DJ ADR Report -2: Europe Seen Higher With Telecoms Leading
17 Jul 16:57
After a brutal day, the European markets are looking to reverse their losses
Wednesday.
"The European market completely overreacted today, but since they lack
leadership and direction, they just followed in tandem with the U.S.," said
Barry Hurwitz, ADR trader at HSBC Holdings PLC.
Hurwitz expects New World stocks to see a rebound Wednesday, and a positive
report from Intel would help. (But Intel after the bell reported its
second-quarter profits fell 76%).
"I'm not going to say that we're going to totally erase today's losses but
barring a fiasco with Intel, I think we'll have a fairly positive opening in
Europe," he said.
Earnings are in the spotlight in Europe, Hurwitz said, noting investors
skittishness in buying Nokia Corp. (NOK) prior to its earnings report later
this week. While the ADR closed higher, volume was still below average.
Nokia's ADR finished up 29 cents, or 1.7%, to $17.46.
Philips Electronics, Europe's largest consumer electronics company, announced
weak second-quarter results, but they were in line with analysts' reduced
expectations. What hit the market were comments from the firm that it sees no
signs of a recovery after sales "bottom" in the third quarter.
This sent London shares spiraling downwards Tuesday. The FTSE 100 closed down
89.3 points, or 1.6%, at 5427.8 on provisional market volume of 1.95 billion
shares.
Among the technology stocks hit hardest was COLT Telecom (COLT) and Marconi
PLC (MONI). Colt's ADR fell 50 cents, or 2.7%, to $18 in New York after it
closed down 32 pence, or 9.5%, at 306 pence. Marconi dropped 14 cents, or 4.6%,
to $2.92 in New York after it fell 9.25 pence, or 8.5%, to 99.75 pence.
In addition to the Philips effect, COLT Telecom was hit by a downgrade from
Credit Suisse First Boston which said that the rise in the firm's bond yield
meant that it would have difficulty finding the required fundingin the market.
French stocks ended mostly lower Tuesday, dragged down by yet another
collapse in technology-related stocks.
The benchmark CAC 40 index of most heavily traded stocks closed down 44.22
points, or 0.9%, at 4978.54 points.
Volume remained low Tuesday, as investors remained on the sidelines ahead of
the U.S. Federal Reserve meeting Wednesday.
-By Shaheen Pasha, Dow Jones Newswires; 201-938-2312;
shaheen.pasha@dowjones.com
(END) DOW JONES NEWS 07-17-01
04:57 PM |
