISEMENT



They said that with the focus firmly on equity markets, even positive data this week could have limited impact.

"There's nothing there other than (U.S.) retail sales, and even if you get a strong figure, the market's not going to believe only one month," said David Brown, chief European economist at Bear Stearns.

U.S. June retail sales are due to be released on Friday at 1230 GMT. A Reuters poll showed analysts expected them to grow by 0.7 percent after falling 0.9 percent in May. Excluding autos, sales are expected to have risen 0.5 percent after a 0.4 percent fall in May.

"Retail sales have been the saving grace of the economy. The big question is whether we've got an erosion of consumer confidence and retail sales from the weakness in the stock markets," said Jim Webber, chief economist at TD Securities.

Equity markets took some massive hits on both sides of the Atlantic last week, with the S&P 500 index hitting four-and-a-half year lows on worries over fresh accounting scandals and a slower than expected U.S. economic recovery.

"The major focus for the markets is the continuing stock market struggle, and the tug-of-war between equities and debt. They're like pieces of elastic -- stocks are massively oversold, and debt is overbought," said Brown.

Friday is also set to see the release of the Michigan sentiment survey for July, due at 1345 GMT. A Reuters survey sees the index rising to 92.8 from 92.4.

But Webber said the markets were beginning to pin hopes of economic growth on the euro zone, so German industrial production figures for May released at 0600 GMT on Tuesday would provide a major focus.

French industrial production figures, due to be published on Friday at 0640 GMT would also be important.

"Any further signs of weakness would get people thinking that the European Central Bank won't raise rates any time soon," he said.

"Germany's the one we're most worried about because the EFO has been all over the place," he added.

Elsewhere in the euro zone, the ECB is due to release its monthly bulletin on Thursday at 0800 GMT. On Tuesday, German June unemployment figures are scheduled for 0750 GMT, but analysts say this has more significance for the forthcoming election than for the markets.

Also on Tuesday, Germany's ZEW institute is due to release its economic expectations indicator at 1300 GMT.

Strong data from the euro zone could boost the euro back towards the $0.9990 level it hit on June 28.

"As far as the euro's concerned at the moment, the directional skew is towards a test of parity," said Brown.

Outside the euro zone, analysts said traders would be watching Wednesday's British May industrial production figures, released at 0830 GMT.

"If industrial production shows UK manufacturing is coming out of the doldrums it could be a factor in favour of the Bank of England tightening rates on August 1," said Brown.

Most analysts expect a rise in production for the second successive month.

[madrose1]

Tokyo stocks end down, strong yen weighs

(Updates to close)
TOKYO, July 8 (Reuters) - Tokyo stocks reversed early gains
to close lower on Monday, with a stronger yen weighing on
exporters while investors cashed in profits on tech shares such
as Tokyo Electron Ltd <8035.T> after the Nikkei hit 11,000 in the
morning session.
Chip equipment manufacturer Tokyo Electron eked out a 0.27
percent gain to 7,540 yen, falling back heavily from a climb to
7,790 in early morning.
The benchmark Nikkei average <.N225> fell 0.53 percent or
56.89 points to 10,769.20, while the capital-weighted TOPIX index
<.TOPX> lost 0.86 percent to 1,033.99.
"When we hit 11,000 traders decided we'd reached the summit
and cashed in their gains on tech shares," said Koichi Kawata,
deputy head of the equity department at Sakura Friend Securities.
Earlier, the Nikkei shot up two percent to clamber above the
key 11,000 mark for the first time since June 14, but a round of
profit-taking and unwinding of cross-held shares by banks and
corporations knocked it back down, traders said.
A strengthening of the yen also weighed, as the dollar
weakened to around 118.95 yen in afternoon trade.
Blue-chip exporters under pressure from the yen included top
automaker Toyota Motor Corp <7203.T>, which shed 1.95 percent to
3,020, and office equipment maker Ricoh Co Ltd <7752.T>, down
1.39 percent at 2,135 yen.
In the telecom sector, dominant mobile carrier NTT DoCoMo
<9437.T> shed 3.56 percent to 271,000 yen, while Japan's
second-largest telecoms firm, KDDI Corp <9433.T>, fell 2.45
percent to 359,000 yen.
Banks also felt the heat, with the world's largest bank by
assets, Mizuho Holdings Inc <8305.T>, shedding 2.41 percent to
284,000. The banking sector subindex <.IBNKS.T> fell 1.74
percent.
In contrast, chip-related shares were solid after a nine
percent surge on Friday in Philadelphia's semiconductor index
<.SOXX>. Japan's leading chipmaker Toshiba Corp <6502.T> rose 2.0
percent to 510 yen.
((David McMahon, Tokyo Equities Desk [phone]
[e-mail]))
($1=120.10 Yen)
REUTERS

[madrose1]

GILD : 48-Week Data Compare Viread to Stavudine When Used as Part of Patients' First
Anti-HIV Regimen; Data Presented at XIV International AIDS Conference in
Barcelona


Business Editors/Health & Medical Writers

BARCELONA, Spain--(BUSINESS WIRE)--July 8, 2002--Gilead Sciences,
Inc. (Nasdaq:GILD) today reported 48-week results from an ongoing
Phase III clinical trial (Study 903) comparing Viread(TM) (tenofovir
disoproxil fumarate) in terms of efficacy and safety to stavudine
(d4T) when used as part of a first-line treatment regimen in HIV
patients. The data will be presented by Schlomo Staszewski, M.D.,
University Hospital, J.W. Goethe-Universitat, Frankfurt, Germany in
the late-breaker session (presentation #LbOr17) on Friday, July 12 at
the XIV International AIDS Conference in Barcelona, Spain. These are
the first data from a large, controlled trial on the use of Viread in
patients who have not previously received antiretroviral medications.
This presentation is one of 16 Viread abstracts to be featured at the
conference.
The U.S. Food and Drug Administration approved Viread for
marketing in October 2001 and the European Commission granted approval
in February 2002. Summary results from Study 903 were announced in a
press release in May 2002.
"Data from this large study in treatment-naive patients
demonstrate Viread is associated with potent anti-HIV activity and is
well-tolerated," said Dr. Staszewski, a lead investigator for the
study. "Importantly, analyses of measurements of laboratory markers
reveal that patients in the stavudine arm of the study experienced
significant increases in triglyceride and cholesterol levels compared
to those in the Viread arm through 48 weeks. These are important data
for clinicians to consider as they design an antiretroviral regimen
for the long-term management of their patients."
"The data from this study support the use of Viread as part of a
patient's first-line regimen, and should give physicians increased
confidence in their ability to strategically construct effective,
tolerable regimens that do not include a thymidine analogue drug such
as AZT or d4T -- perhaps the next standard that we will see emerge in
the treatment of HIV infection," Dr. Staszewski continued.

Study Design

Study 903 is a three-year, randomized, double-blind,
active-controlled clinical trial being conducted at 81 sites in the
United States, Europe and South America. The trial was designed to
compare the efficacy and safety of a treatment regimen of Viread,
lamivudine (3TC) and efavirenz to a regimen of stavudine, 3TC and
efavirenz in 600 antiretroviral-naive patients with HIV infection. To
maintain the blinded nature of the study, patients in the Viread arm
received one tablet, twice daily of stavudine placebo while patients
in the stavudine arm received one tablet, once daily of Viread
placebo. Treatment assignments will remain blinded to patients and
their physicians through 144 weeks.
The primary efficacy endpoint of the study is the proportion of
patients in each arm achieving HIV RNA suppression below 400 copies/mL
at week 48. Additional efficacy endpoints include the proportion of
patients in each study arm who achieve viral suppression below 50
copies/mL at week 48, as well as increases in CD4 cell count.

Study Results

At baseline, the mean HIV RNA for the intent-to-treat (ITT)
population was 4.9 log10 copies/mL and the mean CD4 cell count was 279
cells/mm3. The mean age of the study population was 36 years at the
time of enrollment, with 24 percent of patients female and 64 percent
Caucasian.
In the analysis of the ITT population, in which missing data are
counted as failures, an identical 87 percent of patients in the Viread
arm (n=299) and the stavudine arm (n=301) achieved suppression of HIV
RNA below 400 copies/mL following 48 weeks of treatment (95 percent
confidence interval (CI): -6 percent, +5 percent). When missing data
are excluded, 95 percent of patients receiving Viread compared to 96
percent of patients receiving stavudine had reductions in HIV RNA to
below 400 copies/mL (95 percent CI: -4 percent, +2 percent).
The proportion of patients achieving HIV RNA suppression below 50
copies/mL also was evaluated in the study. In the missing equals
failure analysis, 82 percent of patients in the Viread arm compared to
81 percent of patients in the stavudine arm achieved this result (95
percent CI: -6 percent, +6 percent). When missing data are excluded,
90 percent of patients in the Viread arm compared to 89 percent in the
stavudine arm had reductions in HIV RNA to below 50 copies/mL (95
percent CI: -4 percent, +5 percent).
Additionally, the mean reduction in HIV RNA for both treatment
groups was 3.09 log10 copies/mL. At 48 weeks, combination treatment
including Viread was associated with a mean increase from baseline in
CD4 cells of 169 cells/mm3 and treatment including stavudine was
associated with a mean increase from baseline of 167 cells/mm3.

Evaluation of Safety Parameters

In each treatment group, therapy was generally well tolerated and
the study discontinuation rate was nine percent. As a result of
adverse events, one percent of patients in both the Viread arm and
stavudine arm discontinued participation in the study. The incidence
of grade 3/4 adverse events in the Viread-containing study arm was 19
percent compared to 17 percent in the stavudine-containing study arm.
The incidence of grade 3/4 laboratory abnormalities in the Viread arm
was 28 percent compared to 31 percent in the stavudine arm.
Of the laboratory markers evaluated, a statistically significant
difference was seen between the two treatment arms in changes in
triglycerides and cholesterol levels. Patients receiving Viread
(n=242) had no mean change from baseline in triglycerides, compared to
an increase of 74 mg/dL for patients in the stavudine arm (n=253; p
less than 0.001). Increases in cholesterol levels for patients
receiving Viread and stavudine were 25 mg/dL and 53 mg/dL,
respectively (p less than 0.001). In addition, the incidence of
mitochondrial-associated toxicities in the Viread-containing arm was
three percent, compared to eleven percent in the stavudine-containing
arm.
"The results of this study, along with data discussed in the
additional abstracts to be presented this week, continue to suggest
that Viread may provide a potent and safe therapeutic option for HIV
patients across the spectrum of treatment stages," commented John C.
Martin, Ph.D., President and Chief Executive Officer, Gilead Sciences.
"We are particularly interested in the data that suggest a lower
incidence of lipid abnormalities for patients treated with Viread, as
compared to stavudine. We will continue to monitor both study groups
for an additional two years in a blinded fashion to best evaluate how
these data impact patients and the long-term success of their
therapy."

