Wall Street is a thin-skinned beast, and yesterday's action has got it depressed.
No, it's not like there was heavy selling or anything like that. Investors had hoped that the day would mark an end to the muddle, that stocks were done slogging through the same range. But the major indices ended on the lows of the day, and breadth was horrible. The kind of day that leaves a bad taste in the mouth.
That lingers to the next morning. Overseas markets have not fared too well, and U.S. stocks look to be mired in more selling when they open.
"We're looking at a continuation of yesterday afternoon," said Dan Mathisson, head stock trader at
D.E. Shaw Securities
. "The broader market looks slightly down now that we're getting through earnings season."
Mathisson said it looks like there will be some pressure on Internet issues. But the real story with those stocks may be that they're not hopping around as much as they were before. "What's been amazing is that there hasn't been that much volatility in the sector in the last few days," said Mathisson. "
The premiums attached to volatility have been coming down in the options in some of the bigger names. The trading in these things may be starting to slow down."
At 9 a.m. EST, the
futures were off 3, more than 7 below fair value and indicating a drop at the open.
Down in Brazil, investors were trying to figure out what the nomination of
-- formerly an adviser to
-- to the central bank presidency means. The real weakened on the news, but since recovered some. Stocks were under some pressure, with the
lately off 2.1%.
But the news in Brazil doesn't look like it's affecting the U.S. market that much today. "I don't think the worries are going to work their way into the U.S.," said Mathisson. "As of right now, that's on the back burner."
Federal Open Market Committee
will begin a two-day meeting this afternoon. Nobody expects the FOMC to do anything with rates except leave them where they are. If what all the economists think isn't enough to convince you, consider that it's raining in Washington. No chance of Punxsutawney Al seeing his shadow.
Treasuries were coming under some pressure, but that had more to do with a selloff in the Japanese government bond market and related dollar weakness than the Fed. The 30-year was off 22/32 to 100 9/32, lifting the yield to 5.23%. The dollar was trading at 112.55 yen, down 2.55 yen from yesterday's close.
That bond selloff in Japan weighed on Tokyo stocks as well. Especially disconcerting to Tokyo traders were some comments from government officials showing a lack of concern for the drop in bond prices (translation: The government isn't going to do anything to support bonds). The selling accelerated. The yield on the benchmark 10-year bond climbed 27 basis points to 2.305%.
Hong Kong stocks slipped in light trading. The
dropped 96.83 to 9502.72.
European indices were lower. In Frankfurt, the
was down 8.7 to 5182.12. In Paris, the
was off 48.08 to 4255.84. In London, the
fell 19.3 to 5993.1.
Tuesday's Wake-Up Watchlist
posted fourth-quarter earnings, before items, of 79 cents a share, below the 12-analyst
estimate of 85 cents, but up from the year-earlier 72 cents.
posted fourth-quarter operating earnings of 90 cents a share, in line with the First Call 17-analyst view, but down from the year-ago $1.01.
will report second-quarter earnings today after the close. The First Call 29-analyst estimate calls for earnings of 35 cents a share.
said yesterday it received the go-ahead from the
Food and Drug Administration
for the next generation in its GEM family -- the GEM II DR dual-chamber defibrillator.
In other news (earnings estimates are from First Call):
Bell Atlantic Communications and Construction Services
, a unit of
, said they've joined forces to deliver
IBM Home Director
home networking systems to homeowners throughout the Northeastern U.S. Consumers throughout the Bell Atlantic operating area will have access to home networking technology, including in-home personal computing networking.
posted fourth-quarter earnings of 51 cents, in line with the six-analyst view and up from the year-ago 49 cents.
, the largest municipal bond insurer, posted fourth-quarter operating earnings of $1.16 a share, in line with the seven-analyst estimate and up from the year-ago $1.03.
to hold from accumulate.
(PER:NYSE) 6.5 million-share IPO priced last night at 16 a share via
Morgan Stanley Dean Witter
and will begin trading today. The company is the world's sixth-largest provider of outsourced information-technology services and is led by former presidential candidate
Morgan Stanley Dean Witter upgraded
to outperform from neutral.
said it completed the sale of its electrophysiology unit to
for $802 million. Guidant announced last fall it had agreed to buy the unit for up to $850 million.
forecasts it will earn 61 to 64 cents a share for its fourth quarter, short of the 14-analyst consensus of 69 cents, but up from the year-ago 53 cents.
posted third-quarter earnings of 36 cents a share, in line with the 13-analyst view.