Drug Concerns Weigh on J&J

IMC Global sees a loss; Sharper Image holiday sales soar; plus more of today's stocks in the news

Johnson & Johnson (JNJ ) will change the European label of Eprex, its anti-anemia drug for chronic kidney failure, due to a blood disorder link. On Saturday, The New York Times reported that Eprex may be banned in Europe for certain patients. In about 160 cases, patients taking the anemia treatment actually developed a severe form of anemia. UBS Warburg is keeping its hold rating and S&P is keeping its accumulate rating on J&J shares. Meanwhile, CIBC World says the news surrounding Eprex is a positive for Amgen (AMGN ), which makes a rival drug called Aranesp.

IMC Global (IGL ) sees a six cent to eight cent fourth quarter loss from continuing operations, lower than prior guidance, and two cents earnings per share consensus. The company cites continued downward pressure on phosphate margins. S&P reiterates buy.

Sharper Image (SHRP ) says based on preliminary data, post-Thanksgiving holiday weekend comparable-store sales increased 27%, total store sales rose 41%, and Internet orders soared 81% vs. last year.

Wachovia downgraded SafeNet (SFNT ) and Internet Security Systems (ISSX ) to hold from buy, and downgraded NetScreen Technologies (NSCN ) to buy from strong buy.

Hedge fund manager Larry Feinberg is negative on pharmacy-benefit managers, which include Caremark Rx (CMX ): Barron's.

Nextel Partners (NXTP ) says Cascade Investment LLC, the private investment arm of Microsoft Chairman Bill Gates, bought an additional 3.75 million Nextel shares. The purchase raised Cascade's stake in Nextel to 5.2%.

Fertilizer company Potash (POT ) cut its $1.20 2002 earnings per share estimate to $1.00-$1.10 due to a poor fall season. S&P keeps hold.

SoundView reiterates its outperform rating on Zoran (ZRAN ), and raised its $17 target to $25. The company notes strong DVD sales.

Bear Stearns upgraded Intersil (ISIL ) to outperform.

A key machinists' union at UAL's (UAL ) United Airlines unit is set to vote Thursday on a wage-cut proposal. An earlier version of the proposal was voted down last week. The airline is attempting to win enough concessions from workers to stave off a bankruptcy filing. S&P reiterates avoid.

RBC Capital downgraded Trimeris (TRMS ) to sector perform from outperform.

JP Morgan downgraded Bowater (BOW ) to neutral from overweight.

CS First Boston cautions that a speedy resolution to Georgia-Pacific's (GP ) overall asbestos litigations are highly unlikely, and maintains its neutral rating.

Morgan Stanley upgraded the wireless industry to attractive from cautious, and says it believes AT&T Wireless (AWE ) is the best way to play the industry for 2003. The firm raised its price targets for AT&T Wireless and (Nextel )(NXTL ) shares.

Nokia (NOK ) shares rose after Merrill Lynch upgraded them to buy from neutral.

Lehman Brothers upgraded Intel (INTC ) to overweight from equal-weight. The firm also upgraded Advanced Micro Devices (AMD ) to equal-weight from underweight.

Wal-Mart (WMT ) reported record single-day sales for Friday, Nov. 29, of more than $1.43 billion billion at domestic Wal-Mart stores, Supercenters, and Neighborhood Markets, vs. $1.25 billion one year ago. Top sales categories were home electronics, small appliances, and toys.

Gap (GPS ) shares rose after Gerard Klauer reportedly upgraded to buy from netural.

CS First Boston upgraded Genzyme (GENZ ) to outperform from neutral.

RBC Capital downgraded EMC (EMC ) to sector perform from outperform.

Despite Krispy Kreme's (KKD ) recent sell-off, some analysts remain cautious about the company's prospects, pointing to a combination of a lofty p-e ratio and the potential for slowing same-store sales, according to an article in Barron's.

Potash Corp. (POT ) cut its $1.20 2002 earnings per share estimate to $1.00 to $1.10 due to a poor fall season.

Morgan Stanley upgraded Fifth Third (FITB ) to overweight from equal-weight. The firm downgraded U.S. Bancorp (USB ) to equal-weight.

Overture Services (OVER ) says its existing contract with Freeserve, a U.K.-based Internet service provider, has been automatically renewed under terms of an agreement until February, 2003.

Bayer (BAY ) says a new 10-week study of oral investigational drug Levitra showed 92% of men with symptoms of erectile dysfunction reported improvement. Bayer and GlaxoSmithKline (GSK ) have a co-promotion and co-development deal for Levitra.

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