Yesterday's technology plunge is going to extend itself into the early part of today's session.
At 9:10 a.m. EDT, the
S&P 500 futures
were down 7.5 points, more than 5 points below fair value and indicating a solidly negative open. The
Nasdaq 100
futures were down 62.15 points, indicating some heavy selling in large-cap technology stocks in the early going.
Maybe it's for the best. Early bounces from big selloffs rarely hold anyway.
"If there were an early bounce, I think the problem would be, then what?" said Peter Coolidge, managing director of trading at
Brean Murray Foster Securities
. "Would sellers come back in? I don't see what would stabilize the market."
About the only thing more remarkable than the scale of yesterday's 250-point Nasdaq
selloff was the relatively nonchalant attitude with which traders greeted it. The feeling on most desks seemed to be that the action was nothing special -- just the usual "little profit-taking" you'd expect to see after a run-up like
Friday's. The relatively light volume on the Nasdaq would seem to bear out the notion that yesterday was hardly a broad stampede.
"They ran these OTCs up so far and so fast that they had to come down," said one trader, exemplifying Wall Street's tendency to take the long view during large declines.
At least the professionals are growing accustomed to extreme volatility. Faced with the prospect of margin calls and the possibility of having their stop orders wiped out during big market swings, active retail investors have likely found the Nasdaq a rather frightening place to be lately.
"The market is starting to work itself out, but right now is a nervous, rocky, scary time to be in tech," Coolidge said.
Meanwhile, yesterday dashed any hopes that the arrival of earnings season would do much to calm the market. We'll probably have to wait until next week for the number of first-quarter reports coming in to grow sufficiently diverting. The
earnings slate is rather sparse again today, with
International Paper
(IP) - Get Report
and
Harley Davidson
(HDI)
among the companies scheduled to report.
Abbott Laboratories
(ABT) - Get Report
is already out with numbers in line with estimates.
The bond market was adding to its recent gains, with the 10-year note up 14/32 to 105 28/32 and yielding 5.713%. No major data are in the pipeline today, but
Fed
boss
Alan Greenspan
will address the National Skills Summit in Washington at noon on the topic of the labor market.
The large European bourses were
sinking in afternoon trade, with technology, media and telecom stocks hardest hit. The Paris
CAC
had dropped 126.66, or 2%, to 6238.24, while Frankfurt's
Xetra Dax
was 105.10 lower, or 1.4%, to 7411.85. Across the channel, London's
FTSE
was off 136.0, or 2.1%, to 6397.4.
The euro was trading down at $0.9609.
Asian markets
dipped overnight on the latest wave of Nasdaq selloffs, but losses were milder than on Wall Street. Hong Kong's
Hang Seng
index slumped 363.1, or 2.2%, to 16,487.7, while South Korea's
Kospi
slipped 15.12, or 1.7%, to 855.1. Tokyo's
Nikkei
drifted a modestly lower 96.54, or 0.5%, to 20,522.5, as buying in some technology and drug blue-chips mitigated its fall.
The dollar continued to rise against the yen overnight, moving to 106.94 yen at Tokyo's close. The greenback has managed to hold on to that strength and was lately sitting at 106.86 yen.
For a look at stocks in the preopen news, see Stocks to Watch, published separately.
