M A R K E T .. S N A P S H O T --Futures recoup losses
Q2 productivity downwardly revised to 2.1%
By Julie Rannazzisi, CBS.MarketWatch.com
Last Update: 8:42 AM ET Sep 5, 2001
NEW YORK (CBS.MW) -- The stock futures markets reclaimed lost ground and pointed to an open close to the unchanged mark on Wednesday, though many big-cap names in the telecom sector traded lower following negative analyst comments.
But support in the broad market may come from the brokerage group following an upgrade from UBS Warburg.
In the futures markets, the September S&P 500 contract added 3.00 points, or 0.3 percent, and were trading about 0.40 point below fair value, according to HL Camp & Co. Nasdaq futures, meanwhile, added 5.00 points, giving back earlier losses.
Telecom stocks are likely to come under more pressure, with Sweden's Ericsson (ERICY) trading close to three-year lows in Europe. The stock tumbled nearly 20 percent on Tuesday after issuing cautious statements regarding recovery prospects for the sector. .
And a Merrill Lynch downgrade of a number of telecom stocks exasperated the already negative tone surrounding the telecom sector.
Analyst William Choi lowered his view on Motorola (MOT) to an "intermediate-term neutral" from an "intermediate-term accumulate," feeling that a "prolonged weakness" in the industry will cloud the company's recovery prospects. Motorola shares slumped almost 5 percent ahead of the open.
Merrill also downgraded Ericsson and cut the U.K's Marconi (MONI) and France's Alcatel (ALA). The brokerage giant reasoned that a cautious take on these stocks was necessary in light of expected spending cuts from carriers into 2002.
On the economic front, second-quarter non-farm productivity was downwardly revised to show an increase of 2.1 percent from the previously reported 2.5 percent and the expected 1.9 percent level. Unit labor costs were upped to show a 2.7 percent increase from the previous 2.1 percent. Check economic calendar and forecasts.
Treasury focus
Treasurys logged gains after a horrendous showing on Tuesday on the back of stronger-than-expected data on the manufacturing sector.
The increase in the NAPM index suggested that the manufacturing sector may be finding its footing after a prolonged contraction and investors pared back expectations for additional easings, which prompted a severe sell-off in the short end of the yield curve.
The 10-year Treasury note was up 1/32 to yield ($TNX) 4.955 percent while the 30-year government bond added 5/32 to yield ($TYX) 5.475 percent.
In the currency sector, the dollar tacked on 0.6 percent to 120.03 yen while the euro inched up 0.2 percent to 88.98 cents after taking a 2.4-percent drubbing on Tuesday. |
