It's going to be touch-and-go for the stock market this morning.
With yesterday's selling looking to extend into this morning, the market looks like it may again touch levels that technicians consider significant. At 9 a.m. EDT, the
futures were off 5.1, having closed yesterday near fair value. That puts them at 1297.9. Thursday's low of 1292 is thought to be key support. If the futures break through that level, things could get ugly.
Beyond that, the next major support is seen around 1275 on the S&P 500 cash index -- a level that is absolutely crucial, according to Charles Farra, president of
. "We've had a pretty decent correction in the last couple of weeks," he said. "For it to stay just a correction, the S&P needs to stay above the 1275 area. If it breaks below, you're going to see some pretty significant selling."
"I'm not going to say if we crack through or not," said Farra. "But if you see it cave through, it's going to be more than a correction. I think we'll go negative on the year."
beginning its quarterly bond auctions today, the debt market is coming under a bit of pressure. The 30-year was off 7/32 to 86 16/32, putting the yield at 6.26%.
More signs of recovery in Japan helped Tokyo stocks edge higher. June
rose 6.3% -- well above the 1% gain economists surveyed by the
Nihon Keizai Shimbun
expected. But the report strengthened the yen, too, and that muted the gains in the stock market.
added 11.64 to close at 17,202.09.
Worries about U.S. interest rates, Sino-Taiwanese tensions and heightened expectations that China will devalue the yuan next year are the reasons Hong Kong traders are still giving for the declines in stocks there. Maybe so. But with the benchmark
index up about 30% for the year -- even with the recent declines -- stocks have earned the right to consolidate a bit. The Hang Seng dropped 348.76, or 2.7%, to 12,596.71. Interest rate-sensitive index heavyweight
With local bond markets getting thumped and a lower open in the U.S. beckoning, Europe's major bourses were in the red.
Germany's trade surplus more than doubled in June, and that's pressuring bunds and, by extension, stocks. In Frankfurt, the
was off 65.12, or 1.3%, to 5022.18.
In Paris, the
was down 31.79 to 4261.11.
was down 79.2, or 1.3%, to 6047.2.
bucked the trend, rising 1.8% after its second-quarter results roundly beat expectations.
Tuesday's Wake-Up Watchlist
of France and
of Switzerland said they are in merger talks, confirming a report in
The Wall Street Journal
that suggested the three could be planning a merger to create an aluminum-and-packaging behemoth to rival
agreed to acquire
International Network Services
in a deal valued at $3.7 billion. Each International Network share will be converted into 0.8473 Lucent share. At yesterday's prices the takeover is valued at about $3.7 billion, or about $54 an International Network share, Lucent said. International Network closed yesterday at 47 7/16.
posted second-quarter operating earnings of 31 cents a share, which excludes a litigation-settlement charge of 3 cents, ahead of the
17-analyst estimate of 28 cents and up from the year-ago 23 cents.
Mergers, acquisitions and joint ventures
in a deal valued at about $677 million.
advances for the second time at a meeting on Monday.
Earnings/revenue reports and previews
(Earnings estimates are from First Call.)
posted second-quarter earnings of 15 cents a share, in line with the 14-analyst estimate and up from the year-ago 12 cents.
Polo Ralph Lauren
posted first-quarter operating earnings, excluding a charge, of 28 cents a share, ahead of the 14-analyst estimate of 24 cents.
Standard & Poor's
will be added to the
, which is being bought by
. The change will occur after the close of trading Thursday.
will offer free Net access for consumers who buy special long-distance calling services. The company said for a flat rate of $24.95 a month, the package features free, unlimited dial-up Net service and 250 minutes of domestic long-distance calling service. The move comes a day after
, a rival, cut evening, overnight and weekend calling rates to as low as 5 cents a minute.
to attractive from neutral.
Morgan Stanley Dean Witter
analyst Mary Meeker was out with positive comments on