A drop in the Brazilian stock market stymied what looked like it would be an upbeat open.
With Sao Paulo investors increasingly nervous about the continued decline in Brazil's currency, the
shed 4.4% in early trading. And as the Brazilian market dropped, so did U.S. stock-index futures. At 9 a.m. EST, the
futures were off 7.8, about 4 below fair value and indicating a negative open.
But while the trouble in Brazil may be the catalyst for the selloff in the futures, for some a drop in the market was just an accident waiting to happen.
"I don't know why they had them bid up," said Todd Clark, head of listed trading at
, who views yesterday's reversal, particularly in tech issues, as indicative of trouble. "That kind of action is the earmark of a market that needs a pause. The thing just needs to cool off a bit."
A common notion on Wall Street, it turns out.
"It looks a little lower," said Bryan Piskorowski, market analyst at
. "But when you consider the advance we've had, how much better can we do?"
Morgan Stanley Dean Witter
has said that the end is nigh for Internet stocks.
"I promise you that like all bubbles, this bubble will come to a very bad end," the strategist said in a Tokyo speech, noting that the gold and biotech bubbles lasted about 100 days, and that the current rise in Internet stocks is 101 days old.
The weakness in stocks was lending Treasuries a bit of strength. The 30-year was up 16/32 to 101 23/32, dropping the yield to 5.14%.
Japanese stocks saw a second day of big gains, this time on the back of rallying bank shares. With recent announcements of a merger between
and an alliance between
as well as reports that
is on the block, investors are beginning to sense that the long-awaited bank shakeout is at hand. Helping fuel that sentiment,
Financial Revitalization Commission
strongly suggested that banks restructure.
Also helping stocks were hopes -- well-founded, it turned out -- that Biggs would have positive things to say about Japanese stocks in his speech. "In a very expensive world, we find that Japan is a value," he said, going on to say that, of the major markets, Japan looks the best over the next three to five years.
climbed 217.37, or 1.6%, to 14,245.42.
It has become clear that Hong Kong bank loans to ailing Chinese companies will not be repaid, and that weighed heavily on the island's market today. The
dropped 266.34, or 2.6%, to 10,048.57.
Europe's markets were mixed. In Frankfurt, the
was up 17.4 to 5160.46. In Paris, the
was down 49.05 to 4140.96. And in London, the
was down 40.2 to 6065.4.
Thursday's Wake-Up Watchlist
(Earnings estimates from
, parent of
, said last night it has expressed interest in buying
America West Airlines
broke the story
Internet search-engine company
is seeking a media or telecommunications company to become a strategic partner by taking up to a 20% stake, one of the company's execs told the
. Eric Gerritsen, Lycos vice president for international business development, told the newspaper that Lycos wasn't pondering selling all of its business like
. The newspaper said Gerritsen confirmed that Lycos had entered into "informal discussions" with media and telecommunications companies -- Gerritsen wouldn't discuss the companies involved -- regarding having them make an investment of up to $1 billion.
posted fourth-quarter earnings of 62 cents a share, beating the 20-analyst view of 57 cents, but down from the year-earlier $1.00.
reported fourth-quarter earnings of 31 cents a share, in line with the 10-analyst estimate, but down from the year-ago 37 cents.
posted earnings of $1.35 a share, excluding charges, above the 15-analyst view of $1.27 and up from the year-earlier $1.27.
posted first-quarter earnings of $1.05 a share, excluding charges, beating the 27-analyst outlook of $1.01 and up from the year-ago 86 cents.
posted fourth-quarter earnings of $1.16 a share, beating the 15-analyst view of $1.11 and up from the year-ago 97 cents.