U.S. stocks poised for flat start, uncertainty weighs
By Denise Duclaux
NEW YORK, Dec 4 (Reuters) - Stocks are expected to circle the break-even point at the start of trading on Monday as a crucial ruling in the disputed U.S. presidential race and jitters over a softening U.S. economy weigh on Wall Street.
``I am looking for a mixed and choppy opening,'' said Peter Cardillo, director of research for Westfalia Investments. ``We are already beginning to hear from companies warning about the next quarter. I think that is what is behind this malaise in the stock market and this continued rut in the Nasdaq.''
With more than an hour to go before the opening bell, the Nasdaq 100 index futures for December nosed up 13.00 points to 2,586.00, indicating a 0.5 percent rise in Nasdaq's 100 largest stocks. Standard & Poor's 500 index futures inched 1.00 points higher to 1,321.60.
Traders are hoping for a conclusion to a month-long U.S. presidential battle between Democrat Al Gore and Republican George W. Bush.
After a grueling two-day hearing, a Florida judge said he would issue a ruling Monday morning on whether hand recounts should proceed in Florida counties where Gore's lawyers argue as many as 14,000 were missed in machine counts.
Also pending is a U.S. Supreme Court decision on whether Florida's highest court erred in extending the deadline for certifying election results in the state to allow hand-counted ballots to be included in the final tally.
The market is widely expected to rally when the cloud of uncertainty surrounding the battle for the White House lifts.
On the economic data front, traders will be eyeing single-family home sales for October and leading indicators for October -- both due at 10 a.m. EST (1500 GMT) -- so they can gauge the extent of the economic slowdown.
``The economics are what is really gripping the market -- and the uncertainties as to how far and how fast the economy is slowing,'' Cardillo said.
Investors are hoping that the drubbing on Wall Street and the softening of the U.S. economy will persuade the Federal Reserve to lower interest rates soon.
U.S. bond markets are pricing in up to three interest-rate cuts of 25 basis points each by the Federal Reserve in coming months, analysts said. The U.S. central bank has hiked interest rates six times since June 1999 to stave off inflation.
Investors have long worried that a slowing U.S. economy will depress corporate profits. Before the market opened, aerospace giant Boeing Co. (NYSE:BA - news) said its aircraft orders in 2001 could fall slightly below those of 2000 as momentum slowed after a bumper year. Stock of the Dow component closed on Friday at 65-13/16 on the New York Stock Exchange.
Ford Motor Co. (NYSE:F - news), which reported lower U.S. November sales and plans to idle car output in December, said on Friday its fourth-quarter earnings will be lower than Wall Street expectations. The No. 2 automaker, which warned in a filing with the U.S. Securities and Exchange Commission, closed at $24-3/16 on the New York Stock Exchange before the news.
A $13.4 billion merger will also dominate Wall Street. PepsiCo Inc. (NYSE:PEP - news) before the market opened said it will buy Quaker Oats Co. (NYSE:OAT - news) in a stock deal that gives the world's No. 2 beverage company Quaker's Gatorade, the crown jewel of sports drinks, and ends more than a month of speculation over who might acquire Quaker Oats Co. Quaker closed at $88-5/8 on the Exchange on Friday, while PepsiCo ended at $42-3/8.
Oil prices rose a little on Monday amid renewed jitters over Iraq's suspension of crude sales and Baghdad's warning that it will enforce a boycott on exports to the United States once deliveries resume.
The dollar fell across the board, hitting a two-month trough against the euro and three-month lows against the Swiss franc on prospects of the U.S. economy slowing down faster than previously expected.
European shares fell on Monday, led down by telecoms and techs which suffered a severe attack of pre-Wall Street nerves. The FTSE Eurotop 300 index was off 1.4 percent, while the DJ Stoxx 50 index shed 1.5 percent.
The Nasdaq Composite Index (^IXIC - news) gained 47.36 points, or 1.82 percent, to 2,645.29 on Friday. The Dow Jones industrial average (^DJI - news) lost 40.95 points, or 0.39 percent, to end at 10,373.54. The broader Standard & Poor's 500 Index (^SPX - news) inched up 0.28 of a point, or 0.02 percent, to 1,315.23.
For the week, the Nasdaq was off 8.9 percent, the Dow down 0.92 percent and the S&P 500 off nearly 2 percent. Year to date, the Nasdaq tumbled 35 percent, the Dow was off 9.8 percent, and the S&P 500 off 10.5 percent. |