About Viread

Viread is the first nucleotide analogue reverse transcriptase
inhibitor (NtRTI) approved for the treatment of HIV in the United
States and Europe. It was approved in the United States in October
2001 and was approved in the European Union in February 2002. In
clinical trials and expanded access programs, approximately 10,000
patients have been treated with Viread alone or in combination with
other antiretroviral products for periods up to three years. The drug
works by blocking reverse transcriptase, an enzyme involved in the
replication of HIV. The approved dose of Viread for the treatment of
HIV infection is 300 mg once daily taken orally with a meal.
In the United States, Viread is indicated for use in combination
with other antiretroviral agents for the treatment of HIV-1 infection.
This indication is based on analyses of plasma HIV-1 RNA levels and
CD4 cell counts in a controlled study of Viread of 24 weeks duration
and in a controlled, dose-ranging study of Viread of 48 weeks
duration. Both studies were conducted in treatment-experienced adults
with evidence of HIV-1 viral replication despite ongoing
antiretroviral therapy. Studies in antiretroviral-naive patients are
ongoing; consequently, the risk-benefit ratio for this population has
yet to be determined.
Viread is approved in Europe for use in combination with other
antiretroviral agents for the treatment of HIV infection in patients
who are experiencing early virological failure.

Safety Profile

Assessment of adverse reactions is based on two studies (902 and
907) in which 653 treatment-experienced patients received treatment
with Viread 300 mg (n=443) or placebo (n=210) for 24 weeks followed by
extended treatment with the drug. Adverse event rates in the Viread
group were similar to those in the placebo-treated patients.
The most common adverse events in patients receiving Viread were
mild to moderate gastrointestinal events, such as nausea, diarrhea,
vomiting and flatulence. Laboratory abnormalities observed in clinical
studies occurred with similar frequency in the Viread and
placebo-treated groups. Lactic acidosis and severe hepatomegaly with
steatosis, including fatal cases, have been reported with the use of
nucleoside analogues alone or in combination with other
antiretrovirals.

About HIV/AIDS

More than 920,000 Americans and 560,000 Europeans are infected
with HIV, the virus that causes acquired immunodeficiency syndrome
(AIDS). Each year, approximately 560,000 U.S. and European patients
receive anti-HIV treatment regimens. Globally, it is estimated that 40
million individuals are living with HIV. Treatment with antiretroviral
agents is crucial to control viral load and delay the emergence of the
debilitating AIDS-defining events.

About Gilead Sciences

Gilead Sciences is a biopharmaceutical company that discovers,
develops and commercializes therapeutics to advance the care of
patients suffering from life-threatening diseases worldwide. The
company has five marketed products and focuses its research and
clinical programs on anti-infectives, including antivirals,
antifungals and antibacterials. Headquartered in Foster City, CA,
Gilead has operations in the United States, Europe and Australia.

This press release includes forward-looking statements, within the
meaning of the Private Securities Litigation Reform Act of 1995 that
are subject to risks, uncertainties and other factors that could cause
actual results to differ materially from those referred to in the
forward-looking statements. Such risks and uncertainties include the
risk that these 48-week data will not be observed through longer
treatment periods and uncertainty regarding inclusion of these data in
the Viread product label. The reader is cautioned not to rely on these
forward-looking statements. These and other risks are described in
detail in the Gilead Annual Report on Form 10-K for the year ended
December 31, 2001 and in Gilead's Quarterly Reports on Form 10-Q, all
of which are on file with the U.S. Securities and Exchange Commission.
All forward-looking statements are based on information currently
available to Gilead and Gilead assumes no obligation to update any
such forward-looking statements.

For complete prescribing information, please visit www.viread.com.

[madrose1]

Bush Readies Corporate Scandal Plan

WASHINGTON, Jul 07, 2002 (AP Online via COMTEX) -- Jailing crooked executives
and strengthening laws against corporate wrongdoing are needed to restore
Americans' confidence in big business, lawmakers said Sunday as they surveyed
the wreckage of companies such as Enron Corp. and WorldCom Inc.

The White House defended top market watchdog Harvey Pitt, the Securities and
Exchange Commission chairman, after Senate Majority Leader Tom Daschle called
for his ouster, saying Pitt was soft on the industry he regulates.

"We could do a lot better than Harvey Pitt in that position today," said
Daschle, D-S.D. White House press secretary Ari Fleischer, with the president in
Maine, said the SEC under Pitt has acted aggressively against wrongdoers and
that the charges against him were "without merit."

The drive for corporate change was taking center stage this week: a House
committee hearing Monday on WorldCom and President Bush's speech Tuesday to Wall
Street about his ideas for tougher penalties on corporate officials.

"Some of these corporate criminals need to go to jail," said Rep. Billy Tauzin,
chairman of the House Energy and Commerce Committee, which is investigating the
massive bankruptcies of energy trading giant Enron and the telecommunications
company Global Crossing.

"As soon as one of these major corporate leaders is indicted, confidence will
generally come back," Tauzin, R-La., told NBC's "Meet the Press."

Current and former WorldCom executives were summoned to appear Monday before the
House Financial Services Committee. The big telecommunications company is
battling to avoid bankruptcy since the recent disclosure that it disguised
nearly $4 billion in hidden expenses.

The committee chairman, Rep. Michael Oxley, said he thinks the corporate world
is placing too much emphasis on the bottom line, a drive for profits that can
lead companies to act irresponsibly.

"I don't think it's as widespread, perhaps, as some people would believe, but
clearly there's some real problems here," Oxley, R-Ohio, said on "Fox News
Sunday."

The SEC has filed a civil fraud suit against WorldCom, and the Nasdaq Stock
Market plans to delist the company's shares, which have plunged from more than
$64 to pennies.

"I think it's clear that particularly in the telecommunications sector ... that
some of these cost-cutting efforts and their cooking the books occurred to
basically hide what was a failing business practice," Oxley said.

Several lawmakers said sending corporate chiefs to jail for wrongdoing would
help restore public confidence in companies.

"As long as these people can walk away with millions of stock options, having
brought a company to bankruptcy, without going to a real jail, I think American
investors are going to be suspicious," Tauzin said.

Added Daschle: "We have to go after the bad actors. There has to be an
aggressive effort on the part of the Justice Department."

Bush's speech is intended to address the scandals and try to blunt their effect
on the economy.

"The overall message on Tuesday is that he's got confidence in the strength of
the overall economy and the confidence will grow as confidence is restored in
corporate behavior. Everyone is accountable," Fleischer said Sunday. "He will
focus on strict enforcement and tough punishment."

The president is expected to recommend new criminal penalties for corporate
officers who "cook the books" or lie on financial statements, something that
Bush "absolutely, absolutely" believes should draw jail time, Fleischer has
said.

But Sen. Paul Sarbanes, chairman of the Senate Banking Committee and sponsor of
legislation to tighten oversight of the accounting industry, said locking up
executives is not enough.

"All the focus is on making the bad actors pay a price, but what also ought to
happen is we ought to improve the system to prevent these things from
happening," Sarbanes, D-Md., said on ABC's "This Week."

Sen. Chuck Hagel, R-Neb., spoke of "a challenge here to not overreact, but to
deal with the problems that we can fix by law and by regulation. But you can't
regulate or legislate character and integrity."

A business leader who joined other executives in a private White House meeting
last month with Bush about the scandals said Sunday the president should condemn
corporate lawbreakers and those "who have violated the trust that they have been
given in these positions."

John Dillon, chief executive officer of International Paper Co. and chairman of
the Business Round Table, said the penalties "should be real, they should be
severe, they should be prompt. ... As CEOs of America's major corporations, this
is appalling to us. Trust is one of the greatest things that we have been vested
with. And what we have seen in a few but too many instances is violation of this
trust."

To Daschle, SEC Chairman Pitt is part of the problem.

"He has been the one who said we want a kinder and gentler SEC, just the
opposite of what we should have," Daschle said on CBS' "Face the Nation."

But Pitt, who represented Wall Street's big players as a private securities
lawyer before Bush named him last spring to head the agency, won votes of
confidence from the White House and Oxley.

"The president believes that Harvey Pitt is doing a great job," White House
spokeswoman Claire Buchan. Oxley said he had "nothing but faith in Harvey's
abilities and integrity."


By JESSE J. HOLLAND
Associated Press Writer

[madrose1]

Earnings Calendar
While there are no releases after the close today, next week kicks off earnings season with a slew of high-profile names: AA, DNA, YHOO, ABT, FDC, NET, THC, KRB, JNPR, ACN, and GE, among others.

[madrose1]

Barron's puts positive spin on optical sector
A Barron's article makes the positive case for the telecom equipment sector, focussing on cash-rich companies that will be able to ride out the downturn: Lucent (LU), Nortel (NT), Comverse (CMVT), Tellabs (TLAB), and Ciena (CIEN).

[madrose1]

IVX Ivax gets bullish article in Barron's (10.70)
Barron's discusses the problems that have hit IVX in the past year, but argues that if just a couple of its 35 applications for generics come through, the stock could recover.

[madrose1]

Jonathan Cohen turns bullish on some Internet stocks
Barron's discusses the views of former Merrill Lynch analyst Jonathan Cohen, who was a bear on internet stocks and lost his job to Henry Blodget; Cohen now runs a hedge fund and likes these internet stocks: United Online (UNTD 10.83), LendingTree (TREE 12.62), Register.com (RCOM 7.10), CyberSource (CYBS 2.02), FairMarket (FAIM 1.26); he also recommends shorting Yahoo (YHOO 13.62).

[madrose1]

ECLP Eclipsys gets a mention in Abelson column (7.42)
Alan Abelson's column in Barron's mentions this pick of hedge fund manager Chris Knowlton, who believes the recent pummeling of the stock after an earnings warning was overdone, and believes the stock could double.

