GO
Loading...

Morgan Stanley Says Business Travel Suffering

Thursday, 29 May 2008 | 9:03 AM ET

Dollar stronger again; bond rout continues. Stock futures dropped a bit as GDP revision came in in-line, up 0.9 percent from 0.6 previously.

Morgan Stanley out with a long note on business travel this morning, not surprisingly with the title, "Business Travel Fundamentals Worsening." A summary:

1) room rate renegotiations, which first surfaced with financial business travelers, is now spreading to other sectors;

2) group cancellation rates are increasing.

3) rising airfares, already impacting leisure travel, will impact corporate travel this year.

They cut their ratings on Marriott , and reduce the price target to $40 from $47. Marriott closed at $34.14. They go further: "...we do not recommend putting new money into lodging with the exception of stocks with unique catalysts."

Elsewhere:

1) We have been getting retail earnings reports for the past week, with mixed results.

a) Men's Wearhouse reported earnings a bit below expectations, and guidance for the quarter and full year appears a bit below expectations as well. Down 6 percent pre-open.

b) Big Lots and Costco beat expectations; Big Lots up 8 percent pre-open as they raise their full year guidance slightly. Costco reported good comp store sales growth--U.S. up 6 percent, international up 16 percent.

2) NYSE IPO: Safe Bulkers (SB), a marine drybulk shipping company, priced 10 million shares at $19, below the expected range of $20 to $22 a share.

3) German chip maker Infineon down about 12 percent pre-open, after they lowered their outlook for their communications unit.


Questions? Comments? tradertalk@cnbc.com

  Price   Change %Change
BIG
---
COST
---
IFX
---
MAR
---
MW
---

Featured

  • A CNBC reporter since 1990, Bob Pisani covers Wall Street from the floor of the New York Stock Exchange.

Wall Street