NY Stocks Seen Tumbling; Old Fears Supplant Rate Worries
05/16/2001
Dow Jones News Services
(Copyright © 2001 Dow Jones & Company, Inc.)
By Robert O'Brien
of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--Major market averages are pointed lower as investors come to grips once again with investment fundamentals that remain grim now that the latest Federal Reserve policy ruling is out of the way.
Indications from the futures market show that the Dow Jones Industrial Average, which closed Tuesday at 10872, is facing a 75-point setback from the opening bell Wednesday, while the Nasdaq Composite Index figures to tumble 50 points or so.
Market averages slipped into a state of rigor mortis Tuesday, following the outcome of the Federal Open Market Committee meeting at which the central bank delivered a full 50 basis-point rate reduction, and kept open the door for further cuts down the road.
But what should have been a welcome assist from a key ally didn't translate into steep gains. The Dow industrial average finished the session just four points lower than where it opened; the Nasdaq composite swung just three points in the session, although it moved to the upside.
The grim reality for corporate America, as well as for investors, is that the profit outlook remains sluggish, and that the benefits of the Fed's accommodation won't really radiate until later this year.
Several technology issues are pointed lower from the opening bell Wednesday, illustrating the challenges that remain. Shares of Sycamore Networks, Charter Communications, Applied Materials and Terayon Communications all look weaker from the start, after companies either unveiled some disappointing numbers, or served up forecasts of miscues to come. |
