It looks like the market is going to move a bit higher in the early going.
At 9:05 a.m. EST, the
futures were up 4, about 3 points above fair value and indicating some buoyancy at the open. Be careful, though. It hasn't paid lately to trust the early moods of the market, and more specifically of the technology sector, where all the momentum has been. A futures-led buying spree at the open turned tail quickly on Tuesday morning. And yesterday, improbably enough to some, large cap tech stocks managed to stage another rally after selling off initially on a hotter-than-expected core
Producer Price Index
In other words, it's been extremely difficult to predict the movement in tech recently, even though that movement has been virtually unidirectional. At record highs, indices are perpetually encountering key resistance levels, just as every level is key support when the bungee cord snaps -- a feeling tech shorts have been getting more and more accustomed to in the past week.
This morning, a bullish research note by
on the semiconductor industry was helping tech stocks get bids. Merrill, which said it thinks a three-to-five year upturn in the chip industry is beginning now, isn't exactly ahead of the curve on this one -- the
Philadelphia Stock Exchange Semiconductor Index
is up nearly 30% since Oct. 27.
Outside of tech, the biggest corporate news on the Street this morning isn't positive.
cut its 1999 earnings target again last night, and that could put some of the recently alleviated pressure back on the big financial stocks.
covered Bank One's warning in
a story last night.
There aren't any major economic data on the slate for today. That's a good thing, since the bond market is closed today for Veterans' Day. Tomorrow the bondsmen return to weigh the October
report and preliminary third-quarter productivity figures.
"It's going to be relatively quiet," said Bill Meehan, chief market analyst at
. "And I think we'll end on a pretty decent note. Enough traders are going to want to get long and stay long into tomorrow's productivity number."
European indices were moving higher in early afternoon trading, with telecom issues flying high after
The Wall Street Journal
is considering a $100 million hostile bid for Germany's
. The London
was up 77.1, or 1.2%, to 6524.1, while Frankfurt's
was 19.45 higher to 5761.87.
was continuing its astonishing push into record territory, lately up 61.53, or 1.2%, to 5113.36. The CAC has closed at a record high for each of the last eight sessions.
Asian markets were split overnight. In Hong Kong, the
was also feeling the telecommunications push. Gains in constituents
Cable & Wireless HKT
(which also has telecom exposure) helped the benchmark index add 130.17, or 0.9%, to 14,105.71.
But the real action was in Tokyo, where the government unveiled its economic stimulus package early in the morning. The spending package -- Japan's ninth major economic stimulus package in the past decade -- totals 18 trillion yen, or $171 billion. About 6.5 trillion yen of that is what's known as real water spending, considered to have a direct and immediate impact on the economy.
Equity and forex markets didn't care much. After yesterday's 275-point
rally, investors weren't able to sustain their enthusiasm for the package, which officials and the media had already made clear would well exceed the expected 15 trillion yen. The Nikkei fell back below the key 18,500 level, losing 240.59, or 1.3%, to 18,327.28.
The yen weakened against the dollar immediately, having already priced in the spending plan's effect. The dollar moved from 104.49 yen to above the 105-yen level, where it ranged throughout Tokyo trading. The greenback was lately quoted at 104.85 yen.
The stimulus package will likely boost Japan's economy in the first half of fiscal 2000, starting in April, and the
Economic Planning Agency
has even upped its GDP growth forecast for fiscal 1999 to 0.6% from 0.5%. But economists warn that the "growth-at-all-costs" scheme the politicians keep repeating will hurt Japan's credit standing in the long run. With Japan's debt burden nearing 130% of gross domestic product, one of the largest ratios among developed nations, critics are wondering how much more the government can afford to spend.
Thursday's Wake-Up Watchlist
Mergers, acquisitions and joint ventures
said it would buy
for $640 million.
Earnings/revenue reports and previews
said yesterday it is slicing its fiscal 1999 earnings outlook to $3.45 to $3.55 a share from $3.60 to $3.65 as a result of slowness at its
credit-card division. The company also announced the postponement of its Nov. 15 analyst meeting.
joint newsroom covered the Bank One news in a
story last night, and
also analyzed the
posted third-quarter earnings of 25 cents a share, in line with the eight-analyst estimate and the year-ago 25 cents a share.
posted third-quarter earnings of 28 cents a share, beating the eight-analyst estimate of 25 cents a share and the year-ago 1 cent a share.
reported fourth-quarter earnings of 55 cents a share, beating the five-analyst estimate of 49 cents and the year-ago 46 cents a share.
Offerings and stock actions
said 2.13 million shares were tendered in a Dutch auction.
raised its 12-month price target on
to 71 from 53.
Credit Suisse First Boston
to hold from buy, citing recent management turnover as well as
announcement that it will enter the software market.
Warburg Dillon Read
started coverage of
with a buy rating and a price target of 27.
upped its price target on
to 50 from 45.
Warburg Dillon Read started
at strong buy and set a price target of 51.
The Heard on the Street column in
The Wall Street Journal
takes a look at Internet companies' fondness for press releases and the often-volatile effect it can have on a company's stock. For instance, the story points out,
shares jumped 20%, when the company
announced Monday it would make an announcement Tuesday. Shares then slid 9.2% on Tuesday when the less-than-stunning
news turned out to be its acquisition of a tool catalog company and entry into new markets.
In what sounds a lot like a confirmation of the above story,
said this morning that it would announce later today a "significant strategic alliance" in a telephone call with top executives, according to
Kaya Laterman contributed to this story.