Nasdaq Composite Index
fell 500 points in three days this week, and all you get is this lousy snapback.
At 9:05 a.m. EST, the
futures were up 7.8, more than 7 points above fair value and a positive indication for the broad, big-cap market. The
futures, meanwhile, were up 60.5 points. That's pointing toward some early strength in the technology sector -- which one would naturally expect after the beating those stocks took yesterday.
Be careful. Early trends in both directions have been notoriously unreliable lately. And if there were ever a time to exercise caution over a reflexive rebound, it would be at the end of a week like this one, which has seen the Nasdaq shed about 10.2% of its value. The selling has been sloppy and indiscriminate, and volume hasn't been quite intense enough to suggest capitulation.
"I wouldn't trust it," said Bob Basel, director of listed trading at
Salomon Smith Barney
, of a snapback. "Not that much."
Still, there are reasons to be encouraged. You could argue that an early rally would actually be an extension of the astonishing late reversal tech stocks put together yesterday, a reversal that lifted the Comp more than 100 points from its session low. And for all the selling, the Nasdaq is still above support on the trendline it's been tracing for months.
Hugging the Trendline
"Everybody was talking about 4500 being support," Basel said. "But nothing happens on the exact number. What would shake me more is if they took it down to 4300 today. So I'd give it a chance to move sideways today and maybe trade higher to see if 4500 really is support."
Some key bellwethers were moving higher on
was trading at 129 7/8 from a close of 127, while
was up at 178 1/4 from a close of 169 1/2.
The bond market was edging lower ahead of the 10 a.m. release of the
Chicago Purchasing Managers' Index
, with the 10-year note down 10/32 to 103 and yielding 6.090%.
The large European indices were mixed to higher in afternoon trade, paced to the upside by London's
, which was up 82.3, or 1.3%, to 6527.5. Frankfurt's
was up 38.87 to 7683.76, while the Paris
was up just fractionally to 6314.16.
The euro was lately trading at $0.9573.
Asian markets suffered relatively modest losses overnight.
In Tokyo, the
fell 104.18 points to 20,377.32. The market was digesting news of a record high unemployment rate, which hit 4.9% in February -- good news for stock investors, because higher unemployment suggests that Japan Inc. is truly restructuring. Expectations in the market are for a strong
, the quarterly survey of corporate sentiment from the
Bank of Japan
that will come out on Monday.
The dollar weakened against the yen following yesterday's fall on the Nasdaq, changing hands at 105.10 by the close of Tokyo action. Talk in the market this week is that the
Bank of Japan
would intervene to buy dollars at the 105.00 yen level.
It doesn't look like that intervention has come yet. The yen's strength has extended into the Western forex markets, lately putting the greenback at 102.27 yen.
finished 60.61 lower at 17406.54 in quiet trading.
For a look at stocks in the preopen news, see Stocks to Watch, published separately.