FRANKFURT -- Stocks continued under mild selling pressure, with traders edgy about sharp gains in U.S. bond yields and another losing session on Wall Street Thursday.
announced a worse-than-expected 7% drop in 1998 pretax profits, pushing shares down 3.7%. The bank blamed higher costs and bad loans in Russia, Asia and Latin America. Dresdner also confessed that its ill-fated involvement with U.S. hedge fund
Long Term Capital Management
-- remember those guys? -- caused it to lose 240 million marks.
On the Continent, banks were mixed, while most U.K. banks were losers.
was down 1.7%,
dropped 1.4% and
German life-sciences firm
slipped 1.3% after announcing 1998 results.
In Frankfurt, the
was down 23 to 4894. In London, the
was down 25 to 6180. In Paris, the
was down 51 to 4101.
Most Euro stocks indices by early afternoon had bounced well off session lows in quiet trading. Bullishly inclined traders here are hoping that Thursday's late-session gains in New York will spill over into today's open.
futures were last down 0.5 points at 1241.00, while the U.S. long-bond yield was yielding 5.51%. The dollar, after weakness yesterday, opened a bit firmer this morning in Europe, but has since slipped from morning highs. Dollar/yen was last bid at119.51, and the euro was recently trading at $1.1036.
Paul O'Connor, an equities strategist at
Credit Suisse First Boston
in London, sees the market continuing to "churn around" in current ranges. A lot of loose cash will provide solid market support on dips, while the weak economic outlook and fear of higher U.S. rates will knock down any market attempt to rally.
"I would say market forces are rather fully balanced," O'Connor said. "I don't think it's time yet for a big directional break. And he added that despite high liquidity, investors are being careful with their cash, not blindly tossing it at the market as they have in the past. "It's not like everybody is buying in a frenzy."
He likes consumer cyclicals, such as U.K. retailers, leisure companies and media, as well as banks. He would sell pharmaceuticals, and he'd be cautious with the
highflying -- oops! -- let's just call them U.K. telecoms, which have wracked up some big gains and are now richly valued.