It looks like a touch-and-go morning for stocks ahead of the results of today's
Federal Open Market Committee
At 9 a.m. EST, the
futures were down 2 to 1433, near fair value and indicating a flattish open.
The FOMC meeting, now underway, is the day's guiding event, though there's not much mystery about its outcome. Wall Street knows it won't be getting another rate hike from the Fed this Christmas, as Y2K liquidity concerns are all but certain to stay
hand this time around.
The real speculation concerns the Fed's policy bias. About two-thirds of the primary dealers polled by
expect interest rates to go up when the FOMC meets in February, and are looking for the Fed to telegraph that move by assuming a tightening bias. But there are also
questions about whether the FOMC will issue a statement clarifying the meaning of its policy bias, or possibly even scrap it entirely.
"I think you'd definitely see a tempering of the market" if the Fed were to announce a bias toward tightening," said Doug Myers, vice president of equity trading at
in Atlanta. "As it stands now, you've got relatively cheap and easy money. If you put the brakes on that, things will tighten up."
"Whether that portends for a market downturn, I don't know," he continued. "All traders have a 7-minute time frame."
The Fed will announce any changes it makes to monetary policy at about 2:15 p.m.
The bond market was bouncing from
yesterday's selloff, which chased the 30-year Treasury to its highest closing yield of the year. The long bond was lately up 6/32 to 96, putting the yield at 6.428%.
The large European bourses were all lower in early afternoon trading. The Paris
was down 24.27 to 5496.84, while Frankfurt's
was 38.90 lower to 6339.76. London's
was down 27.6 to 6703.6.
The euro continues to slosh around just above parity with the dollar, lately trading at $1.01.
The European currency was unable to garner support from the
economics institute's forecast that Germany's economy -- the largest in the euro-zone -- would grow by 2.7% in 2000, well above this year's pace.
Meanwhile, European statistics agency
said that euro-zone consumer prices in November rose 1.6% on a year-over-year basis, the highest jump in two years. But
European Central Bank
Frankfurter Allgemeine Zeitung
that "we are at present certain that the inflation rate in the medium term will remain below the upper limit we have set of two percent."
In Tokyo, caution ahead of today's FOMC meeting put pressure on Japanese stocks, with the
sinking 95.11 to 18,080.38.
The yen's strength continues to cap the upside on Japan's export-oriented stocks. The dollar hovered around 102.50 yen for most of the Tokyo session before falling back some. The greenback was lately sitting at 102.09 yen.
Equities turned in a mixed performance in Hong Kong, where the
inched up 36.35 to 16,248.74.
Tuesday's Wake-Up Watchlist
Mergers, acquisitions and joint ventures
said it entered a strategic alliance with
, which provides high-speed Internet access over cable lines, to speed up its network. Road Runner is a joint venture between
Media One Group
and closely held publisher
. Road Runner will use Akamai servers in its network to improve the speed of its Web sites..
network said it completed a series of new long-term affiliation deals for
that it expects could bring in more than $1.5 billion in subscriber fees over the next 10 years,
The Wall Street Journal
said it formed a cooperative agreement with
, including supplying engines and transmissions to GM and joint cooperation in technology. Honda said the agreement would not involve the automakers taking any equity stake in each other.
said it agreed to buy privately held meat and poultry processor
Corporate Brand Foods America
for $261 million. IBP said it expects the acquisition to be dilutive to 2000 earnings by 7% to 10% a diluted share. The current seven-analyst estimate calls for earnings of $2.71 a share.
and venture capital firm
have teamed up with a cluster of sports stars including
to form an online sporting goods store.
, as the venture will be known, expects to start selling sporting goods on the Internet next month, and has plans to go public next year. MVP.com will receive $85 million in advertising from CBS over four years.
Additionally, MVP.com said it will acquire
, an Internet sports media company and publisher of
. The companies signed an agreement for a 10-year relationship where SportsLine will receive a $120 million in guaranteed cash payments over 10 years and receive an equity interest in MVP.com.
said it will sell its Austrian-based plastics extrusion systems unit to
for $47 million in cash. Milacron said the deal will result in a gain of 30 cents a share.
said it will buy
for $285 million.
Earnings/revenue reports and previews
reported third-quarter earnings of 9 cents a share, which includes $799,000 in preferred dividends. The four-analyst estimate was for 13 cents a share, while the year-ago earnings were 19 cents a share. Emmis also declared a 2-for-1 stock split.
Offerings and stock actions
announced last night that it has set a 2-for-1 stock split.
Credit Suisse First Boston
raised its 2000 earnings-per-share estimates on
to 40 cents from 35 cents.
will move to the
New York Stock Exchange
on Jan. 3. Qwest will trade under the stock symbol Q.
The Heard on the Street column in the
takes a look at at a two-sided investment strategy known as a "paired trade," aimed at profiting from valuation gaps between two related securities. The latest such pairing to pop up is that of
. In this case, investors are buying shares of Williams, while shorting, or selling, its telecommunications offshoot. The hope is that Williams' management will unlock the hidden value in its energy assets by potentially spinning off its Williams Communications shares.