Stocks are showing some modest strength this morning.
At 9:05 a.m. EDT, the
futures were up 0.5, a few points above fair value and indicating a mildly positive bias to the open.
Federal Open Market Committee
meeting hasn't changed much for the market, whose fears that interest rates will be going higher
in the future were hardly quelled by the Fed's adoption of a tightening bias. The question of when an actual tightening should arrive is a matter to be sorted out by economic data and Y2K liquidity concerns, and is certain to be an increasingly popular subject in markets coverage as we approach Nov. 16, when the FOMC next meets.
Today, after confidently suggesting in his Sunday column that the Fed would make no change in its policy bias this week,
The Washington Post's
was taking a more tentative tone,
focusing on the Fed's state of "puzzlement" over the absence of inflation in the midst of such strong economic growth.
"We're actually keying on the bonds, which made a new low for the year yesterday," said Todd Clark, head of listed trading at
Volpe Brown & Whelan
. Clark was referring to the bond futures, which stock traders tend to watch more than the cash bond. The December 30-year Treasury contract was lately trading up 10/32 to 112 24/32.
"It's clearly encouraging that the
bond futures have been able to find some demand at these yields," Clark said.
The 30-year cash Treasury was looking slightly bouncy after yesterday's selloff, up 6/32 to 99 14/32, putting the yield at 6.166%.
In terms of technicals, stocks' footing looks relatively shaky. Coming on the heels of the FOMC meeting, the
selloff at the top of its downward trading channel yesterday is hardly a technical phenomenon. But still, "as long as that channel is in place, it's tough to get excited," said Clark.
Same old, same old, perhaps. But there is one thing that could help the market break out of its interminable trading range -- something that it didn't have to distract it from its interest rate worries between the Fed's Aug. 24 meeting and yesterday: Earnings season, which will kick off next week. Today
will become the first
Dow Jones Industrial Average
component to report third-quarter earnings. Also scheduled to report are
Advanced Micro Devices
In Hong Kong, the
nudged its way through the 13,000 barrier, gaining a scant 19.09 to 13,017.98. The benchmark index had been up as much as 188 points at midsession, but pared its gains after a lackluster annual policy address from Hong Kong Chief Executive
. In the wake of the FOMC's adoption of a tightening policy bias, Tung's point that U.S. interest rates remained under upward pressure didn't sit well in Hong Kong, where the dollar is pegged to the U.S. currency.
Bank of Japan
fully eliminated the extra liquidity it had been providing to the money market to accommodate last week's fiscal half-year end, reverting back to the 1 trillion yen surplus that it has generally been leaving in the banking system since February. That quashed any lingering hopes in the market that the
Bank of Japan
was set to engineer an easing of monetary policy.
But no matter. The dollar kept right on firming against the yen overnight, recovering the ground it lost after yesterday's FOMC meeting, and moving cleanly above the 107-yen level. Dollar strength was encouraged somewhat when Vice Finance Minister for International Affairs
said that the market hasn't yet fully comprehended the G7's expression of its concern over yen strength.
The dollar was lately quoted at 107.43 yen.
The yen's weakness helped export-oriented stocks, and the
rose 112.27, or 0.6%, to 17,896.42.
The big European indices were mixed in early afternoon trading ahead of tomorrow's
Bank of England
European Central Bank
was down 12.58 to 5289.27, while the London
was off 15.5 to 6069.0. The Paris
was up 27.72, or 0.6%, to 4688.85.
Wednesday's Wake-Up Watchlist
, head of Internet initiatives at
, is leaving the telecom giant to pursue other interests. The long-distance behemoth said plans to roll out new broadband services, including cable telephony pilots in eight cities by the end of the year, nonetheless remain on target. AT&T didn't name a permanent successor to Hindery, and further information on his plans wasn't immediately available.
Separately, AT&T and
, through a joint venture, are buying
for $2.32 billion.
Mergers, Acquisitions and Joint Ventures
accepted a juicier $1.12 billion buyout offer from
. Phelps Dodge reached a pact last week to acquire
Cyprus Amax Minerals
AT&T is teaming up with
to create e-Business solutions to small and midsize businesses.
pharmacy benefits division,
, set a pact between their Internet sites.
unveiled plans to launch wireless Internet service, starting with a three-month test run involving 1,000 mobile-phone users. The test will enable employees from five major corporations, including the
Credit Suisse First Boston
, to use their phones to check their email and other content on the Internet that can be adapted to fit a small mobile-phone screen. If all goes as planned, the companies will offer the service in early 2000.
In other news, Nortel was awarded a two-year contract with
Prism Communication Services
estimated at up to $460 million.
buyout talks with
Pimco Advisors Holdings
have reached an advanced stage, the negotiations could still fail,
reported, citing a source familiar with details of the talks. Allianz is a German insurer.
Earnings/Revenue Reports and Previews
(Earnings estimates are from
First Call/Thomson Financial
is slated to report earnings today. The 16-analyst estimate calls for the aluminum giant to post earnings of 69 cents a share.
posted third-quarter pro forma earnings of 34 cents a share, a penny ahead of the 16-analyst estimate.
Structural Dynamics Research
warned third-quarter revenue will be about $109 million, less than the current analysts' consensus estimate of $116 million and earnings, not including nonrecurring, acquisition-related charges, will come in at about 12 cents a share, well below the six-analyst estimate of earnings of 30 cents.
posted first-quarter earnings of 39 cents a share, beating the 16-analyst estimate of 38 cents and the year-ago 44 cents. The company also said that it has inked a deal to sell 10 hospitals.
Offerings and Stock Actions
has filed with the
Securites and Exchange Commission
for a 3.5 million-share offering.
Warburg Dillon Read
raised its rating on
to buy from hold.
Warburg Dillon Read started coverage of
with a hold rating.
upped its rating on
to buy from attractive.
Morgan Stanley Dean Witter
lowered its rating on
to outperform from strong buy.
Warburg Dillon Read initiated coverage of
with buy ratings.
Warburg Dillon Read initiated coverage of
with a strong buy rating.
PaineWebber sliced its rating on
to attractive from buy.
Warburg Dillon Read cut its rating on
to hold from strong buy.
PaineWebber lowered its rating on
Sunrise Assisted Living
to neutral from buy.
also downgraded the shares to market perform from a buy.
Warburg Dillon Read rolled out coverage of
with a buy rating.
Chairman and CEO Richard Huber said industry leaders and corporate customers will meet to discuss an approach to handling HMO lawsuits,
The Wall Street Journal
said it would create a custom AOL message service for
Vice Chairman Harry Pearce refuted analysts' reports that the company has plans to break off its
division in the near future, the
September same-store sales rose 13%.