With bonds, European markets and index futures all under heavy selling pressure, stocks look like they're going to take some lumps this morning.
There is also a good deal of nervousness ahead of the July
Purchasing Managers' Index
, due out at 10 a.m. EDT. The consensus estimate in the
poll calls for the PMI to come in at 55.7, down a bit from the previous month. But because the Chicago index came in so strong on Friday, traders worry that the national index will top forecasts. And even if it comes in relatively well, it would be hard to turn around the bearish mood in the bond market.
"The mood in the bond market is pretty bad," said Charles Farra, president of
. "The PMI would have to be a real shocker in terms of a weak number to make that turn around."
But Farra thinks that unless the bonds get hit real badly, the
futures should be able to weather the storm. "I don't know how bad the S&Ps are going to get hit because of the bonds. We're getting down to levels where more downside is going to be hard. You're probably going to have some early weakness, but I wouldn't be surprised if the market does rebound into the early afternoon."
At 9 a.m. EDT, the
futures were off 0.2, more than 3 below fair value and indicating a negative open. The 30-year Treasury was off 26/32 to 87 17/32, pushing the yield to 6.17%.
With traders worrying over the latest declines in New York and the continued weakness of the dollar, Tokyo stocks eased a bit. The
slipped 36.16 to 17,825.7.
Expectations (later fulfilled) of a strong profits report from index-heavyweight
overcame Wall Street worries in Hong Kong. The
added 248.57, or 1.9%, to 13,435.43.
HSBC reported first-half profits of $4.07 billion, more than $500 million better than the median estimate.
In Europe, stocks were having a tough time of it after purchasing managers' reports there came in stronger than expected. That renewed fears that interest rates in the eurozone and the U.K. will head higher next year and put pressure on bond markets.
Frankfurt shares were off, with
continuing to take heavy hits on its recent earnings disappointment and the growing perception that the company is more Chrysler than Daimler. The
was off 103.73, or 2%, to 4998.14.
In Paris, the
was off 81.9, or 1.9%, to 4300.16.
was down 44.3 to 6187.6.
Monday's Wake-Up Watchlist
Earnings/revenue reports and previews
(Earnings estimates are from
posted earnings from continuing operations of 21 cents a share, which matched the four-analyst estimate of 27 cents with the inclusion of 6 cents of earnings from discontinued operations. The company earned 11 cents a year ago. The company's board also decided to separate AutoNation's automotive rental division from the company and "is exploring various strategic alternatives" on the form of a separation. AutoNation's automotive rental division includes
National Car Rental
Alamo Rent-A- Car
. The board also authorized the repurchase of an additional $500 million of stock. The company announced that Michael E. Maroone, formerly president of AutoNation's
Automotive Retail Group
, has been named president and chief operating officer of AutoNation, succeeding John H. Costello, who has resigned.
posted second-quarter income from continuing operations of 11 cents a share, up from the year-ago earnings of a penny a share. The six-analyst estimate called for earnings of 11 cents.
said its fiscal 1999 results, slated to be released on Sept. 1, will be sliced by special fourth-quarter charges totaling $116.8 million pretax, or $77.4 million after tax. The company said it will depart the mainframe outsourcing and professional services businesses conducted at its
Litton Enterprise Solutions
warned it expects second-quarter earnings to be "significantly lower" than the current two-analyst estimate of 7 cents a share. The results will be released on or about Aug. 12, the company said.
reported second-quarter earnings of 22 cents a share, in line with the 22-analyst estimate, but down from the year-ago 26 cents.
Mergers, acquisitions and joint ventures
Fidelity National Financial
for $1.2 billion, or $52 a share in cash and stock. The $52 price for each Chicago Title share represents a 42% premium to the closing price of Chicago Title's stock on Thursday, the day before the companies announced they were holding talks.
Warburg Dillon Read
to strong buy from hold.
Credit Suisse First Boston
initiated coverage of
with a hold rating.
Morgan Stanley Dean Witter
to neutral from outperform.
has bought the rights to sell
antibiotic for $90.5 million plus sales performance milestones that, if achieved, would bring the total value of the deal to $158 million.
U.S. Postal Service
said they reached an agreement to resolve a postage-metering lawsuit filed by Pitney Bowes, under which Pitney Bowes will receive $51.75 million from the postal service.
said it will cut up to 1,400 jobs at its headquarters by Oct. 31, in a move to trim expenses. The cuts will not affect the retailer's hardware or department stores.
today will disclose its plans for a microprocessor with a radical new architecture designed to handle complex graphics, voice and video, challenging
and other chipmakers in the fast-growing market for communications and media-processing chips, according to an article in
The Wall Street Journal
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