U.S. stocks dip as attack fears grow, eye Citigroup
By Keiron Henderson
LONDON, May 22 (Reuters) - U.S. shares in Europe eased in nervous trading on Wednesday as a security alert at New York's Brooklyn Bridge reawakened worries of a new attack on the United States.
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Citigroup (Frankfurt:TRV.F - News; NYSE:C - News) was in focus after news that it is to buy West Coast thrift Golden State Bancorp (NYSE:GSB - News) to expand its consumer operation. Citigroup traded at 48 euros in Frankfurt -- down two percent from its New York close. The stock slipped to $44.07 after the bell from its close of $45.26.
U.S. stock index futures swung around from a moderately firm showing to be down but scraped back some losses after the "all clear" at the bridge, closed for an hour as authorities investigated a suspicious package.
By 1057 GMT the Dow Jones industrial average June contract was down eight points to 10,115 points, up from an earlier trip to 10,094 and pointing to fresh pressure on the index in New York where it fell 124 points on Tuesday.
Traders said existing nervousness about renewed attacks on the United States by al Qaeda and other groups had been heightened by television images of the closed bridge.
"It will definitely have an impact on the market but a lot of those traders are coming in from Brooklyn and if they get into work okay then the market is probably going to ignore this," said one trader.
He said the reaction reflected unease among investors after the events of September 11, which were recently heightened by warnings al Qaeda could be poised for a fresh attack.
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"These things aren't going to happen on a pre-announced basis. To some extent they (the U.S. authorities) have brought some of this on themselves because they made all these warnings recently. Everyone's on edge," the trader said.
Dell (NasdaqNM:DELL - News) traded via the Instinet electronic brokerage system at $26.75 after a $26.88 close and Cisco (NasdaqNM:CSCO - News) traded at $16.05 after a $16.16 close
Telecommunications company WorldCom (NasdaqNM:WCOM - News) edged up a couple of cents from its afterhours level of $1.45, continuing to draw strength from news it will save around $284 million by eliminating the MCI group dividend.
Aside from the brief futures flurry on the bridge news traders reported sluggish business in U.S. shares, with prices hugging close to Tuesday's lower New York closings as investors waited for new signs that the economy is going to deliver corporate earnings improvements.
Dealers said that with the U.S. reporting season winding down, and in the absence of major U.S. economic figures until durable goods and gross domestic product data later this week, shares were likely to continue to drift.
The next reporting cycle, along with company earnings guidance and analysts' recommendation changes would command much of the market's attention in the near future.
"We've got most of the earnings out of the way and people will start looking out for pre-announcements and updates to get an idea of things," a second trader said.
Traders said increasing tensions between India and Pakistan over the disputed Kashmir region might take their toll on U.S. trading, but to a lesser extent than in Europe. |
