Interest rates be damned -- stocks aren't flinching this morning.
At 9:05 a.m. EDT, the
futures were up 7.4 to 1347.6, about 7 points above fair value and indicating a strong open. That early strength, however, will have to hold up in the face of an all-but-certain rate hike at tomorrow's
Federal Open Market Committee
survey of 30 U.S. primary dealers shows everybody but
expects the Fed to raise rates by 25 basis points.
Nonetheless, emboldened by the benignity of the most recent
Producer Price Index
Consumer Price Index
, some in the market have been talking recently to the effect that the Fed will stand pat tomorrow. That view might be leading some to make bullish bets today.
But with so many market players on the sidelines or even out of town, the market may get tugged around in both directions by range-bound stock futures. "I see most of the day
range-bound between 1333 and 1352" on the September S&P 500 futures contract, said Chuck Farra, president of
. "If it goes through either of those, you may see an extra 5- to 10-point extension outside of that."
Farra said he doesn't expect much to happen until 2:15 p.m. EDT tomorrow, when the Fed posts any change it makes in interest rates. "There's not a lot of big bets going into today about which way the Fed's going to go tomorrow." Because of that, and depending on what the Fed does, Farra is looking for a big move up or down tomorrow as market players scramble to get back into the market.
In the meantime, keep one eye on the 30-year Treasury bond yield. Stocks have been reacting poorly lately whenever it's moved above 6%. The long bond was lately off 2/32 to 101 28/32, its yield rising to 5.989%.
For the second straight session in Tokyo, stocks benefited from the positive sentiment generated by Friday's news that
Industrial Bank of Japan
Dai-Ichi Kangyo Bank
will form a banking alliance that would boast assets of $1.3 trillion. The
advanced 135.44, or 0.8%, to 18,233.55.
Foreign buying in Japanese stocks helped bring the dollar as low as 110.77 midway through the trading session in Tokyo. The greenback was lately quoted at 111.11 yen.
It's still not clear exactly how much yen strength would provoke the
Bank of Japan
to intervene. Japan's Administrative Vice Finance Minister Nobuaki Usui told reporters today that premature yen strength could threaten Japan's nascent economic recovery, stressing the need for foreign-exchange stability and the
Ministry of Finance's
readiness to "take steps" if necessary. On television yesterday, however, Minister of Finance
downplayed the notion that speculators are the main cause of the yen's recent rise, suggesting that intervention may not be imminent.
Typhoon Sam kept stocks on a short leash overnight in Hong Kong, as the storm's aftermath kept the local market closed for the morning session. Stocks surged in sympathy with Tokyo when the afternoon session opened, but retraced their steps toward the close as investors took profits ahead of tomorrow's FOMC meeting in the U.S. The
picked up a scant 6.92 to 13,834.89.
Upbeat global sentiment -- something that has been fairly pronounced since the IBJ alliance was announced last week -- was taking all the big European bourses solidly higher toward midday. London's
was up 101.6, or 1.6%, to 6282.4, while the Paris
was 17.12 higher to 4489.12. Frankfurt's
was up 47.74, or about 0.9%, to 5301.88 amid a report in
were in talks to merge their retail operations.
Mergers, acquisitions and joint ventures
Continuing the consolidation trend in the world of utilities,
Carolina Power & Light
agreed to buy
for about $5.3 billion in cash and stock. The deal values Florida Progress at $54 a share, a juicy premium over its Friday closing price of 44 5/8.
in a stock swap valued at $608.4 million. Centura expects the acquisition to be accretive to earnings per share in 2001.
Transaction Network Services
in a deal it values at $720 million.
Peninsular & Oriental Steam Navigation
of Britain denied it received a buyout offer worth about $11 billion from
, the world's biggest cruise operator. P&O's comments rebutted a report in Britain's
Mail on Sunday
, which reported that P&O had rejected the bid.
Suez Lyonnaise des Eaux
United Water Resources
, the second-largest water distributor in the U.S., for $35 a share. United Water closed Friday at 31 1/16.
in a deal valued at $540 million.
for $21 a share in cash, a hefty premium to its close of 13 1/8 on Friday.
to buy from attractive.
Warburg Dillon Read
to buy from hold.
Warburg Dillon Read initiated coverage of
with a strong buy rating and a price target of 25. The stock closed Friday at 17.
to attractive from neutral.
set a multiyear pact valued at more than $400 million with
. The deal calls for
, AT&T's professional services division, to provide global networking management and standardize communications technology capabilities across AlliedSignal's infrastructure.
The Wall Street Journal
, citing people familiar with the matter, reported that law-enforcement authorities are probing whether
Bank of New York
was among a chain of banks that served as conduits for about $200 million that may have been diverted from loans to Russia made by the
International Monetary Fund