Stocks look ready to trip down off of two-week highs at the open this morning and futures are solidly in the red.
At 9:10 a.m. EDT, the
S&P 500 futures
were down 11.6 points, over 13 points below fair value and a sign of some selling in the early going. The
futures were off 69.5 points, indicating an early flurry of selling in large-cap technology stocks.
After some cool inflation data gave it wings, the market rallied for three straight days ahead of Tuesday's interest-rate increase and closed higher yesterday on its fourth day of gains. But considering the
Federal Open Market Committee's
comments on the economy, released with the rate decision yesterday, inflation fears have not been squelched.
With characteristic flair, the FOMC said, "The Committee is concerned that this disparity in the growth of demand and potential supply will continue, which could foster inflationary imbalances that would undermine the economy's outstanding performance."
And so, with the rate increase and usual post-boost rally out of the way, the market may be ready to take some profits and run. At the close yesterday, the
had bumped back up about 12.4% from last Wednesday's close, when it almost met its April 14 lows for the year. The
Dow Jones Industrial Average
was up 5.5% from last Wednesday's close and the
had risen 6%.
Meanwhile, many investors are still playing it safe on the sidelines and anemic volume got only a mediocre boost yesterday.
Most market observers seem to think that the market will trade in a pretty narrow range until it gets direction from further data. It is impossible to predict where the market as a whole will go, they say, so it looks like a stock-pickers market.
Thats a good sign for value investors. Although lately the
S&P Value Index
has been out-performing the
S&P Growth Index
since March 27, it took a pretty decent beating in the year previous to that.
Stocks to watch today include
. Lycos agreed to be bought by Spain's
for $12.5 billion last night, the largest-ever combination of a telecom company and Internet portal. Terra's shares were falling this morning on fears that it would not be able to meet its growth prospects. Lycos will also report earnings today.
Another hot-stock is chip-maker
, which reported strong earnings this morning.
is also in the news after announcing that it has selected the head of
Philip Morris' Kraft Foods
unit, Robert Eckert, to succeed Jill Barad as CEO.
Other companies to report earnings today include
The Treasury market was losing ground this morning, and the 10-year note was off 7/32 to 100 9/32 and yielding 6.458%.
European bourses were trading down after yesterday's rate increase in the U.S. failed to appease interest-rate jitters, and telecom and tech shares were leading the indices down. The Paris
was 115.48 lower to 6441.91, while Frankfurt's
was off 145.80 to 7225.26. In London, the
lost 108.6 to 6209.8.
The euro was trading down at $0.8961
Asian markets closed lower overnight on confusion over yesterday's 50-basis point rate increase.
index shed 332.48 points, or 2.2%, to 14,827.81, dragged down by index heavyweight
index rose 357.92, or 4.1%, to 9085.74 after president-elect
announced he wouldn't incite aggression toward China during his inaugural speech over the weekend.
In Tokyo, the
index fell 147.22 points to 17,404.03.
The dollar slipped to 109.19 yen in Tokyo trading after the
Ministry of International Trade and Industry
revised its March estimate for industrial output upward. The greenback was lately sitting at 109.62.
For a look at stocks in the preopen news, see Stocks to Watch, published separately.