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Markets & Stocks
Hot stocks: Glazed, jelly
May 16, 2001: 4:54 p.m. ET

An upbeat forecast from Krispy Kreme sends it soaring but Pre-Paid Legal falls
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NEW YORK (CNNfn) - Shares of Krispy Kreme Doughnuts jumped more than 14 percent Wednesday after the company raised its profit forecast for the next two fiscal years. But Pre-Paid Legal Services tumbled nearly 26 percent amid concern that the Securities and Exchange Commission is targeting the marketer of legal service plans for possible accounting problems.

Gold stocks rallied on inflation worries, while shares of homebuilders fell after Salomon Smith Barney downgraded many of the companies in the sector.

Wednesday's winners

Krispy Kreme Doughnuts (KREM: up $7.00 to $56.40, Research, Estimates). The doughnut retailer reported higher-than-expected first-quarter earnings Wednesday, and raised its profit estimates for fiscal 2002 and 2003.

RealNetworks (RNWK: up $3.62 to $12.42, Research, Estimates). The streaming media software company has teamed up with Sony Computer Entertainment to enable the more than 10 million users of the PlayStation 2 game system to use Internet media through RealPlayer.

Homestake Mining (HM: up $0.55 to $7.20, Research, Estimates);  Newmont Mining (NEM: up $1.90 to $22.71, Research, Estimates);  Glamis Gold (GLG: up $0.10 to $2.50, Research, Estimates); Meridian Gold (MDG: up $0.84 to $8.45, Research, Estimates).  The price of gold, traditionally a hedge against rising inflation, rose to a two-month high and gold stocks followed. The gain in the precious metal's price comes as Treasury prices have weakened, sending yields higher, on worries that the Federal Reserve's five interest rate cuts this year could lead to inflation. The Consumer Price Index, the government's main inflation gauge, rose 0.3 percent in April.

Suiza Foods (SZA: up $4.32 to $53.14, Research, Estimates). The company's Morningstar Foods division is teaming up with Procter & Gamble (PG: up $2.31 to $68.29, Research, Estimates), to develop a new coffee beverage called Folgers Jakada, a chilled coffee drink.

Global Crossing. (GX: up $1.71 to $14.57, Research, Estimates) A subsidiary of the builder of fiber optic networks, Global Crossing Holdings, said that its board has declared a cash dividend of $5.25 a share on its senior exchangeable stock due 2008.

Packaging Corp. of America (PKG: up $1.58 to $15.82, Research, Estimates). The producer of containerboard and corrugated packaging products said it will buy up to $100 million of the company's outstanding common stock over the next twelve months. The company also said it will be added to the Standard & Poor's MidCap-400 index.

QLogic (QLGC: up $5.30 to $47.81, Research, Estimates). Banc of America Securities upgraded the maker of products that connect computer networks and storage devices to "buy" from "market perform." The company reported fourth-quarter earnings of 27 cents a share late Tuesday, in line with expectations, even as sales growth slowed for the third consecutive quarter.

Applied Materials (AMAT: up $4.21 to $54.10, Research, Estimates). The supplier of equipment used to make computer chips logged a fiscal second-quarter profit late Tuesday that was on the low end of analysts' estimates. It also warned that third-quarter sales and earnings will be below forecasts, though it expects a pick-up in business later in the year.

Brocade Communications Systems (BRCD: up $4.71 to $47.21, Research, Estimates). The supplier of fiber-optic switches that link computer-storage networks late Tuesday posted a near 10 percent drop in second-quarter net income, in line with Wall Street expectations. Merrill Lynch slashed its fiscal-year 2002 earnings forecast Wednesday to 56 cents a share from 92 cents a share.

Rite Aid (RAD: up $0.64 to $8.71, Research, Estimates). The No. 3 U.S. drugstore chain said Wednesday it has arranged a new $3 billion debt refinancing deal that would allow it to meet its repayment obligations maturing before 2005.

Sawtek (SAWS: up $2.25 to $28.26, Research, Estimates). Chipmaker TriQuint Semiconductor said Tuesday it acquired Sawtek in a $1.3 billion stock swap deal. Sawtek will operate as a wholly owned subsidiary and continue making electronic signal processing components and other products under the Sawtek name.

