Toll Brothers Up on Strong Outlook

Procter & Gamble offers bullish forecast; American Express sees job cuts; plus more stocks in the news

Toll Brothers (TOL ) shares rose after the home builder reported fourth quarter EPS of $1.84, vs. $1.52 a year ago, on a 6.7% revenue rise. The company says the first three quarters of FY 02, while probably not another record, should be very strong. S&P maintains hold rating on the stock.

Calpine Corp. (CPN ) shares fell as UBS Warburg cuts its estimates and price target. The analyst, however, reiterated his strong buy rating, saying the recent decline is largely due to liquidity concerns, an article comparing CPN to Enron (ENE ) and renegotiation of power sales contracts with California. The power generation company held a conference call yesterday.

Utility-related stocks spanning all industry groups are under pressure as fallout from the Enron disaster continues. El Paso Corp. (EPG ) is now being scrutinized as credit agencies reportedly threaten downgrades.

Procter & Gamble (PG ) was trading higher after the company said it expects 2Q volume, sales, and EPS growth to be at upper end of prior guidance. S&P maintains an accumulate rating on the stock, while Lehman and JP Morgan upgraded the shares.

Shares of American Express (AXP ) fell after the financial services company offered a negative forecast. If current trends continue, it sees $0.34-$0.36 fourth quarter EPS from operations, at the low end of Street estimates. The company also will cut 5,500 to 6,500 jobs.

Merck & Co (MRK ) stock slumped after CS First Boston downgraded shares of the drug company to hold from buy. Lehman also cut its price target for the stock to $74 from $90. On Tuesday, the company forecast 2002 EPS growth to be at same level as in 2001.

Shares of Halliburton (HAL ) were down after Banc of America downgraded the stock to market underperform from market perform. The oil company is in the middle of ongoing abestos litigation.

Shares of Safeway (SWY ) were down after UBS Warburg downgraded the stock to reduce from from hold. Analyst Neil Currie says Kroger's move to aggressive sales-driven growth strategy increases risks of holding U.S. food retailers.

Oakley (OO ) was trading higher after it inked a new commercial deal whereby Luxottica will distribute Oakley eyewear at Sunglass Hut. It now sees 2002 revenues of $500M-$550M, and $0.77-$0.85 EPS.

S&P ties weakness in engineering/construction group to soft energy markets after Enron's bankruptcy and Calpine's possible renegotiation of California power contracts. S&P rates Jacobs Engineering (JEC ) a buy.

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