you my not get that discount after all.....
Sunday December 10, 4:46 pm Eastern Time
Supreme Court May Lift Market's Gloom
By Haitham Haddadin
NEW YORK (Reuters) - The uncertainty dogging Wall Street since last month's presidential
election finally may lift this week as investors turn their attention to a U.S. Supreme Court
hearing Monday that could determine the next American president.
The nation's highest court is set to hear arguments at 11 a.m. EST Monday on the manual
recount of disputed ballots in the pivotal state of Florida. On Saturday, the high court granted Republican George W. Bush's
request for a halt in the recount, a setback for Democrat Al Gore.
The recount had begun late Friday after the Florida Supreme Court ordered an immediate manual recount of a portion the
state's ballots, news that immediately weighed on stocks.
``I had expected before the (U.S.) Supreme Court ruling that the Nasdaq would give back the 160 or so points it gained on
Friday,'' said Bill Meehan, chief market analyst at Cantor Fitzgerald, in Darien, Conn. ``It is hard to imagine at this point, unless
the Gore characters can come up with another trick, that this won't lead to more upside.''
The U.S. Supreme Court ruling ``has turned the situation around from after the close Friday. We will not have any really definite
idea until the stock-index futures start trading (Sunday evening New York Time), but the tone appears to be improved,'' he
said.
Both campaigns realized the ruling from the high court, by a 5-4 margin, will likely be the deciding factor in a bitter election fight
that has weighed on the stock market for more than a month.
Late Friday, the outlook for stocks turned negative immediately after the Florida court ruling, as investors feared the recount
would prolong the historically unprecedented post-election chaos.
But with the U.S. Supreme Court stepping into the fray, investors are expected to count on a swifter resolution, and stocks now
appear poised to resume last week's substantial rally, the first in weeks.
Despite two advancing days last week the tech-heavy Nasdaq Composite Index (.IXIC) is down 15 percent since the
November 7 election.
INFLATION DATA DUE THIS WEEK
In addition to the election, economic data like the widely -watched Consumer Price Index (CPI) and the Producer Price Index
(PPI) will also guide trade this week, as will corporate-earnings reports or warnings.
Economists on average are forecasting that the PPI has risen by 0.2 percent in November, down from a 0.4 percent gain in
October, which is good news. But the core PPI, which excludes volatile energy and food prices, is seen moving up by 0.1
percent versus a decline of 0.1 percent.
Meanwhile, the CPI is seen repeating October's 0.2 percent gain, both for the overall and core numbers.
``A negative, upside surprise in the numbers, would be devastating to the bullish case,'' said Thomas McManus, market
strategist at Banc of America. ``It would suddenly raise questions about the near-term capability of the Fed
to provide lower interest rates any time soon.''
The U.S. Federal Reserve, which has raised Corporate America's borrowing cost six times since mid-1999, is keeping an eye
out to make sure inflation doesn't creep up. But it has also hinted that it may end its rate-hike crusade to avoid an excessive
slowdown in the U.S. economy.
Experts said this is exactly what the doctor ordered, as it would provide the catalyst for a sustained market rally. The Fed meets
next on December 19, and some on Wall Street believe the Fed may announce it is done raising rates for now, moving to a
``neutral'' stance.
EARNINGS, WARNINGS
A number of high profile technology companies report results this week, most notably software giant Oracle Corp.
(NasdaqNM:ORCL - news). Consumer electronics retailer Best Buy Co. (NYSE:BBY - news), which reports Tuesday, is
likely to be closely watched too amid what many see as a dismal shopping season up to now.
``The only saving grace is that Christmas falls on a Monday, which gives a long weekend for last minute shopping,'' said James
Gribbell, portfolio manager with David L. Babson & Co., which has $2 billion in assets. ``That last weekend of shopping has
saved the season (in the past).''
Friday's buying spree on technology issues sent Nasdaq 164 points, or nearly 6 percent, higher, which came atop a 10 percent
surge on Tuesday -- the market's biggest gain ever -- on speculation about Fed rate cuts. But opinion is still divided how far
such rallies can go, since investors fretting over slowing corporate earnings had left rallies short-lived in the past two month |
