After last week's run of record gains, it was inevitable that the Dow Jones Industrials (^DJI +1.79%) would find an excuse to put in a more substantial drop. Yet no one expected that excuse to come from the small island nation of Cyprus, where a banking crisis ignited huge amounts of controversy when a bailout plan included provisions that would force depositors to accept a haircut on their savings. Nevertheless, after rebounding from a 100-point opening loss all the way to a small gain in the early afternoon hours, the Dow gave up ground and ended down 62 points. Broader markets saw similar declines.
Hewlett-Packard (HPQ +0.81%), however, finished higher by nearly 3%. Even as shipments of PCs industrywide appear to be dropping in the first quarter, Hewlett-Packard got an upgrade from Morgan Stanley, with analysts expecting that HP's free cash flow to rise beyond company expectations. Cutting back on capital expenditures, squeezing out more worker productivity, and taking advantage of faster cash conversion could add up to a 33% boost above HP's initial cash-flow projections. Such a move would enhance profitability and show that CEO Meg Whitman's turnaround is working.
Verizon (VZ 0.49%), meanwhile, rose 1.5% on continued speculation that it may try to buy out Vodafone (VOD 1.40%) and its 45% stake in their Verizon Wireless joint venture. Yet in more interesting news from over the weekend, Verizon said it wants to pay fees for television channels it delivers to subscribers based on what those subscribers actually watch. The novel approach could become a bridge to a-la-carte pricing, although the company's TV-pricing negotiator emphasized that the move wouldn't lead to lower costs for FiOS customers.
Outside the Dow, San Juan Basin Royalty Trust (SJT 0.42%) fell 2.4% after announcing that it won't make a cash distribution in March. The royalty trust has paid monthly dividends throughout its existence, but March represents the second time in six months that San Juan has chosen not to make a payment. With winter weather and higher-than-expected capital costs weighing on cash flow, San Juan had to disappoint its unitholders by holding back on its payout.