[madrose1]

ECLP Eclipsys gets a mention in Abelson column (7.42)
Alan Abelson's column in Barron's mentions this pick of hedge fund manager Chris Knowlton, who believes the recent pummeling of the stock after an earnings warning was overdone, and believes the stock could double.

[madrose1]

Technology Trader column mentions bullish optical component view
The Barron's column discusses the views of a Bernstein analyst who believes that rising latency on telecom networks is a precursor to a pick-up in capital spending; mentions JDSU, AGR.A, and GLW.

[madrose1]

LXK Lexmark mentioned as possible Dell acquisition target in Barron's (52.30)
The Plugged In column discusses Michael Dell's recent comments about entering the printer business, and suggests that DELL might see LXK as an attractive acquisition target or perhaps as a business partner.

[madrose1]

CCMP Cabot Micro gets negative mention in Barron's (42.10)
The Technology Trader column in Barron's mentions the short-seller's case against Cabot: says that company's high margins in the slurry business is attracting competition, and that while chipmakers are not replacing CCMP on existing production processes, they are looking at the competition for new processes.

[madrose1]

Stop pop-up ads --->http://www.panicware.com/popupstopper.html

[madrose1]

Good Bear-Rally article:
http://www.zealllc.com/2002/massive.htm

[madrose1]

Dozens of Canadian fires send smoke into U.S.

MONTREAL, July 7 (Reuters) - Some 44 forest fires sparked
by lightning strikes burned in northern Quebec on Sunday while
winds pushed smoke over the U.S. border as far south as
Virginia, officials said.
More than 500 firefighters, some from Manitoba and
Newfoundland, were battling the blazes, said Eric Santerre, a
spokesman for the Forest Service.
With no rain expected before Thursday, more than a dozen
blazes burned out of control, said Santerre. One problem was
that water dropped from 18 aircraft being used to battle the
blazes was evaporating before it hit the ground, he said.
The fires burned 110,000 acres (44,000 hectares) in a week,
with some blazes devouring 165 feet (50 metres) a minute, the
Forest Service said.
A big fire near James Bay forced the evacuation of 135
people from the Chisasibi Indian village. Another 500 people
were evacuated on Friday from the village of Nemiscau while
500,000 homes were without power in Quebec for two hours.
Smoke from the fires blew over the U.S./Canada border,
through New York and well into Pennsylvania and even into
Virginia.
"The wind's been out of the north for several days and it
just keeps driving the smoke from these fires farther south,"
meteorologist Mark Tobin from the private Accu Weather Service
in State College, Pennsylvania, said in a telephone interview.
"Even me, I was sitting out on my deck last night, you
could actually smell the smoke a little bit and it was a little
irritating," he said.
The Pennsylvania Department of Environmental Protection
issued an air advisory for 20 counties in the eastern and
central part of the state because of the smoke.
((Americas desk 202-789-8015))
REUTERS
*** end of story

[madrose1]

John Mauldin's take on the housing market. IMO the HomeBuilders are topping out with many moving below the 20 and 50 ema. FNM, another tell, has also been weak. Large short interest in some of the names has lead to some good price movement both up and down. Short interest in RYL is 14%, TOL 29%, KBH 12% and LEN 15%. Some are plump with 80-90% gains in the last 6 months.

http://bigcharts.marketwatch.com/industry/bigcharts-com/focus.asp?bcind_ind=hom&bcind_sid=171546....

Joe
--------------------------------------------------
http://www.2000wave.com/home1/home1.html Excerpt:
This week I begin with a look at the housing market. I probably get
more questions on housing and real estate than on any topic, other
than stocks. I am going to try and do a quick analysis, and then let
that be the jumping off point for my economic predictions.

There has been much written about the fact that we are in a
potential housing bubble. Typical of the concern is that voiced by
Business Week: "Call it the double bubble. A housing bubble may be
developing--right behind the Nasdaq bubble.....In fact, falling
equities have led many well-heeled investors to shift money into
residential real estate. Robert J. Shiller, author of Irrational
Exuberance, which predicted the Nasdaq crash a year before it
happened, now warns that a psychological frenzy not unlike tech
mania is gripping housing. It appears that the Federal Reserve's
dramatic rate-cutting campaign to revive the economy may be
overheating housing."

Let's set the stage: The total price for all homes in America was
$6.6 trillion dollars in 1990. The collective value of homes rose by
another trillion over the next five years, and since then has
exploded to $12 trillion. There has been a rise of 20.9% in just the
last two years. (EIR)

We are spending more and more of our income on housing. The ratio of
after tax income to the total real estate valuation is at its
highest level in 50 years. Total outstanding mortgage debt is $5.7
trillion, or about one-half of total home value. 60% of today's
families cannot afford/qualify to buy an average home. By some
measures, it takes roughly twice the income to buy a house today as
it did 40 years ago.

The strong housing market gave homeowners a safe-haven during the
recent economic storms. For instance, the national average price of
an existing single-family home is now $192,400. A year ago, the
average was $179,500. For new single-family homes, the national
average price is now $226,800, while a year ago, it was $205,500.
The increases have created a sense of economic security, the so-
called wealth effect. (ABC News)

A Ceiling on Housing Prices

Let's look at what has led to the recent run-up in housing prices
and see whether that is sustainable.

First, one primary driver is lower mortgage rates. A drop of 2% in
mortgage rates lowers the monthly payment of a median house by
almost $300. Conversely, if a family can afford to make $1500
monthly payments, they can now buy "more" home for their monthly
payments. Mortgage rates have been dropping for over ten years. This
increases demand, and thus prices rise.

As noted above, people see housing as a safe investment. Many buy
"too much home" as a "forced" way to save money. Since homes have
risen in value, especially of late, this seems reasonable to the
average home buyer. Since for much of America, the bulk of their net
worth and the greatest increase in their net worth is in their
homes, it only makes sense to them to keep doing more of the same.

Demographics have led to rising values. There are more people
wanting to buy homes, and even though home building has stayed at a
feverish pace throughout the last recession, the supply of homes
available is still historically low.

Two other factors contributed significantly. Mortgage banks created
new classes of loans available to first time buyers and those with
problem credit histories. The number of people who can now qualify
for home loans has exploded. These families buy smaller homes which
cost less, thus driving up prices at the lower end of the market and
allowing those home owners who sold and now have large equity to
move up to a higher priced home. This is not a bad thing, but it is
a real driver on prices. Secondly, low unemployment levels have
fueled demand.

I believe most of these growth factors have run their course. Rates,
while they could drop some more (and I think they will at some
point), are not likely to drop another 2%. There is not much fuel
left in that engine. Demographics, while still positive, do not
suggest that demand will be as big in the future. There are no new
classes of potential borrowers on the horizon. We have made loans
available to almost anyone who can demonstrate economic viability.

But does this mean that like the Nasdaq we will see a bubble burst?
I don't think so, and for the following reasons.

First, a home is an altogether different type of asset than
Amazon.com or Cisco. We can live without the latter, but we all
have to have a place to hang our hats. While the demand for
Amazon.com stock is very elastic, the demand for housing is
universal.

Further, Amazon.com stock can be created quite easily, and for very
little real value. Homes are not created easily, and there is an
intrinsic replacement value to a home.

As our population increases, the demand for housing will increase as
well.

This is not to say that homes cannot fall in value. When and if in
some future time interest rates rise by 2-3%, you can bet home
values will drop. It is not inconceivable that prices could drop 10-
15% or more, as they have in the past because of rising interest
rates. But they are not likely to drop 50% in all but the most
doomsday scenarios. I think doomsday is quite unlikely.

But we may have reached the top in terms of significantly
compounding home prices. If homes were to rise in value by just 7%
per year (forget about 10%), in ten years that means the value of
our homes would double. If incomes were to grow at 3% a year, the
portion that we allocate to housing would have to rise by 50% to be
able to buy the same house.

That is fine if you buy your home today, lock in your mortgage rate
and watch your income rise over time. But when you go to sell in ten
years, a person who makes the same as you do would have to be
willing to spend a great deal more of his income to buy your home.
If your home cost you 25% of your income, your prospective buyer
would have to be willing to spend 37% of his income, or he would
have to make a lot more than you do.

On the average, that is not going to happen. (I will mention
exceptions below.) We are at an all-time high in the percentage of
our incomes we spend on housing. How much more can it grow? We are
also at all-time debt personal debt levels. We have just about
reached the end of the road.

I think growth in average home prices is going to be limited to
inflation plus growth in real income over the next decade, at best.
The key factor in the future growth of housing prices is going to be
affordability.

The next recession could bring about an altogether different result
in the housing markets as opposed to this last recession. Normally,
recessions cause home prices to drop, as more homes come on the
market, and there are fewer buyers. Those of us who live in Texas
experienced the pain of being in a regional recession and watching
our housing values drop significantly. It was not fun to bring a
check to the closing table in order to get someone to buy your home.

So, when you write and ask me if you should buy a home in (your
town), what do I say? I never answer that question. It all depends
upon local situations, and I don't know your local conditions. How
stable is the local employment? How well will your local economy
weather the next recession? Are people wanting to move to your town,
or is there a net drain of buyers? Is there reason to think local
businesses are likely to expand employment? How long do you want to
own your home? The longer you will stay in your home, assuming your
income is stable, the less problem you will have.

Plus, how desirable is the home you want to buy? If it is one of a
kind Maine beach front property, as long as there are rich people,
there will be a demand. (Hint: there will always be rich people.
Like the poor, they are always with us.) If it is a home in the
suburbs, where there are 50,000 homes just like it, then you have to
carefully consider the future economic stability of your area.

