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Good old French cooking\?

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Shares of embattled French media giant Vivendi (NYSE:V) $22.45 dropped as much as 40% in overseas trading after an article in the afternoon Le Monde newspaper said Vivendi in October 2001 tried to avoid booking a euro 1.5 billion ($1.35 billion) loan transaction that resulted from a deal involving the sale of BskyB shares. Including the figure would have pushed group results into the red for the first time and increased its debt, the article said.

The report said that regulators required Vivendi to book the transaction, but that its auditors Andersen were instructed to find an accounting method allowing the group to remain in profit. After several meetings with regulators, the paper said, the media company was forced to back down.

In oversead trading, shares of Vivendi (V) were halted for trading four separate times. The news that there may be some accounting scandals taking place outside the U.S. had European markets under selling pressure. In France, the CAC 40 fell - 2.85% to 3,786. Germany's DAX fell 2.26% at 4,268 and the UK's FTSE 100 traded down -1.7% to 4,606.

Here in the U.S. we're seeing what looks to be a mixed open for stocks from the futures markets. S&P futures (sp02u) are trading up fractionally at 970.40, while NASDAQ futures (nd02u) are lower by 7 points to 995 and Dow futures (dj02u) are higher by 29 points at 9,125.

Fair value for the S&P 500 today is $1.37. That price will not change during the session. HL Camp & Company has their computers set for program buying at $2.35 and set for selling at $-0.68. Fair value for the NASDAQ-100 today is $4.37.

If you would like more information about fair value, its calculation and uses, along with information regarding buy/sell programs, please visit www.programtrading.com.

Before it starts trading it gets "downgraded"

Tyco Intl. (NYSE:TYC) $13.31 is set to spin off its CIT Group (NYSE:CIT) in an Initial Public Offering (IPO) today by offering 200 million shares priced at $23. While it is viewed as an accomplishment to get such a large deal out the door under the less than bullish environment for equities, Tyco (TYC) was originally hoping to fetch $25 to $29 per share.

This morning, Morgan Stanley (not one of the underwriting members of the CIT deal) initiated coverage at "underweight"; saying credit quality concerns linger, wide debt spreads pose a competitive issue, and returns appear unsustainable.

Cutting number for Cisco Systems

Giving a negative tone to technology stocks is Salomon Smith Barney saying that field checks indicate a premature flattening of demand into late June, when it should have been accelerating in to the seasonally strong month for networking equipment. Salomon believes the soft conditions in the U.S. suggests results will come in at the low-end of Cisco Systems' (NASDAQ:CSCO) $13.09 guidance suggesting a 1% revenue increase and barely a 1.05 book-to-bill. Salomon cuts CSCO's FY03 revenue estimates to $20.8 billion from $21.4 billion.

Jeff Bailey
Senior Market Technician
Option Investor

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