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AOL weighs on pre-market

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Investors look to be cautious this morning after AOL Time Warner (NYSE:AOL) $16.57 reaffirmed its 2002 outlook for its beleaguered America Online division, and said it expects 2003 revenue for its online business to be flat, as growth in subscriptions revenue will be offset by declines in advertising and commerce revenue.

The company said it expects 2002 EBITDA for the company to grow "at the lower end" of its previously given expected range of 5% to 9%. The media company also forecasted that 2003 EBITDA for its AOL division will decline 15% to 25% from expected 2002 levels.

This news has shares of AOL Time Warner (AOL) seeing some selling in pre-market action as the stock falls -7.5% from yesterday's close to $15.32.

Adding to a cautious tone here in the U.S. is United Kingdom- based bank Barclays PLC, which fell 6.4% in overseas trading after the fourth-largest bank in the U.K. said it expects operating profits to meet the lower end of forecasts for the year as its investment banking and management businesses continue to suffer in the down market.

The news from Barclays PLC has shares of Dow components Citigroup (NYSE:C) $38.52 edging lower at $38.35, while JP Morgan (NYSE:JPM) $25.22 inches up 3 cents at $25.25 in light pre-market trading.

Home builders may be under some pressure this morning after the Wall Street Journal reports that home prices rose at a significantly lower pace in the third quarter when compared to the second quarter, and may be a sign that the housing market may be cooling off and facing correction. The report by the Office of Federal Housing Enterprise Oversight said the office's index of prices for single-family homes rose just 0.84% during Q3, compared to a rise of 2.39% in Q2.

This morning's cautious tone has Treasuries seeing buying across the major maturities, with the 5 and 10-year maturities seeing the greater amount of buying. The December 10-year futures (ty02z) 112'195 +0.18% is seeing gains, while the benchmark 10- year YIELD ($TNX.X) falls to 4.175%.

S&P futures (sp02z) currently trade down 7.6 points at 927.70. NASDAQ futures (nd02z) are lower by 17 points at 1,110.50 and Dow futures (dj02z) are off 65 points at 8,805.

It looks like HL Camp & Company may be taking the week off as they have not posted fair value or buy/sell premium levels again today.

Jeff Bailey

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