[madrose1]

S.Korea's Hynix shares jump after Micron comments

SEOUL, July 8 (Reuters) - Hynix Semiconductor Inc <00660.KS>
shares surged early on Monday after the chief executive of U.S.
rival Micron Technology Inc <MU.N> said in an interview that a
deal to buy Hynix's core operations could be resurrected.
Creditors owed more than $5 billion are expected to rekindle
Hynix asset sales this month after replacing the board that
rebuffed a $3 billion sale to Micron in April.
"If they sort through the issues that they have and it looks
like a reasonable process for us to re-engage, then, sure, we are
open to it," Micron chief executive Steve Appleton told
electronics industry weekly, EE Times, in an interview published
at the weekend.
Hynix shares rose 15 percent to 505 won ($0.42) after three
minutes of trade on Monday.
"There is not a mismatch with our values and the workforce's
values there," Appleton said.
"I think the controversy is really at the senior level. The
creditors versus the people running the company and the
shareholders."
An official at creditor Korea Exchange Bank <04940.KS> said
lenders expected a restructuring plan this month from advisers
Morgan Stanley Dean Witter and Deutsche Bank.
"We have not heard directly from Micron," the official told
Reuters regarding Appleton's comments.
Micron officials were not immediately available for comment.
($1=1190 won)
((Lee Shin-hyung, Seoul Newsroom [phone], fax +822 720
5666, [e-mail]))
REUTERS
*** end of story ***

[madrose1]

Qwest Communications Announces Senior Management and Organizational Changes

DENVER, July 7 /PRNewswire-FirstCall/ --
Qwest Communications International Inc. (NYSE: Q) today announced that Richard
C. Notebaert, its new chairman and chief executive officer, has recruited
three senior executives and made organizational changes as part of his plan to
refocus the business, bring proven managerial talent to Qwest and implement a
more cohesive approach to key customer segments.
Oren G. Shaffer has joined Qwest as vice chairman and chief financial
officer. Shaffer, a broadly experienced senior finance executive, was CFO of
Ameritech from 1994 to 2000 after spending 25 years at Goodyear, where he was
CFO and a member of the board of directors. He succeeds Robin R. Szeliga in
the CFO role. Szeliga remains an executive vice president of the company,
focusing on Qwest's debt reduction plans.
Qwest has also reorganized the company around three market-facing units
serving consumers, businesses and wholesale customers. Qwest's national
consumer markets, wireless, cable and video businesses have been combined as
the consumer markets group under executive vice president Annette M. Jacobs,
who was formerly responsible for the wireless business. Qwest's national
business accounts and global business accounts have been combined under
executive vice president Clifford S. Holtz, who was formerly responsible for
national business accounts and will now head up the new business markets group
focusing on business customers of all sizes. Gordon C. Martin, executive vice
president, will continue to run Qwest's wholesale markets group.
Qwest has also formed a special businesses group, Qwest Enterprises,
headed by James L. Becker, who was formerly executive vice president of
customer operations. This unit will contain some of Qwest's smaller
standalone businesses, including hosting and application services, operator
services, calling cards, international networks and other operations. The

goal of Qwest Enterprises will be to provide these businesses with special
focus, allowing those that meet profitability objectives to prosper and grow.
Jacobs, Holtz, Martin and Becker will report to Afshin Mohebbi, president
and chief operating officer, who is now responsible for all of Qwest's
operating units, including Qwest's directories business, QwestDex.
James A. Smith, formerly executive vice president for national consumer
markets; Shaun P. Gilmore, formerly executive vice president for global
accounts; and Ross Lau, formerly president, Qwest Asia, will all be leaving
Qwest.
In other management changes, Joan H. Walker has joined Qwest as senior
vice president, corporate communications. Ms. Walker was formerly senior vice
president, global public affairs at Pharmacia. Earlier, she held a similar
SVP role at Monsanto prior to the company's merger with Pharmacia & Upjohn in
April 2000. Before joining Monsanto, Ms. Walker was senior vice president
corporate communications at Ameritech from 1996 to 1999. She succeeds Michael
P. Tarpey who announced his retirement last April.
Gary R. Lytle, a senior government affairs executive who was formerly
interim president and chief executive officer of the United States Telecom
Association and ran Ameritech's Washington office from 1992 to 2000, has
joined Qwest as vice president, policy and law, responsible for the company's
Washington office. He succeeds Lauren "Pete" Belvin, who will serve as a
consultant to Qwest.
In addition to Shaffer, Mohebbi, Szeliga, Walker and Lytle, reporting to
Notebaert will be Drake S. Tempest, executive vice president, general counsel;
Ian V. Ziskin, executive vice president and chief human resources officer; and
Al-Noor Ramji, executive vice president and chief information officer.
Notebaert said, "Today's organizational changes will bring greater focus
to our efforts to meet the needs of our customers and streamline the company
for the key priority of retaining and growing our business. I am confident
that, in consolidating our operating units under Afshin Mohebbi, we can
improve our ability to provide seamless end-to-end communications solutions to
our customers while increasing synergies and eliminating overlap and
inefficiencies.
"In bringing on board Oren Shaffer, Joan Walker and Gary Lytle in key
staff positions, I believe we have added significant talent and credibility to
the management team. While we may make further management changes, I believe
the senior team we now have in place is very well suited to meet the
challenges we have ahead of us.
"We deeply appreciate all that Robin Szeliga has done for Qwest in a very
difficult environment and we look forward to her continuing contributions as a
member of Qwest's senior management team. We also want to thank Jim Smith,
Shaun Gilmore, Ross Lau, Mike Tarpey and 'Pete' Belvin for their many
contributions to Qwest," Notebaert added.

Biographies - New Officers

Oren G. Shaffer
Oren G. Shaffer, 59, is vice chairman and chief financial officer. Prior
to joining Qwest, Mr. Shaffer was president and chief operating officer of
Sorrento Networks, a maker of optical products. Previously he had been chief
financial officer of Ameritech from 1994-2000 where he was responsible for all
of the company's financial affairs.
Prior to joining Ameritech, Mr. Shaffer was the president of Virgo Cap
Inc., an investment firm. From 1968 to 1992, he held increasingly senior
executive positions at Goodyear Tire & Rubber Co. He was most recently
executive vice president, chief financial officer and director. His 25-year
career at Goodyear included 15 years of international experience, including
chairman and chief executive officer of Goodyear's operations in France.
Mr. Shaffer is on the Board of Directors of the Singapore Equity Fund and
the Japan Fund. He holds a B.S. degree in business administration from the
University of California at Berkeley and an M.S. degree in management from the
Massachusetts Institute of Technology.

Joan H. Walker
Joan Walker, 55, is senior vice president of corporate communications.
Before joining Qwest, she was SVP, global public affairs at Pharmacia. Ms.
Walker held the same role at Monsanto prior to the company's merger with
Pharmacia & Upjohn in April 2000. Prior to joining Monsanto in November 1999,
Ms. Walker was SVP, corporate communications at Ameritech from 1996 to 1999
where she was responsible for corporate marketing and branding, advertising,
customer research and database management, media relations, financial
communications, executive communications, internal communications and external
relations initiatives. She was also president of the Ameritech Foundation and
a member of the company's management committee.
Ms. Walker began her career as an instructor in the Institute of
Management and Labor Relations at Rutgers University from 1971 to 1973. She
held senior level administrative and policy roles in New Jersey state
government from 1973 to 1982. In 1982, Ms. Walker founded Richmann and
Partners, which, as President and CEO, she developed into a mid-size marketing
communications company. The company was acquired by Saatchi and Saatchi in
1988, and Walker joined the agency as an EVP responsible for corporate
strategy. In 1990 she joined NYNEX as Managing Director of marketing
communications. Ms. Walker joined Bozell Worldwide Public Relations as
President and CEO in 1993 and became a partner of Bozell Sawyer Miller Group
in 1996.
Ms. Walker holds a B.A. degree in sociology from Douglass College, and an
M.A. degree in sociology from Rutgers University.

Gary R. Lytle
Gary Lytle, 59, is vice president, policy and law, responsible for the
company's Washington office. Mr. Lytle was formerly interim president and
chief executive officer at the United States Telecom Association (USTA) from
September, 2000 until 2001. Prior to joining the USTA, Mr. Lytle was vice
president, federal relations at Ameritech, where his responsibilities included
serving as head of the Washington D.C. office and lead Washington lobbyist on
all issues involving the U.S. Congress, the White House and The Federal
Communications Commission. Mr. Lytle was also a corporate officer of
Ameritech and worked directly with Ameritech's chief executive officer and the
Board as a key policymaker on legislative and regulatory issues.
From 1980 to 1992, Mr. Lytle held government relations positions at
Michigan Bell, including vice president of government affairs, where he was
responsible for all state and federal relations activity.
Mr. Lytle holds B.A. and M.B.A. degrees in Business Administration from
Michigan State University.

[madrose1]

Bearish : Check Point Software - close: 14.26 change: -0.11 stop: *text*

Company Description:
Check Point Software Technologies is the worldwide leader in
securing the Internet. It is the confirmed market leader of both
the worldwide VPN and firewall markets. The company's Secure
Virtual Network (SVN) architecture provides the VPN and security
infrastructure that uniquely enables secure and reliable Internet
communications. SVN solutions, as delivered in the company's Next
Generation product family, secure business communications and
resources for corporate networks, remote employees, branch
offices and partner extranets. (source: company press release)

Why We Like It:
They say a rising tide lifts all boats, and that certainly seemed
to be the case today. To wit: Only one stock in the NASDAQ-100
finished in the red today. That stock was CHKP, which stood out
on our screens like a giant swollen sore thumb. CHKP hit a new
multi-year low on Tuesday, July 2nd after J.P. Morgan downgraded
the stock. The bears finally relented after taking it as low as
$10.37, and shares actually finished the session with a gain.
CHKP continued higher on Wednesday despite having its earnings
estimates cut by Salomon Smith Barney. Although bulls can point
to the strong volume during these sessions, we believe this was
simply a function of shorts running for the exits with profits in
their hands. One would think that any real buying would've
carried over into today's session. Today's blatant display of
relative weakness suggests that there ARE no willing buyers at
these levels. It might've been understandable to see CHKP finish
with a loss if there was some tidbit of negative company or
sector news, but the bulls have no such excuse. The GSO.X
software index traded higher by nearly 5% on Friday and there was
no news to speak of on CHKP. Speaking of the GSO, it's come
right back to the midline of its descending channel. This level
has acted as resistance since mid-May.

In light of its underperformance, we're expecting CHKP to trade
sharply lower if/when the NASDAQ reverses course next week.
Specifically, we're looking for a near-term decline to the $12
level. More optimistic bears could be targeting a retest of
Tuesday's low, but we'll be satisfied with a dip to our official
exit price of $12.06. Due to the possibility that today's tech
rally could extend into Monday's session, we're not willing to
play CHKP at current levels. Instead, we'll wait for shares to
fall below $14.00 before entering the play. If triggered, we'll
use a stop at $15.06. If shares can move above today's high
($14.87), they'll still have to contend with psychological
resistance at $15.00.

