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1306 ET 01July2009-Barclays downgrades lodging sector
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Barclays Capital downgraded the U.S. lodging sector to "negative" from
"neutral," saying recovery in the industry was likely to lag economic recovery
by more than the historical six months.
The brokerage cited margin pressures in 2010, corporate planners locking in
current low rates for the next year, slowing fee-based growth and increasing
foreclosures and potential bankruptcies as key factors that impede improvement
in lodging fundamentals over the next year.
The firm downgraded Starwood Hotels & Resorts (HOT.N), Marriott
International (MAR.N) and Choice Hotels International Inc (CHH.N) to
"underweight" from "equal-weight," saying they were the "most vulnerable."
For details, see [ID:nBNG496255]
Reuters Messaging: ryan.vlastelica.reuters.com@reuters.net
1208 ET 01July2009-US may lose 1 mln more jobs in 2009 -Macro Advisors
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The United States may be in for another 800,000 to 1 million job losses
this year and won't see a resumption of employment growth until 2010, Joel
Prakken, chairman of Macroeconomic Advisors, said on Wednesday.
Prakken, whose firm jointly developed the ADP Employer Services report on
private sector jobs, said economic growth will resume at a modest pace in the
second half of the year, coming in the 2-2.5 percent range after another fall
in output during the second quarter.
Earlier on Wednesday, ADP released a report saying U.S. private employers
cut 473,000 jobs in June, more than the 393,000 expected in a Reuters poll but
down from the 485,000 private sector jobs lost in May.
Reuters Messaging: ryan.vlastelica.reuters.com@reuters.net
1156 ET 01July2009 Credit Suisse recommends PepsiCo call spread
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A call spread in PepsiCo Inc (PEP.N) is attractive to capture upside
exposure in the company and benefits from the flat skew and lower implied
volatility, said Credit Suisse equity derivatives strategist Sveinn Palsson in
a note. He recommends a January 2010 PEP $60-$65 call spread for $1.10, using a
reference price of $54.91. "The dominant discussion surrounding PepsiCo remains
the premium it should offer to buy its bottlers, where the achievable synergies
remains the main debate," the note said. "PepsiCo estimates $200 million in
synergies nearly four times less than what its largest bottler, Pepsi Bottling
(PBG.N) estimates." But Credit Suisse beverage analyst Carlos Laboy believes
this overshadows the main point, as even PepsiCo's conservative synergy
estimates can lead to a significant rise in its share price. Even if a deal
does not materialize, Laboy sees limited downside, since PEP trades at a
discount to the market, including a 7 percent discount to rival, Coca Cola.
Palsson said.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1144 ET 01July2009-Oracle shares rise after Caris starts coverage
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Shares of Oracle Corp (ORCL.O) rose on Wednesday, after Caris & Co started
coverage on the software company with an "above average" rating.
The firm wrote that Oracle was well positioned to benefit from any recovery
in global IT spending and can elevate its market position with the purchase of
Sun Microsystems Inc (JAVA.O).
For details, see [ID:nBNG490467]
Shares rose 2.1 percent to $21.87.
Reuters Messaging: ryan.vlastelica.reuters.com@reuters.net
