M A R K E T .. S N A P S H O T -- Investors biding time
By Julie Rannazzisi, CBS.MarketWatch.com
Last Update: 8:37 AM ET Jun 27, 2001
NEW YORK (CBS.MW) -- Stock investors will likely be idle for most of the session Wednesday awaiting the Fed's decision on interest rates, which will hit the wires at 2:15 p.m.
Market players concede the decision is a toss-up, with pundits pretty evenly split on the chances for a 25 or 50-basis-point cut. The overnight fed funds rate is currently at 4 percent.
The futures markets displayed the uncertainty that will likely be the session's hallmark until the conclusion of the FOMC meeting Wednesday afternoon. The September S&P 500 contract edged up 0.20 point but were trading about 3.70 points below fair value, according to HL Camp & Co. Nasdaq futures, meanwhile, erased 6.50 points, or 0.4 percent.
No economic data is set for release on Wednesday following Tuesday's deluge, which showed more strength than had been expected in consumer confidence, the housing market and durable goods. View Economic Preview and economic calendar and forecasts.
Ian Shepherdson, High Frequency Economics' chief U.S. economist, maintains that Tuesday's stronger-than-expected data don't represent a good reason to expect an imminent change of heart at the Fed.
"The sharp rise in durable goods orders did not full reverse the drop reported in April and the trend remains downward," Shepherdosn observed, adding that economic data are likely to remain soft over the next month or two, which could prompt investors to begin pricing in another ease at next scheduled FOMC, meeting on August 21.
Turning to stocks trading before the official opening bell, Palm (PALM) jumped 20 percent in Instinet. After warning of shortfalls in the quarter, the company posted after the close Tuesday a fourth-quarter loss of 16 cents a share, three cents less than the loss that had been estimated by First Call/Thomson Financial.
And software kingpin Oracle (ORCL) edged up 10 cents to $18.55 in Instinet. CEO Larry Ellison said late Tuesday that business was looking stronger in the current quarter vs. last quarter and that some of the "big deals" are coming back.
Meanwhile, 3Com (COMS) registered late Tuesday a fourth-quarter loss of 61 cents a share in its fourth quarter, wider than the 57 cents that had been expected by First Call.
In analyst actions, Dow stock Walt Disney (DIS) saw its rating lowered by Goldman Sachs to a "market outperformer" from the "U.S Recommended List" on the "anticipated realization of a poor upfront season." Goldman trimmed its fiscal 2002 earnings estimate to 84 cents a share from 95 cents a share.
Over in the bond camp, Treasury prices got modest gains spread across the yield curve.
The 10-year Treasury note was up 2/32 to yield ($TNX) 5.22 percent while the 30-year government bond added 2/32 to yield ($TYX) 5.65 percent.
In the currency arena, dollar/yen put on 0.5 percent to 124.36 while euro/dollar edged down 0.1 percent to 0.8626.
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