[madrose1]

Wall St Week Ahead-Stocks seen rising on profit outlook

By Chelsea Emery

NEW YORK, July 7 (Reuters) - Look for stocks to creep higher this week as an improving profit outlook helps restore confidence to a market battered by accounting worries, corporate skulduggery and fears of more attacks on the United States.
ADVERTISEMENT



The next several weeks will bring a slew of earnings reports from companies, including the world's biggest aluminum producer, Alcoa Inc.(NYSE:AA - News), and Wall Street is looking for firms to mostly beat lowered forecasts.

"Earnings are starting to see incremental revisions upward and people are starting to isolate those accounting issues," said Owen Fitzpatrick, head of the U.S. equity group at Deutsche Bank Private Banking, which oversees $7 billion. "We'll see the market head higher as we go into the earnings period."

One bright spot is the falling ratio of profit warnings against positive forecasts -- 1.3 versus one, according to market research firm Thomson First Call. That's the slimmest ratio since First Call began tracking such data.

To be sure, investors are still jittery more companies will admit to accounting irregularities and say any attacks on U.S. citizens will hurt a tenuous feeling of security.

If such problems emerge, traders will likely sell into last week's rally that pushed up the Dow Jones industrial average(CBOT:^DJI - News) on Friday to its biggest one-day percentage gain in nine months, snapping a six-week losing streak for the blue-chip gauge.

"There aren't a lot of believers out there -- any rally we've had, it's just been thrown back into our face," said Brian Finnerty, senior vice president for Melhado, Flynn, which oversees $1.5 billion. "In a heartbeat, we could go back down."

But barring more bad news, investors will take heart that stocks in the Standard & Poor's 500 index (CBOE:^SPX - News) are selling for 18.8 times earnings expected for the next four quarters, according to First Call.

"The mood right now is one of quiet patience," said Weston Boone, a listed trader for Legg Mason Wood Walker. "The past three weeks, we've really had a crisis of confidence, but as long as there are no more accounting blowups, we will stabilize."

COMING UP

In coming days, investors will scrutinize quarterly earnings reports from Internet media company Yahoo! Inc.(NasdaqNM:YHOO - News), drugmaker Abbott Laboratories(NYSE:ABT - News) and technology firm Rambus Inc.(NasdaqNM:RMBS - News), among others.

"It's important to listen to comments the companies are making about the future, rather than their past results," said Fitzpatrick, who recommends shares of companies that benefit from an economic upturn, such as Honeywell International Inc.(NYSE:HON - News)

Investors are starting to take heart from signs the rate of positive pre-announcements is rising against profit warnings. At this time last year, 4.3 companies had said results would miss forecasts for every company that said it would beat expectations, said First Call. That's about three times more than now.

Wall Street will also scrutinize economic data including a preliminary inflation indicator, the producer price index, which is expected to be flat in June from a decline of 0.4 percent the month before. Excluding volatile energy and food prices, the index is expected to rise 0.1 percent, according to economists surveyed by Reuters.

Retail sales data for June will also be scanned for signs consumer spending is remaining resilient. Consumers prop up about two-thirds of the U.S. economy.

RELIEF RALLY

Investors returned from the Fourth of July holiday emboldened by the absence of any major terror attacks, although there was an incident in which an Egyptian man opened fire at an El AL ticket desk at Los Angeles airport Thursday, killing two people before being shot dead by guards.

Still, stocks surged on Friday as investors were relieved the shooting appeared to be an isolated occurrence.

"There's relief July Fourth has come and gone with no big incidents," said Fitzpatrick.

For the week, the Dow average advanced 1.5 percent. The Nasdaq slipped 1.1 percent and the S&P 500 dropped 0.1 percent.

[madrose1]

KPN makes prelim bid for KPNQwest assets

(Adds background)

AMSTERDAM, July 8 (Reuters) - Dutch telecoms firm KPN has made a preliminary offer for most of the assets of failed datacommunications carrier KPNQwest (Amsterdam:KQIP.AS - News) and a formal bid is imminent, a source close to KPNQwest's creditor banks said on Sunday.
ADVERTISEMENT



"We have received a letter -- technically you could say this was a bid -- but the letter is still being reviewed and many details must be worked out before you can call this a formal bid," the source said.

The source declined to give any details of the letter but said that he expected a formal offer shortly.

"We are at the stage were a formal bid is imminent...but we are still speaking, and I guess that we will still be speaking in the morning," he added.

KPN was not available for comment but a source close to KPNQwest's creditor banks said on Friday that the Dutch telecom was set to submit a formal offer of 20 million euros for the "KQ Network" after all other potential bidders dropped out.

That would be less than one tenth of the amount the banks were hoping to recoup.

The KQ Network consists of the fibre optic network rings in Britain, the Netherlands, Germany, and France, as well as a transatlantic fibre link and a network operations centre.

The source said then that the bid excludes the 10,000 kilometre Ebone network, bought by KPNQwest in March, and the Central European network. KPNQwest's entire pan-European network totals 25,000 km.

KPNQwest was declared bankrupt in May after it said it would run out of money in June. Its major shareholders, KPN and Qwest Communications (NYSE:Q - News) resigned from its board and banks turned down a request for more funding.

The company accumulated 2.2 billion euros of debt by expanding its network at the height of the telecoms bubble and has lost 42 billion euros of shareholder value in the last two years

[madrose1]

US May machine tool demand up 7.7 pct

WASHINGTON, July 7 (Reuters) - U.S. May machine tool demand rose from April but fell sharply from the same month a year ago, two industry groups said in a joint report on Sunday.

The American Machine Tool Distributors' Association (AMTDA) and the Association for Manufacturing Technology (AMT) said May orders for U.S. machine tools totaled $185.67 million, up 7.7 percent from a revised $172.33 million in April. April demand was previously reported at a lower $171.36 million.
ADVERTISEMENT



"The signs that life is creeping back into manufacturing are there," AMT President Don Carlson said in a statement. "The upward trend in machine tool orders appears to be building momentum into the summer."

However, May demand plunged 29.8 percent from $264.60 million recorded in May 2001. Demand in the first five months of the year totaled $868.49 million, down 31.1 percent from $1.26 billion in the same 2001 period.

May machine tool demand rose from April in all regions except the West, where it fell 21.5 percent to $28.37 million from $36.16 million in April.

In the Northeast, machine tool demand rose 37.4 percent in May to $24.08 million from $17.53 million the prior month. May demand stood at $35.75 million in the South, up 26.1 percent from $28.36 million.

In the Central region it was up 20.3 percent to $40.82 million in May from $33.92 million. The Midwest saw a slight increase of 0.5 percent to $56.65 million from April's $56.36 million.

Machine tools are used to shape metal for such products as car engines, refrigerators and television sets. Demand for these tools can provide a leading indicator of the pace of manufacturing.

Last week, the Commerce Department revised U.S. May durable goods orders to a 0.9 percent rise from a previously reported 0.6 percent gain.

The machine tools report is generally based on a survey of about 200 manufacturers, distributors and importers of machine tools that represent 76 percent of the machine tool market

[madrose1]

Genzyme Corp - GENZ - close: 19.86 change: +1.75 stop: *text*

Company Description:
Genzyme General develops and markets therapeutic products and
diagnostic products and services. Genzyme General has five
therapeutic products on the market and a strong pipeline of
products in development focused on the treatment of genetic
disorders and other chronic debilitating diseases with well-
defined patient populations. Genzyme General is a division of the
biotechnology company Genzyme Corporation. (source: company
website)

Why We Like It:
The biotech sector has been hammered in recent months as the lack
of cash-producing drugs and a plethora of FDA rejections has
caught up with related stocks. The long-term fundamental picture
for the biotech group remains very uncertain, and we're not about
to make an upside prediction. That's why this is purely a
technical play. We're adding GENZ to our Play List tonight in an
effort to capture a breakout. The stock is approaching the
bottom of the large gap from June 20th. Shares fell after the
company warned that slower-than-expected sales of its kidney
drug, Renagel, would have an adverse impact on the bottom line.
We think GENZ is poised to fill this gap and quickly move up to
the $25.00 level. Specifically, we're going to place an exit
price at $24.89. We'll close the play if GENZ trades at or above
this level. Shares have posted substantial gains in the past two
sessions, but the uptrending MACD and daily stochastics (5,3,3)
indicate there's plenty of upside remaining. A trade at $21.00
will also create a double-top buy signal on the point-and-figure
chart.

Our entry strategy will be as follows: We won't go long until
shares beginning filling the gap. This means our entry trigger
is located at $20.36. However, note that we WILL NOT enter the
play if for some reason the stock gaps above $20.50. If
triggered, we'll use a 10% stop at $18.33. This is also safely
under today's low. Note that when playing a biotech stock,
traders need to always be aware of the possibility of large gaps
up or down. FDA drug rejections/approvals,
successful/unsuccessful trials, and product revenue announcements
can all have a major impact on the stock price. Odds are that
won't be the case during our play, but tell that to investors who
were long GENZ on June 20th! It's just something to keep in mind
when deciding how much of your speculative capital to use on
these sort of trades. Also, because GENZ announces earnings
before the bell on July 17th, we will probably close this play by
the end of trading on July 16th.

