(Updated from 9:26 a.m. EST)
The bottom-fishers were out in droves this morning, helped by some good news from the supposed protagonists in yesterday's selloff --
and Asia. The major stock market indices were well in the green.
Once again, investors simply won't give up on technology -- but that doesn't mean a bounce will hold forever. The roster of gainers this morning reads like a who's who of big-cap tech and telecom:
-- you get the idea.
A couple of negative news items out this morning certainly couldn't keep investors' mood down. Boosting it back above 10,000, the
Dow Jones Industrial Average was gaining 101 to 10,074. The
Nasdaq Composite Index added 51 to 2023, bringing it back above the key 2000 level. And the
S&P 500 moved up by 13 to 1180.
was rising 6.9% to $37.70 even though
cut its estimates and price targets on the storage company.
dropped its estimates for bleach giant
, which warned about earnings yesterday. It was up 1.5% to $33.51. Lehman cut its estimates and price target on burger titan
, which was losing 1.9% to $27.02. Internet brokerage
said trading plunged in February. It was gaining 2.7% to $17.50. And
was up 1.7% to $14.88 after it cancelled its international unit's initial public offering.
So here's what's giving the bulls some spirit: It seems the rumor-mill, in full force for Wednesday's session, was only half-right about Nokia. The Finnish mobile-phone giant did indeed have something to tell investors, but the news was
better than Wall Street had expected. Nokia did cut its first-quarter handset sales projections to between 450 million to 500 million units from previous targets of more than 500 million units -- but the company kept its earnings targets intact and said profit margins would be up. Conflicting rumors about the company had emerged in the past few weeks, but yesterday the buzz was decidedly negative, and that helped propel overseas markets lower.
Shortly after Nokia "warned" this morning, European indices reversed course to move into the green. Nokia was lately jumping 15.1% to $25.10 in preopen action.
And Asia pulled off a miraculous rebound overnight. After swinging in a 700-point range, Tokyo's
surged to close up 2.6% at 12,152.8. Market pundits speculated the overnight Asian recovery might have been driven by news that Japanese bank
had doubled its loan-loss provisions in response to growing fears about loan defaults, as well as by reports that the Japanese government might set up a fund to cover investor losses.
Yesterday, ongoing concerns about Japan's staggering economy and stock market were exacerbated by news that a credit rating agency,
, put 19 Japanese banks on credit review and that the
Bank of Japan
was in emergency talks with two banks believed to be on the verge of bankruptcy. The Nikkei fell to a 16-year low early this week. Hong Kong also recouped recent losses, and the
closed 1.2% higher to 13,504.2.
Another chip for the bulls this morning:
Expectations are growing that the
Federal Reserve will cut interest rates by 75 basis points instead of only half a percentage point when it meets Tuesday. Yesterday's release of the January
business inventories helped bolster that theory. The report showed inventories for the month were way above economists' expectations with a 0.4% rise -- a sign that inventories continue to grow sharply and demand continues to stumble. Rising inventories have been named as a key concern for the slowing economy, and the steeper the slowdown, the more the Fed will likely be encouraged to cut rates to help get the economy back on its feet. Inventories for December were revised higher -- to unchanged from initial estimates of a 0.1% drop.
Even if Nokia and Asia hadn't provided some relief this morning, the market might still have staged a rebound. In case you missed it, the
Dow Jones Industrial Average yesterday fell 318 points, or 3.1%, to 9,973 -- marking the first time it's finished below 10,000 since Oct. 18, 2000. The
Nasdaq Composite Index, which is nearly 60% off its all-time high, ended behind 43 points, or 2.1%, to 1,972 -- the second time this week alone that it's closed below the 2,000 mark. With the major stock-market indices at these low levels, some stocks are inevitably going to look cheap to some investors.
Whether or not today sees a rally, fundamentals still have not changed. Earnings warnings have become the rule, rather than the exception, in the past few months, as company after company says it won't meet its first-quarter performance targets. And corporate executives are plagued by a lack of
visibility about their financial future.
Investors will be watching carefully for software giant
earnings report, out today after the close of regular trading.
Meanwhile, some think rate cuts from the Fed next week could turn things around.
A moderate rebound in Europe is also an encouraging sign, at least for this morning's market outlook. The major indices in Europe continue to post middling gains, and the
was lately up 42.7 points, or 0.76%, to 5668.6. Germany's
was 48.1 higher, or 0.83%, to 5842.2. And Paris'
was rising 33.1, or 0.65%, to 5148.6.
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Treasury prices were pretty flat this morning, with the benchmark 10-year
Treasury note was down 4/32 to 101 6/32, yielding 4.847%.
Treasury prices have been moving opposite equities for days, and that was certainly true of Wednesday's session. The long end of the money market was up by more than two-thirds of a point, while note prices remained firmly positive, as well. After dipping to their two-year lows yesterday morning and then backtracking before midday, yields had moved downward in the early evening.
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