<FONT COLOR=BLUE>MARKET SNAPSHOT--Futures point to steady open
Will follow-through buyers show up?
By Julie Rannazzisi, CBS.MarketWatch.com
Last Update: 7:58 AM ET Oct 16, 2000
NEW YORK (CBS.MW) - A steady open appears to be in store for U.S. shares on Monday following a powerful rally that enveloped Wall Street on Friday.
The question on market watchers' minds, however, is whether buyers will continue to scour for bargains and snap up shares or disappear just as quickly and violently as they appeared on Friday.
December S&P 500 futures added 2.30 points, or 0.1 percent, but were trading roughly 0.50 point below fair value, according to HL Camp & Co. Nasdaq futures, meanwhile, gained 10.00 points, or 0.3 percent.
In shares trading before the opening bell, Texaco (TX) gained $4.06, or 7.4 percent, to $59.25 in Instinet. Chevron confirmed Monday it'll purchase Texaco in a $35.7 billion deal. The combined company will be called ChevronTexaco and save at least $1.2 billion annually within six to nine months of the deal's completion, the companies said.
An onslaught of earnings reports will hit the tape this week, with fifteen Dow companies set to report. It'll also be a big week for technology, with many heavyweights - including IBM, America Online, Texas Instruments, Microsoft, EMC, Apple Computer, EBay and Sun Microsystems -- unleashing their results.
The impact of all the negative pre-announcements for the third quarter was relatively mild, according to earnings compiler First Call said. In fact, expectations for S&P 500 earnings growth currently stand at 15.9 percent, down only modestly from the 18.8 percent anticipated at the start of the third quarter.
The real problem for the market, however, is what the recent steam of negative pre-announcements implies about fourth-quarter results and beyond, First Call said. Expected earnings growth for the S&P 500 technology sector was already cut from 31 percent on Sept. 1 to the current 25 percent, far more than usual at this stage, First Call notes.
Over in the bond market, prices slipped into the minus column for a second consecutive session. The 10-year Treasury note erased 6/32 to yield ($TNX) 5.755 percent while the 30-year bond fell 6/32 to yield ($TYX) 5.85 percent.
There will be lots of economic data to chew on this week, providing the market with information on the state of the U.S. economy. The highlights include the release of the September consumer price index, industrial production, capacity utilization, the August trade gap, September housing starts and the October Philadelphia Fed Index.
Monday will see the release of August business inventories, a second-tier release that is unlikely to raise any eyebrows. View Economic Preview, economic calendar and forecasts and historical economic data.
In the currency arena, the dollar strengthened against both the yen and the euro. Dollar/yen gained 0.5 percent to 108.14 while euro/dollar slipped 0.5 percent to 0.8515. The latter has fallen for the fourth straight session and is now hovering about 1 percent below Sept. 21's closing level - the day before the joint intervention effort by the European Central Bank, Federal Reserve and Bank of Japan to prop up the fledgling currency. |