Picked on July xth at $xx.xx <- see text
Gain since picked: +0.00
Earnings Date 07/17/02 (confirmed)

[madrose1]

Text version -Vivendi faces ratings cut unless liquidity improves

(Press release provided by Moody's Investors Service)
TOKYO, July 8 - On July 1 Moody's Investors Service had
downgraded the long-term senior debt ratings of Vivendi Universal
SA <EAUG.PA> <V.N> to Ba1, leaving the rating under review for
possible further downgrade.
The rating action reflected growing doubts about the
company's ability to achieve the level of debt reduction factored
into the previous rating (Baa3) and to arrange refinancings of
debt falling due over the next twelve months despite its broad
and deep asset base.
It also factored in Moody's expectation that Vivendi
Universal's banks would provide continued support for the company
and would assist it in the orderly implementation of its
financing and asset disposal plans.
In a July 3 press release Vivendi Universal confirmed that
the company has a short-term liquidity issue and informed that it
had initiated discussions with its main credit banks with a view
to putting in place new credit facilities as soon as feasible.
Against this background Moody's notes that the current Ba1
rating (under review for possible downgrade) assumes that Vivendi
Universal succeeds in addressing its short-term liquidity problem
comprehensively in the very near term in such a manner that its
liquidity is assured for the time it takes new management to
conclude additional asset sales for debt reduction and to
restructure its liabilities.
The agency added that in this process the company is becoming
increasingly dependent on the support of its credit banks.
In its opinion, time is of the essence, and wh/C/E TRADE ON
FAVOURABLE U.S. CROP WEATHER
REUTERS
*** end of story ***

[madrose1]

MOODY'S SAYS VIVENDI <EAUG.PA> FACES FURTHER SEVERE RATINGS CUT

IF LIQUIDITY ISSUES NOT RESOLVED IN VERY NEAR TERM

[madrose1]

Japan Hot Stocks-Kobe Steel, Dai Nippon, chips

TOKYO, July 8 (Reuters) - The following stocks are on the
move on Monday.
**KOBE STEEL <5406.T > UP AFTER SMELTING SALE REPORT**
Kobe Steel up 4.29 percent or 3 yen to a 10-month intraday
high of 73 yen, outperforming a 0.63 percent gain in the iron and
steel subindex <.ISTELK.T>.
The shares rose after the Nihon Keizai Shimbun said on Monday
that Japan's fifth-largest steelmaker sold its interest in a
Canadian aluminium smelting project to the Quebec government for
US$100 million to cut debt.
The newspaper said Kobe Steel, whose group interest bearing
debt totalled around 1.14 trillion yen ($9.49 billion) as of
March, sold its 13.33 percent stake as part of efforts to
withdraw from low-margin operations to improve its finances.
0101 GMT
**DAI NIPPON CONSTRUCTION <1836.T> ASK-ONLY AFTER BANKRUPTCY**
Dai Nippon Construction Co ask-only at 13 yen, down 30 yen or
69.8 percent from Friday's close of 43 yen.
After the close on Friday, the medium-sized builder filed for
court protection with liabilities of 297.4 billion yen ($2.48
billion), the 23rd listed firm to go under in Japan this year.
Other builders also came under pressure.
Katsumura Construction Co Ltd <1817.T> down 2.91 percent or
three yen at 100 yen. Magara Construction Co Ltd <1839.T> down
2.13 percent or two yen at 92 yen.
0043 GMT
**CHIP-RELATED SHARES UP AFTER U.S. PEERS RISE**
Chip shares are rising after the Philadelphia Stock Exchange
semiconductor index <.SOXX> soared 9.08 percent on Friday.
Advantest Corp <6857.T>, Japan's biggest maker of
chip-testing equipment, up 4.68 percent or 340 yen at 7,820 yen.
Tokyo Electron <8035.T> up 3.99 percent or 300 yen at 7,830 yen.
Japan's largest chipmaker, Toshiba Corp <6502.T>, up 4.2
percent or 21 yen at 521 yen.
0024 GMT
**ITOCHU CORP <8001.T> DOWN ON SHARE OFFERING**
Itochu ask-only at 420 yen, 2.3 percent or 10 yen down from
Friday's close of 430 yen.
The trading house said on Friday it would issue a maximum 158
million new shares to raise up to 61.24 billion yen to be used
for investment, bond redemptions and debt payment.
The offering would increase the number of outstanding shares
by a maximum 11 percent to 1.58 billion shares, entailing
earnings dilution.
0009 GMT
($1=120.10 yen)
((Tokyo Equities Desk [phone]
[e-mail]))
REUTERS
*** end of story ***

[madrose1]

The Fourth Fuels Frenzied Friday Free-for-All
A relatively uneventful Fourth of July holiday in the U.S. sent
shorts covering in a hurry Friday morning. The markets rocketed
higher with the venerable Dow Jones Industrial Average gaining
324 points and closing at 9379 for a +3.58% move. This is the
biggest point gain in the DJIA since Sept. 24th, 2001 when the
Dow gained 368 points bouncing off the Sept. lows. The NASDAQ
was not to be out done and added 4.9% to gain 68 points and
closing at 1448 after bears frantically covered positions in the
beaten down tech sectors. Volume was decent given the shortened
trading sessions. The NYSE recorded 818 million shares trading
and the NASDAQ saw 735 million shares with WCOME accounting for
371M shares. Market breadth was incredibly positive with 2442
advancing issues trouncing 551 decliners on the NYSE and 2288
advancers overpowering 794 decliners on the NASDAQ.

Matter of Opinion.

The markets may have felt that the U.S. survived the holiday
without terrorist incident but a shooting at LAX airport on the
fourth left two people dead. A 41-year old Egyptian man opened
fired at an El Al ticket counter killing two before being shot
dead by El Al security. El Al is the Israeli-government operated
airline carrier and Israel's Foreign Ministry is calling the
event a terrorist attack but American officials were not willing
to make that call and instead are painting the incident as a
possible hate crime. Some speculators see this as nothing short
of amazing - that the markets could overlook an "attack" at a
U.S. airport and not react negatively when the markets opened
again. Have we become too desensitized that only a large loss of
life will capture our attention -- or -- more likely the nation
was just relieved that nothing "big" did occur?

Will It Last?

The U.S. markets were not the only ones up today. Both the
European averages and the Asian market indices rallied higher
although the bounce in the European and U.S. markets is merely
being hailed as a technical relief rally. The big news this
morning was the U.S. employment report. Unemployment did rise to
5.9% as was expected but the number of new jobs was
disappointing. Economists had been looking for an increase of
68,000 to 80,000 new jobs but the number came in very low around
36,000. Investors ignored the lackluster job growth and focused
mainly on covering short positions, now that the holiday had
passed without major incident, and potential bargain hunting
since many sectors were extremely oversold leading up to Friday's session...

Can It Get Any Worse for Telecom?

Shares of fallen telecom giant WorldCom (WCOME) traded 371
million shares on Friday's shortened session. The stock ended
the week at $0.25 after reopening for trading on Monday and
falling to $0.06 five days ago. Shares rallied three cents or
13.6% today despite news that this could have been the last day
for trading as a listed stock. The NASDAQ board was meeting on
Friday to decide on whether to banish the WorldCom to the OTC
pink sheets. The company was saddled with additional bad news
that the Justice department had asked WCOME to halt its own
internal inquiry so the government could do their own first.
Fortunately this was countered with good news that bondholders
were strongly considering a debt swap for equity, which was seen
as a vote of confidence that the company might survive.

Denial seems to be a growing part of Qwest's repertoire. The
company is already under two SEC investigations regarding its
billing and accounting practices but now the WSJ is claiming the
Justice dept. has launched a criminal investigation. Qwest
denies it is facing any criminal investigation and felt it was
"outrageous" that the company would hear of it through the media
first.

Software & Chips Bounce Higher Despite News

The software sector, which has been plagued by a rash of earnings
warnings and downgrades all week, continued to see companies
filing into the confessional booth. Hoping that many investors
might not notice due to the holiday, JDA Software (JDAS) and
webMethods (WEBM) both warned for the quarter. Shares of JDAS
were hit for a 44% penalty and closed at $15.10, down $11.90,
after telling investors that the company now expects to earn 17
to 18 cents a share for the quarter. Consensus estimates had
been for 22 cents a share. The company blamed a number of big
contracts failing to close by the end of the quarter. Also
pointing to a lack of customers willing to sign deals was
webMethods. WEBM warned that earnings would be a loss of 3 to 5
cents a share compared to the guidance just last April of break-
even to a profit of 1 cent a share. Oddly, shares of WEBM closed
higher on the session, adding 2.69% to close at $8.35. The
Software index was also unaffected by the negative news and
joined the broader markets for a strong rally. The GSO.X added
4.97% to close 111.25. Monday-Tuesday should be key for the
group as the index closed right at the top of its descending
channel.

Leading the short-covering frenzy was the semiconductor sector.
The SOX.X added over 8% after Goldman Sachs came out with
positive comments on Asian technology stocks and singled out DRAM
chip maker Samsung Electronics as its best bet. It was only
Tuesday that Morgan Stanley had thrown a wet blanket on the
entire group citing the turnaround was in question and earnings
forecasts were out of line. It seems bulls and bears have a weak
memory as stocks like Intel rallied 10% on the shortened trading
session.

This Week

Overall, we're very thankful that the recent holiday has been a
safe one. The positive reaction in the markets today were not a
surprise but the magnitude of the move was. The size of Friday's
rally could minimize what was to be a relief rally on Monday. We
would expect the short covering to continue into Monday morning
but momentum could slow as early as Monday afternoon. Now doubt
there are bears just waiting to pounce on the first sign of
weakness.

The biggest challenge to any market recovery in the near future
is earnings season. Earnings begin to roll in next week and
start to pick up speed around Wednesday. While no one expects
the numbers to be good for anything tech related the key will be
guidance. If companies do not offer any sort of positive
guidance or if they continue waffling on news of a recovery then
the bearish down trend should reassert itself quickly. The I.T.
sector has already pulled the plug on a second half recovery so
expect a lot of references to business being better in the fourth
quarter or even 2003.

Any true reversal to this bear market is going to require volume
and we doubt that is going to occur any time soon. The retail
investor has removed themselves from the markets given their
lousy performance and the crisis of confidence in corporate
governance. On the other hand, traders should be able to profit
from the volatile moves that will continue to be characteristic
of any bottom building. Before I close, consider this - for
months we have heard that a retest of the September lows were
necessary and furthermore a lower low may need to be set. Well,
Tuesday-Wednesday this week was a lower low for the SPX and the
Nasdaq composite. With several additional indices hitting multi-
year lows and bouncing it is possible that a decent short-term
bottom is at hand. The key will be where buyers decide to step
in next week and stop the profit taking that will occur after
this big bounce is over.

Next week ought to be interesting so enjoy your weekend.

- James

[madrose1]

May Consumer Credit is released 7/8 @ 3pm

June Import Prices are released 7/10 @ 8:30am
&
May Wholesale Inventories scheduled 7/10 @ 10:00am

June Producer Price Index is relerased 7/11 @ 8:30am

June Retail Sales are released on 7/12 @ 8:30am
&
July Michigan Sentiment Index on 7/12 @ 9:30am

TOKYO'S NIKKEI RISES ABOVE KEY 11,000 LEVEL FOR
FIRST TIME SINCE JUNE 14

apan June domestic WPI flat pct month/month

(Adds table)
TOKYO, July 8 (Reuters) - Japan's domestic wholesale price
index (WPI) was flat in June from the previous month, the Bank of
Japan (BOJ) said on Monday.
It was the fourth straight month that the index was flat.
The June WPI was down 1.0 percent from a year earlier for the
21st straight month of year-on-year decline.
The following is a breakdown of the May WPI data, in percent
(index base year 1995).

