Stocks are leaning toward another precariously positive opening this morning.
Today we'll see the market, at least in terms of its major proxies, continue to try to work out its rather curious technical position. The
Dow Jones Industrial Average
closed yesterday at 10,524.07, its lowest level since June 11, and tantalizingly close to the bottom end of the trading range it's been in since April. The
Nasdaq Composite Index
, on the other hand, is just 1% off its all-time high, as investors' anxiety over the rising yen, interest rates and corporate earnings seem to be causing them to hug big-cap technology names all the harder.
There's been nothing curious about the broader market, though. Breadth has been
horrible for weeks.
But most people are watching the Dow right now as it tests its key support at 10,500. While technical analysis takes much, much more than its fair share of ridicule from fundamentalists, nice round numbers like this one do carry some psychological weight. The Dow passed its first test yesterday, bouncing strongly off the 10,500 level. But with sentiment still shaky, there's a good chance we may visit that proving ground again.
In the meantime, stocks are poised to show some strength early on. At 9 a.m. EDT, the
futures were up 6.2, about 3 points above fair value and indicating a positive open. The 30-year Treasury was lately up 1/32 to 100 17/32, its yield rising to 6.086%.
"It looks like this thing could take off today," said Ed Basile, director at
Warburg Dillon Read
in Chicago. Basile said that he sensed so much negativity during a recent trip to Wall Street that he's expecting a solid contrarian bounce. "Everyone's been so bearish. We're going to go the other way and say, 'Hey, you can't be bearish forever.'"
Specifically, Basile is looking for the S&P 500 futures to rally as far as 1351, which is where the December contract stood at Friday's close.
In corporate news, news that Internet service providers are
are merging may shake up the Net sector with expectations of future consolidation.
No major economic data are forthcoming today. This morning, the
released figures showing
initial jobless claims
at 272,000 for the week ended Sept. 18, down from a revised 289,000 the week before and the lowest level since Jan. 5, 1974. At 10 a.m., we'll get the August
Help Wanted Index
, one of the lower-profile reports that
is known to watch.
After putting together the biggest one-day
drop of the year yesterday, Japanese stocks took the day off in celebration of the autumnal equinox. But, as Finance Minister
has noted, there is no holiday for the foreign-exchange markets. The yen held its latest gains against the dollar, which fell below the 103.5 yen level overnight.
The greenback was lately quoted back up at 104.36 yen, though, fractionally above yesterday's New York close.
Still, some nonchalant comments yesterday from a couple of notable dignitaries may be ameliorating any hesitation traders are feeling about holding long yen positions into this weekend's
meeting. At a news conference,
International Monetary Fund
Chief Economist Michael Mussa said that "the yen is today about where it should be." Meanwhile, New York
President William McDonough told reporters that "the present level of the dollar is not one that is a problem for the American economy."
In Hong Kong, stocks steadied themselves from yesterday's selling, enduring a mixed session. The
added 26.82 to 13,214.44.
The Taipei stock market remained closed for the third-straight day following Tuesday's massive earthquake. Taiwanese stocks will start trading again Monday.
The big European indices were on fire at midday. London's
was surging 91.1, or 1.5%, to 6005.0, while Frankfurt's
was up 71.22, or 1.4%, to 5309.98. Amid news that consumer spending increased 3.1% in August after a 6.8% jump in the previous month, the Paris
was up 33.21, or 0.7%, to 4601.33.
Thursday's Wake-Up Watchlist
Mergers, Acquisitions and Joint Ventures
EarthLink and MindSpring announced merger plans, creating a company that would have a combined market cap of $3 billion. According to the deal's terms, MindSpring holders would receive 1 share of the new company for each of their shares, while EarthLink holders would get 1.615 shares for each of their shares. In premarket trading, EarthLink was up at 46 from yesterday's closing price of 43 8/16, while MindSpring was down at 29 from Wednesday's closing price of 32 14/16.
announced its plans to acquire
space division for $191 million.
said it plans to pay $24.50 per share to buy
has forged a solid agreement with
, a merger that would generate $12.4 billion in revenue.
Earnings/Revenue Reports and Previews
warned investors that it would post third-quarter earnings between 17 cents to 21 cents a share, greatly missing the nine-analyst estimate of 28 cents. The company blamed the disappointing results on softness in oil and gas markets.
Bed Bath & Beyond
posted second-quarter earnings after yesterday's close of 23 cents a share, beating both the 17-analyst estimates of 22 cents and the year-ago 18 cents. Last night,
reported the story.
posted third-quarter earnings of $2.20 a share, beating both the 11-analyst estimate of $2.01 and the year-ago $1.10.
reported first-quarter earnings of 75 cents a share, easily beating the five- analyst estimate of 49 cents but down from the year-ago $1.17.
sliced its rating on
to a neutral from attractive.
Warburg Dillon Read
upped its average oil-price estimate to $17.60 per barrel for 1999 and to $18.50 from $17 per barrel for 2000.
Morgan Stanley Dean Witter
upped its rating on
to a strong buy from outperform.
Offerings and Stock Actions
In premarket trading,
was up to 27 1/2 from Wednesday's closing price of 24 3/8. Yesterday, the company announced voter approval for its proposed merger with
and said it would take Frontier's place in the
division has filed an IPO for $57.5 million of Class A common shares.
said this week's earthquake in Taiwan would not hurt its operations. The company said that its manufacturing hubs were in the Philippines and South Korea.
said that its supervisory board would convene Friday to devise a restructuring plan that would include axing four of its 17 board members. According to media reports, the automaker would let go of North American President Thomas Stalkamp, while retaining CFO Manfred Gentz, a source confirmed in an interview with
unveiled plans to broaden its intra-European services, adding more cargo flights and a new overnight delivery service,
The Wall Street Journal
reported. According to the
, FDX plans to centralize its operations in Paris.
Johnson & Johnson
received kudos from 10,830 online survey participants as the American company with the best corporate reputation,
The Wall Street Journal
was charged yesterday with deceptive trade practices, civil theft and racketeering by the Florida Attorney General's Office for allegedly billing patrons different prices for the same prescription drugs.