BEA Systems (BEAS: up $3.70 to $37.74, Research, Estimates). ABN Amro raised its rating of the software company to "add" from "buy" after the company said late Tuesday that it beat first-quarter earnings expectations and  plans to raise its earnings per share guidance for the current fiscal year. Pro forma net income was 8 cents per share on revenue of $257.2 million. Revenue jumped 67 percent compared with the year-earlier quarter.

Abercrombie & Fitch (ANF: up $2.37 to $42.10, Research, Estimates). The teen-oriented clothing retailer posted a 27 percent increase in first-quarter profit, topping analysts' consensus estimates by 3 cents, and said it was comfortable with earnings estimates for the second quarter.

Wednesday's losers

APW. (APW: up $0.29 to $9.60, Research, Estimates) The electronics manufacturing services provider said it plans to cut jobs and close some facilities and expects to take a charge of up to $66 million over the next five quarters for the restructuring.

Pre-Paid Legal Services Inc. (PPD: down $4.90 to $14.10, Research, Estimates) The company, which underwrites and markets legal service plans, said the Securities and Exchange Commission says its bookkeeping does "not conform to generally accepted accounting principles." PPD refuted that position.

Charter Communications (CHTR: down $1.42 to $22.44, Research, Estimates). The No. 4 U.S. cable television operator said it intends to offer for sale about $1.25 billion of Class A common stock and $500 million of convertible senior notes due in 2006. The offering by the company, which is controlled by Microsoft (MSFT: Research, Estimates) co-founder Paul Allen, would translate to some 52.4 million shares.

Ryland Group (RYL: down $4.30 to $50.16, Research, Estimates). Salomon Smith Barney downgraded the homebuilder and mortgage-finance company to "neutral" from "outperform." The investment bank also lowered its rating on Beazer Homes USA (BZH: down $4.55 to $61.50, Research, Estimates), another home builder, to "neutral" from "outperform." Other homebuilders that Salomon downgraded include Hovnanian Enterprises (HOV: down $1.41 to $17.79, Research, Estimates)  M.D.C. Holdings (MDC: down $3.40 to $36.50, Research, Estimates) and Schuler Homes Inc (SHLR: down $0.30 to $14.40, Research, Estimates).

Akorn (AKRN: down $1.35 to $1.74, Research, Estimates). The medical products maker said it expects to post a loss for the first quarter and is in talks with lenders for relief from debt covenants.

Applied Micro Circuits (AMCC: up $0.96 to $23.04, Research, Estimates); Vitesse Semiconductor (VTSS: up $1.84 to $31.30, Research, Estimates). Goldman Sachs downgraded the communication chipmakers to "market outperform" from "trading buy," citing high valuations and limited visibility.

360networks (TSIX: down $0.18 to $1.34, Research, Estimates). Goldman Sachs cut its rating on the fiber-optic network builder Wednesday after the company slashed cash revenue guidance for 2001 and said it will scale back its construction schedule because tighter capital markets have hurt demand. The company said Tuesday that by reducing its planned capital expenditures by more than $1 billion this year it will avoid breaching any of its debt covenants.

Sycamore Networks (SCMR: down $0.09 to $9.23, Research, Estimates). The maker of optical networking equipment reported a fiscal third-quarter loss late Tuesday, missing forecasts by a penny a share. The stock was also pressured by the 360networks news.

Check Point Software (CHKP: down $0.72 to $54.19, Research, Estimates). Lehman Brothers downgraded the Israeli maker of security software Wednesday to "buy" from "strong buy" and lowered the price target to $70 from $110.

Network Appliance (NTAP: up $2.15 to $24.68, Research, Estimates). The computer storage maker met lowered earnings and sales targets in its fiscal fourth quarter.

TriQuint Semiconductor (TQNT: down $0.96 to $25.04, Research, Estimates). The chipmaker said Tuesday it acquired Sawtek in a $1.3 billion stock swap deal.

Sprint (FON: down $0.16 to $21.42, Research, Estimates). Merrill Lynch cut the long-distance telephone company to "near-term neutral" from "near-term accumulate." Sprint late Tuesday cut second-quarter and 2001 profit guidance for its non-wireless operating group for the second time in a month, saying it expects to see continued higher bad debt from wholesale customers and reduced wholesale demand.

--from staff and wire reports graphic




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Contact Us Closed Captioning Manage Cookies+ Site Map

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.