[madrose1]

Hitachi cancels chip line closure on recovery-paper

TOKYO, July 8 (Reuters) - Hitachi Ltd <6501.T>, Japan's
biggest electronics manufacturer, has cancelled plans to close a
chip production line and an assembly and inspection subsidiary
due to a recovery in demand, the Nihon Keizai Shimbun said.
The newspaper said on Saturday that Hitachi had reversed
plans to close one of four production lines at a plant of
subsidiary Hitachi Hokkai Semiconductor Ltd on the northern
island of Hokkaido due to recovering semiconductor demand.
Japan's third-largest chipmaker also called off the planned
takeover of its assembly and inspection arm in Yamagata
Prefecture by subsidiary Hitachi Yonezawa Electronics Co, the
Nihon Keizai said.
No one at Hitachi could be reached for immediate comment.
Stronger-than-expected demand for microcomputers used for
home electronics appliances led Hitachi to alter some of its
restructuring plans announced in October, which focused on staff
cuts and disposal of excess facilities, the newspaper said.
Hitachi posted a group net loss of 483.8 billion yen ($4.03
billion) in the year ended in March, but has forecast a profit of
60 billion yen for 2002/03.
($1=120.10 Yen)
((Tokyo Equities Desk [phone]
[e-mail]))
REUTERS
*** end of story ***

[madrose1]

Maybe the market setup for Monday morning should be called the MOSS. (mother of all short squeezes) Of course after Friday there may not be many shorts left to squeeze. The +324 Dow gain was the largest one day gain since last September and helped the Dow break its six week losing streak. Unfortunately the Nasdaq and the S&P-500 still posted losses for the week.
There was no economic reason for the bounce Friday. The Jobs Report should have struck fear into traders but their minds were already made up. The Jobs Report showed that there were only 36,000 new jobs created in June when 104,000 had been expected. Unemployment rose to 5.9% and the new jobs created were mainly in health services not business services and therefore did not signal any upturn in business activity. Manufacturing actually lost -23,000 jobs in June. While this may not be exciting we will continue to take these small gains instead of losses as bullish. What was not bullish was the revision downward of the prior three months numbers. May dropped from +41K to only +24K. April fell from positive to negative -21k and March dropped from positive to -5K. Suddenly the economic recovery is recovering much slower than expected.

Bulls roared? Traders came back from the holiday, saw no negative terrorist headlines and rushed to buy stocks. Sorry, that is not the way it happened. With the volume very light it was not a new bullish sentiment taking control but simply short covering in light of no attacks. This brings up several interesting points. We all know the bears have been shorting rallies for months very successfully. They are shorting based on general market fundamentals, accounting concerns, falling profits, etc. Only one short covering rally in recent history has brought anything close to this rebound and that was the Cisco comments on May-7th. The following day the Dow gained +305 points to 10141 and that was on a Wednesday with three full days of trading before the weekend. The +324 point gain on Friday in only a half day of trading would suggest that many more traders were short than in May.

Were they short simply because the economic conditions were worse? I doubt it since they are actually improved from early May. Were they short because the market was setting new lows on Wednesday? I doubt that also. After seeing the market action on Friday I now suspect that the flurry of terrorist warnings leading up to the holiday had prompted a broader range of traders to short stocks. Remember the rise in the markets on Wednesday afternoon? I said at the time that I thought it was short covering by smart traders taking profits in advance of the holiday unknowns. I believe the action on Friday was simply the shorts expecting an event closing those positions. This is really scary since it shows how many traders really expected another attack.

I also believe it points out another problem. The economic fundamentals did not change but the number of people wanting to go long on Friday was amazing. I received over a dozen emails from traders wanting to go long even after a +200 point gain in the Dow. This makes me believe that there is still not enough fear in the markets. It is surprising when you consider the levels we hit last week. Some analysts have suggested we are undergoing a capitulation by breadth instead of depth. With the horrible internals the beginning of the week it appeared we were nearing a bottom. With the knee jerk rebound on Friday I am now not so sure.

Monday is shaping up to be volatile to say the least. The TRIN closed at .25, a level only seen four times earlier this year. On May-8th and April-16th the following day posted a sharp drop. On March-8th and 15th the markets trended sideways for a couple days before dropping. The VIX closed below 30 again and back at the same level it was just before the last drop. Obviously these are both overbought/oversold indicators and they are pointing to overbought. Extreme overbought in the case of the TRIN.

The gains on Friday were extreme because of the oversold and heavily shorted market conditions. The spring was completely compressed and when the rebound occurred in only a half day's trading the results were dramatic. This brings up the problem of what may happen on Monday. Have all the shorts covered? Did the stop losses get triggered on the ones who were not at their PC on Friday? Will institutions come back to work on Monday and decide that now is a good time to buy? I doubt it. Earnings warnings are still with us and new accounting scandals are likely to continue to erupt. Fundamentals did not change despite the positive comments about the chip sector. For instance, to illustrate the absurdness of the buying on Friday, AMD gained nearly +7% to levels near its last warning. After two warnings in the last two weeks for AMD did business suddenly explode? I don't think so. This is simple short covering with a compressed timeline. Investors are not flocking into the market. The TrimTabs.com weekly survey showed that another $10.8 billion in cash flowed out of equity funds for the week ended Wednesday. This was on top of -$9.2 billion the week before.

I looked at several hundred individual stock charts and almost without exclusion the buying propelled them to just under recent resistance or right at it. The bulls would make the case that an opening bounce on Monday could propel these stocks over that resistance and trigger an entirely new round of short covering. This is entirely possible and would simply mean we roll over at a higher level. The bears would hope that the buying was over after Friday and sell into any weak bounce on Monday. You can bet that the absence of hedge fund trading on Friday means they will be back in force on Monday. Since they are normally contrarian in direction it means they will be shorting heavily on any weakness. Obviously you can see from my comments I am directionally biased.

Since IBM and Intel have not warned (yet) the possibility of lowered guidance with their earnings is very strong. The economic outlook since their last guidance has slowed considerably. IBM announces on the 17th, Intel on the 16th. That is only seven trading days away for Intel. With warnings still flying I expect a flurry on Monday and Tuesday now that the holidays are over. Want more bad news? IBM warned before the bell on Monday April 8th with scheduled earnings on the 17th. Monday is July 8th with earnings on the 17th. A surprising coincidence! Don't be surprised if history repeats itself.

Technically speaking the resistance for the Dow is 9412, only 38 points away and then 9725. I would suspect the 9725 is the one that will hold. Resistance for the broader S&P is 1007, 19 points away and 1040, 52 points above Friday's close. The Nasdaq has strong resistance at 1475-1485 an as long as the opening bounce does not take it over those levels they should hold on a gradually rising market. All this resistance bashing means that if this IS ONLY a short covering rally it will fail quickly and not much higher than our present position. There is room for one more good day and then the market will have to go back to trading on fundamentals in order to break out. Without some positive earnings surprises and positive guidance this will not happen. Bottom line, if you are long calls keep those stops tight after any opening bounce.

Enter Very Passively, Exit Very Aggressively!

Jim Brown
Editor

[madrose1]

Tokyo's Nikkei seen up on Nasdaq, eyeing 11,000

TOKYO, July 8 (Reuters) - Tokyo's benchmark Nikkei average is
expected to test the key 11,000 level on Monday, led by gains in
NEC Corp <6701.T> and other major technology issues after the
tech-laced U.S. Nasdaq jumped five percent.
"The Wall Street rally came on just a half day of trade, but
we'll have no choice but to chase those gains here," said Satoshi
Hayashi, general manager at Meiko National Securities.
"We should mount a nice challenge at 11,000, led by
short-covering in high-tech shares."
The benchmark Nikkei <.N225> gained 1.82 percent to 10,826.09
on Friday. Analysts said it would move between 10,800 and 11,200
on Monday.
Nikkei futures in Chicago <O#NK:> shot up 275 points to
11,060 on Friday, suggesting the Nikkei may clear 11,000 for the
first time since mid-June.
Selling by public pension funds, as well as banks and
corporations unwinding cross-held shares, is expected to emerge
around the 11,000 mark, and could limit gains.
Itochu Corp <8001.T> may not join any market rise after the
trading house said after the Friday close that it would issue a
maximum 158 million new shares, equivalent to about 11 percent of
those outstanding, posing a hefty dilution to per-share value.
The government will release May machinery orders data on
Monday, while the Bank of Japan is set to unveil money supply
data and the wholesale price index for June.
STOCKS TO WATCH
-- Dai Nippon Construction Co <1836.T>, ailing builders.
After the close on Friday, the medium-sized builder filed for
court protection with liabilities of 297.4 billion yen ($2.48
billion), the 23rd listed firm to go under in Japan this year.
A newspaper report during late afternoon trade on Friday that
the firm, owned 15.9 percent by Kinki Nippon Railway Co <9041.T>,
would file for protection from creditors sent Dai Nippon's stock
plunging 27.4 percent to 53 yen.
-- Oriental e service in October, becoming the
first major Japanese telecoms carrier to make a full-scale entry
into the market, the Nihon Keizai Shimbun said on Monday.
The business daily said the IP service offered would be much
less expensive than existing phone services, charging 8.5 yen per
three minutes for calls anywhere in Japan.
-- Kobe Steel Ltd <5406.T>.
The Nihon Keizai said on Monday the steelmaker sold its
interest in an aluminium smelting project in Canada for about
US$100 million to the government of Quebec to cut its group
interest-bearing debt.
-- Hitachi Ltd <6501.T>.
The electronics maker has cancelled plans to close a chip
production line and an assembly and inspection subsidiary due to
recovering demand for chips, the Nihon Keizai said on Saturday.
($1=120.10 yen)
((Nathan Layne, Tokyo Equities Desk [phone]
[e-mail]))
Reuters Terminal users can see latest rates by double-clicking
on :
Chicago N225 data <0#NK:>
Dow Jones industrial average <.DJI>
Nasdaq Composite Index <.IXIC>
Standard & Poor's 500 Index <.SPX>
Dollar/yen <JPY=>
Reuters Terminal users can see other related news and rates by
double-clicking on :
All Nikkei indices <0#.NIKKEI>
All shares listed on Nikkei-225 <0#.N225>
N225 index <.N225> N300 index <.N300>
Top 20 by volume <.AV.T> Top 20 by value <.AM.T>
Total volume <.TV.T> Total value <.VM.T>
All TSE simple avg <.TSEA> All TSE weighted avg <.TSEB>
Top 20 gainers by pct <.PG.T> Top 20 losers by pct <.PL.T>
Top 20 net gainers <.NG.T> Top 20 net losers <.NL.T>
Osaka N225 data <0#JNI:> TOPIX futures data <0#JTI:>
TOPIX index IPO news [JP/IPO]
Japan Diary [JP/DIARY] All Equity news [E]
MORE
*** end of story ***

