The market opened sharply down this morning. Futures have been see-sawing through the red after falling off of initial flatness. A lack of economic news ahead of next week's interest rate decision should keep investors scrambling for footing, while bad news on
and weakness in
before the open may put a crimp in technology.
At 9:22 a.m. EDT, the
S&P 500 futures
were down 9.3 points, almost 9 points below fair value and indicating some selling pressure at the open. The
futures had plunged down 53.7 points, indicating a selloff at the open.
Wireless firm Motorola should receive some blows this morning after
Salomon Smith Barney
downgraded the company, saying it was not going to be able to meet projected growth.
Meanwhile, tech network king Cisco was taking futures down in preopen trading, having reported strong earnings and revenues after last night's close.
"Cisco is trading down before the bell on worries that the earnings picture going forward might be drastically different, especially if there is a slowdown in PC demand," said Phil Ruffat, vice president of
"There was a big hedge fund that started selling slowly this morning. I think he's pushed the market down, got a lot of people scared. Futures might sink down to the 3300 level this morning," Ruffat said.
Cisco, with one of the highest market capitalizations in the world, reported accelerating revenue growth and earnings above street estimates for the ninth consecutive quarter. Concerns over the company's valuation made an ugly dent in the
Nasdaq Composite Index
Monday and put pressure on tech Tuesday ahead of the earnings report.
Cisco industry mates, including
, could move on that news as well.
Meanwhile, there are
some more big earnings reports to consider
, among others. Unilever earnings just came in ahead of street estimates.
Most investors don't want to dive headlong into this kind of a market yet. With volume wallowing at year lows and sapping liquidity, stock moves are pretty unpredictable. There is some talk that such pathetic volume, which has plagued the market for the past three weeks, could be a sign of more than just jitters and caution ahead of next week's rate decision. It might mean that the market is dancing on the edges of dreaded bear territory. For more on this, see David Gaffen's recent
And, of course, rate hikes still loom. After weeks of hot data, most market observers think that a 50-basis point hike at the
May 16 meeting is certain. April import-export earnings, retail sales and the
Producer Price Index
will be released on Thursday and Friday and, while these numbers are unlikely to change many minds, the market may still be clinging to that hope. And no one really knows what to expect from the Fed during the remainder of the year.
"We're in an information void and we need the catalyst of the Fed's action for things to stabilize. I think people aren't at work to buy they're at work to sell. Not a whole lot of people are going to throw money at the market until this stuff is resolved," said Todd Clark, head of listed trading at
Meanwhile, another tech mammoth may send a ripple through the market late today.
is scheduled to submit a remedy plan today, after the government announced two weeks ago that it wants to split up the company. Microsoft could offer some of the same solutions it mentioned in earlier negotiations with the government, like opening up pricing and offering to remove Internet Explorer from future Windows applications.
New York Stock Exchange
is talking of teaming up with bourses in Canada, Europe and Latin America, though nothing's been settled yet. Last week, Nasdaq announced plans to get together with London and Frankfurt exchanges.
The bond market was bouncing off of earlier weakness this morning, with the 10-year note up 5/32 to 99 31/32 and yielding 6.503%.
The large European bourses were
mixed near midsession. Paris and Frankfurt bourses were listlessly lower on media and telecom sector losses and fears of aggressive rate hikes in the U.S., with the Paris
down 61.47 to 6308.14 and Frankfurt's
off 100.77 to 7179.77.
Across the Channel, London's
was falling off of earlier strength from drug, bank and other stocks as U.S. futures weakened. The FTSE was up just 1.5 to 6125.3.
The euro was trading up at $0.9108.
The majority of
Asian markets slipped lower overnight on renewed Nasdaq losses and fears of more aggressive interest rate tightening in the U.S.
index fell 283.98 points, or 1.9%, to 14,492.92.
Tokyo stocks fell to a new six-month intraday low after recent data showed that foreign investors sold off a net 846.27 billion yen ($7.8 billion) worth of Japanese stocks last month, a reversal from net purchases in March. But the
was able to recover some of that ground by the close, ending down 143.07 points to 17,701.
Euro gains against both the yen and the dollar overnight boosted the greenback up against the yen to 109.42. The greenback was lately losing some of that strength at 109.05 yen.
For a look at stocks in the news, see
Stocks to Watch , published separately.