(Updated from 9:38 a.m. EDT)
Oil tightened its choke-hold on Wall Street overnight. After U.S. drillers reported after the close yesterday that oil stocks were lower, crude prices rose to new highs in Asian and European trading. The embattled euro was also at a new low.
New earnings and profit warnings from networking company
and plastics firm
and a downgrade on semiconductor
also dampened sentiment on Wall Street.
Dow Jones Industrial Average was skipping above and below the flatline in early going, but has recently taken a solid step lower lately down 48 to 10,742. The
Nasdaq Composite Index was lately was trading 29 lower to 3837. And the
S&P 500 moved 12 lower to 1448.
Whether or not oil prices can continue at current levels remains a big question. The White House is debating whether or not to tap emergency oil reserves to help check fuel prices. OPEC minister Ali Rodriguez said yesterday that he didn't expect prices to reach $40 a barrel, but that he doesn't think OPEC countries can do anything more to slow prices, either.
recent story on the oil saga ran yesterday.
Beige Book release may help solve some of the economic puzzle. An anecdotal report on economic conditions around the country, the beige book is released at 2 p.m. and could reveal whether companies are passing energy costs on to consumers. The
Federal Open Market Committee will use the book at its Oct. 3 policy meeting, when it next considers interest rates.
-- a Dow component -- said it expects to meet analysts' estimates for upcoming earnings, despite a weak European currency that is cutting into profits. The shares were recently up 1.8%.
Another stock to watch today is investment banking powerhouse
, which reported earnings far above estimates for the quarter and set a 2-for-1 stock split. Lehman reported net income of $457 million, or $3.37 per share, for the third quarter, compared to $290 million, or $2.20 per share, a year ago. According to market research firm
First Call/Thomson Financial
, Lehman Brothers earnings were expected to reach $2.74 a share. Lehman shares were up 2.1%.
"Brokerage stocks are trading where they are because of consolidation fever," said Peter Blatchford, a trader at
. "If Lehman doesn't get the deal, that stock goes a lot lower," he said.
American Stock Exchange Securities Broker/Dealer Index
soared 2.6% on the day yesterday.
In preopen trading, car-maker
, German telecom
and U.S. semiconductor bigwig
were all trading lower. Yesterday, Intel was up after
Banc of America
made positive comments about the company. Deutsche Telekom, meanwhile, is denying rumors that key management members are stepping down. Deutsche Telekom was off 1.4% in early trading. Intel was gaining 1.3%.
reported this morning it had heard talk that
Morgan Stanley Dean Witter
was making some positive comments on the semiconductor sector this morning. Several analysts have made positive comments in the last week, but overall, research firms seem split on whether or not demand is slowing.
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Bond prices are falling as oil has resumed its record-setting climb. Continuing the recent trend, long-term yields are rising more than short-term ones, indicating that bond investors are worried about faster inflation as a result of rising energy prices.
With oil trading over $37.50 a barrel for the first time in 10 years, the benchmark 10-year Treasury note lately was down 2/32 at 99 4/32, lifting its yield to 5.869%. The 30-year bond was faring worse, lately down 12/32 at 104 8/32, boosting its yield to 5.943%.
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European markets were sliding at midday.
was down 55.20 to 6348.30.
Across the channel, the
in Paris was down 31.28 to 6498.67, and the
in Frankfurt was down 30.28 to 6907.46.
embattled euro was lately trading at a new low of $0.8475.
Asian markets were mixed overnight.
Tokyo shares rallied hard today following the Nasdaq's near 4% rise overnight, while investors in Tokyo also concentrated on the expected jump in operating profits for this fiscal year.
index rose 334.12, or 2.1%, to close at 16,458.31.
After the euro fell to a fresh historic low against the dollar at 0.8465, the greenback fell slightly against the yen to fetch 105.66 in Tokyo trading. The dollar was lately trading at 106.51.
index recorded its biggest gain in six weeks, rising 34.91, or 6.1%, to close at 606.08. After foreign investors fled the market earlier in the week due to jitters over the breakdown of the sale of
, some bargain hunters finally materialized, traders said.
index fell 11.58 to close at 15,665.62 in slow trading.
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