[madrose1]

U.S. jobless grows sluggishly ,


By Tim Ahmann
WASHINGTON, July 5 (Reuters) - The U.S. unemployment rate
ticked higher in June amid stubbornly sluggish hiring, a sign
the road back to full economic health could be long and rocky.
Employers outside the farm sector added a paltry 36,000
workers to their payrolls last month, the Labor Department said
on Friday -- less than half what economists had expected.
Moreover, the department ratcheted down its data for April
and May to show jobs growth of just 3,000 over those two
months, compared to a total rise of 47,000 reported earlier.
With the jobs market still so frail, the unemployment rate
rose to 5.9 percent in June from 5.8 percent a month earlier.
"You're seeing an improving trend, but it's pretty minimal.
The report is still suggesting the labor market is improving,
but not markedly so," Bank of Montreal/Harris Bank Assistant
Chief Economist Paul Ferley said.
The weak tone of the report dovetailed with the view that
the Federal Reserve would bide its time before raising
overnight interest rates from a 40-year low of 1.75 percent.
U.S. Treasury prices got a boost from the report early in
the day, but closed mostly lower as money flowed to a stock
market rallying on relief that the Fourth of July holiday
passed without any major terror incident.
The Dow Jones industrial average climbed 324 points, or
3.58 percent, while the tech-heavy Nasdaq Composite Index
surged about 68 points, or 4.94 percent.
While June's payrolls gain was the biggest since a rise of
75,000 in February 2001, it showed hiring remains anemic.
Analysts say monthly payroll increases in excess of 100,000 are
needed to ensure the jobless rate does not continue to rise.
"We are still in a recovery, but the recovery is a little
bit more tepid than we would like," Labor Secretary Elaine Chao
told reporters. "It will take some time before businesses
regain confidence in the long-term sustainability of the
economy before they embark upon permanent hiring."

STILL BLEEDING
The long-suffering manufacturing sector shed 23,000 workers
in June, the 23rd straight month factories cut theirpayrolls.
Still, manufacturing job losses have slowed in recent months.
In addition, the workweek lengthened, both overall and in
manufacturing, and manufacturing overtime rose -- possible
precursors to employment gains ahead.
"The economy is improving in terms of output, but they're
doing it by expanding hours rather than hiring new people.
That's a good sign in that eventually you get to the point
where they start hiring people back, but for now that's not the
case," said Kevin Logan, senior economist at Dresdner Kleinwort
Wasserstein.
In addition, the so-called help-supply category of
payrolls, which comprises temporary workers, added 9,000 jobs,
building on recent gains that economists have said suggest more
permanent hiring may be in train.
Employers, generally cautious in the early stages of an
economic recovery, often use longer hours and temporary help to
deal with the first renewed burst of activity before hiring new
workers on a permanent basis.
"At this point we should be seeing much stronger payrolls
gains," said Stephen Stanley, senior market economist at
Greenwich Capital Markets. "It's clear that firms are being
very cautious, waiting as long as possible before hiring."
When that cautiousness will lift is an open question.
"It'll take an improvement in consumer confidence and
business confidence and the equity market stabilizing before
companies start hiring again and, right now, that's the big
unknown," said Joseph LaVorgna, senior U.S. economist at
Deutsche Bank Securities in New York.
"The Fed's on permanent hold, they wouldn't go till late
this year at the earliest," he said, echoing a view widely held
on Wall Street.

PRICE PRESSURES RISING?
So far, low inflation has given the Fed room to keep
interest rates low and let the economy gather strength. But
reports on Friday showed price pressures may be brewing.
The Leading Inflation Index from the Foundation for
International Business and Economic Research rose for the sixth
straight month to 94.9 in June from 92.7 in May. Separately,
the Economic Cycle Research Institute said its Future Inflation
Gauge jumped to 101.7 last month from 99.1 in May.
In addition, the Labor Department's jobs report showed that
average hourly earnings increased six cents in June to $14.76.
But Fed watchers said the central bank was more concerned
about economic weakness.
"I don't think there is any inflation danger that's
worrying the Fed at this point," former Fed governor Lyle
Gramley said. "At this juncture, the Fed doesn't not want to
see the inflation rate going any lower, it does not want to see
us flirt with deflation."

BREAKDOWN
Excluding the 23,000 government employees hired in June,
total private-sector payrolls grew by 13,000 last month, a
meager increase but still the biggest gain since January 2001.
The report showed that 14,000 construction workers were
hired last month -- the most since a rise of 28,000 in May of
last year -- while services firms created 33,000 jobs. But in
the retail sector 18,000 workers were let go.
While hiring remains weak, there are signs the pace of
layoffs was slackening. The department said on Wednesday that
initial claims for jobless benefits hit the lowest in 15 months
last week. However, analysts cautioned that WorldCom Inc.'s
<WCOME.O> recent announcement that it was cutting 17,000 jobs
had darkened the picture.
((Washington newsroom, [phone], fax +1
202-898-8383))
REUTERS
*** end of story ***

[madrose1]

InfoSpace gets delisting warning

By Bambi Francisco, CBS.MarketWatch.com
Last Update: 11:14 AM ET Jul 5, 2002

SAN FRANCISCO (CBS.MW) -- InfoSpace, a provider of wireless and Internet software, announced Friday that it received a delisting notice from the Nasdaq Stock Market for not complying with a minimum bid price of a $1 per share.

Accordingly, InfoSpace (INSP) has 90 days to regain compliance with its stock trading above $1 for 10 straight trading days. InfoSpace shares currently trade at 51 cents.

Amazon.com's hit list

What do bicycle-riding hookers, convicted bank robbers and EBay have in common? They all are subjects of books that top Amazon.com's "hit list."

If you want to know what Americans are buying this holiday weekend, just check out Amazon.com's (AMZN) bi-weekly "hit list," which ranks the top sellers across all of its categories -- from books to electronics -- based on the purchasing habits of its customers over the past 24 hours.

Apparently, Amazon.com customers are interested in bicycle-riding hookers who meet up with convicted bank robbers. Those are the characters in the book titled "Adios Muchachos."

The third best selling book is about EBay (EBAY), titled

"Starting an EBay Business for Dummies."

[madrose1]

Oracle-ORCL has an analyst meeting in Redwood City, CA 7/10 sponsor company

[madrose1]

When will the real estate
market crash?

BY MARTHA SMILGIS
Special To The Examiner

Nationwide, May was a boom month in the still sizzling residential
housing market. Housing starts were up 12 percent (the biggest gain
since 1995) and new home sales were up 8.1 percent (the biggest
gain in 6 months). During the past year, the median price for a new
home in the U.S. increased 6.6 percent.

Meanwhile, moneylenders are crawling out of the woodwork. The
mortgage industry is taking in billions, giving easy money to anybody
and everybody. The refinancing mania has hit a new high, with rates
on a 30-year fixed loan hovering around 6.6 percent -- the lowest in 40
years.

And this blistering refi market is hardly over. Economists predict
that if mortgage rates drop below 6 percent, there'll be another fresh
wave of refi candidates -- those holding fixed rate loans at 7 percent.

But as many investors have painfully learned, markets of all types
are based on supply and demand. This creates cycles. Although no
one expects a seismic shift back into stocks tomorrow, there are
signs that the real estate market is peaking, wobbling and possibly
ready to cave.

For starters, the economy is slowly picking up. Interest rates can
only stay down for so long without sparking inflation. When the feds
raise rates -- and they will -- fixed mortgage rates will rise, scotching
the refi boom. Those "indexes" that adjustable mortgage rates are
tied to will also soar. People attracted to home ownership because of
low interest rates will vanish.

There's solid evidence that high-end housing -- up 40 percent (Palo
Alto, Napa, Santa Barbara, Aspen) -- has run its course. What's still
cooking is the sub-prime mortgage market. It is this less
credit-worthy group that is now enabling developers to make money
on low-end housing.

These days, many advertised loans require only 3 percent down --
or even no down payment. These "interest only" loans allow buyers to
put off paying principal for 15 years. Of course, when market
conditions change, the people who fell for this sales pitch will find
themselves owning a mortgage and not a house.

Even reputable mortgage brokers and banks are sucking in people
with adjustable loans under 4 percent. The reasoning behind the pitch
is that you will soon sell the house for a profit in a year or two. That
way, you make money before the adjustable rate escalates to 7
percent and your mortgage payments swiftly double.

Guess what? In two years, no one wants to buy the house you
overpaid for and you are stuck with budget-breaking payments.
Goodbye house, hello foreclosure.

Another ominous sign is that when mortgage rates first dropped,
most applicants wanted fixed 30-year loans. Very sensible. But
during the past two months, there has been a 75 percent increase in
applicants for adjustable-rate mortgages. Sucked in by super low
interest rates now, these folks best brace for a rude awakening.
Adjustable rates can escalate quickly.

As for commercial real estate, because of the anemic economy,
rentals are down and vacancy rates are climbing. The FDIC is
concerned banks don't have enough equity coverage for their hefty
commercial real estate loans. So far, there have been few
foreclosures. But just wait until interest rates go up on those
adjustable loans while rental income dwindles.

Like spring flowers, Realtors' for sale signs are everywhere. There's
so much competition out there that many have cut commissions from
6 percent to 4 percent. Spec houses and flip artists abound. Just
about every shack and garage (with a new coat of paint and terra
cotta pot of ferns) is for sale at a ridiculous price.

Aside from this obvious evidence, the most convincing sign that
the real estate market is bound to cool is that construction industry
insiders are selling their shares of housing stocks in great number.
They know plenty we don't know.

Also, keep in mind that after the California real estate market
dropped in 1990, housing prices were at a standstill for four to five
years. Of course, the population is increasing and people will always
require housing.

But those in need and with money have bought homes and are
now saddled with huge debt. Day by day, throughout the housing
market, saturation points are being reached.

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