Publish date:

Today's Market: Stocks Slipping South After Early Move Higher

<LI>Oil -- new high; euro -- new low.</LI> <LI>Lehman beats estimates.</LI>

(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

Informix

(IFMX)

and plastics firm

Spartech

(SEH)

and a downgrade on semiconductor

Texas Instruments

(TXN) - Get Report

also dampened sentiment on Wall Street.

The

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.

TheStreet.com's

most

recent story on the oil saga ran yesterday.

Today's

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.

Meanwhile,

United Technologies

-- 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

Lehman Brothers

(LEH)

, 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

Miller Tabak

. "If Lehman doesn't get the deal, that stock goes a lot lower," he said.

The

American Stock Exchange Securities Broker/Dealer Index

soared 2.6% on the day yesterday.

In preopen trading, car-maker

DaimlerChrysler

(DCX)

, German telecom

TheStreet Recommends

Deutsche Telekom

(DT) - Get Report

and U.S. semiconductor bigwig

Intel

(INTC) - Get Report

were all trading lower. Yesterday, Intel was up after

Banc of America

and

Bear Stearns

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%.

CNBC

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.

Back to top

Bonds/Economy

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%.

Back to top

International

European markets were sliding at midday.

The

FTSE 100

was down 55.20 to 6348.30.

Across the channel, the

CAC 40

in Paris was down 31.28 to 6498.67, and the

Xetra Dax

in Frankfurt was down 30.28 to 6907.46.

The

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.

The

Nikkei 225

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.

Korea's

Kospi

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

Daewoo Motor

, some bargain hunters finally materialized, traders said.

Hong Kong's

Hang Seng

index fell 11.58 to close at 15,665.62 in slow trading.

Back to top