Stock outlook improves after economic data
biz.yahoo.com
Wednesday July 3, 9:27 am Eastern Time
Stock outlook improves after economic data
By Allen Wan
NEW YORK (CBS.MW) - The outlook for the broader market was improving ahead of the open Wednesday as the latest set of data showed an economy firmly on the mend.
But technology stocks still looked soft, with chip issues expected to be weighed down by chip giant Advanced Micro Devices' sales warning for its second quarter.
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The Nasdaq 100 tracker (AMEX:QQQ - News) was down 0.5 percent at 23.84 on the Instinet. S&P futures were down 2 points.
First-time claims for state unemployment benefits fell 11,000 to 382,000 in the latest week - the lowest level since March 2001. The numbers show the labor market is healing slowly from recession.
But the question remains whether investors will latch on to bullish jobless claim numbers when they haven't responded to other recent signs that the economy is set to rebound strongly this year
May factory orders and June non-manufacturing NAPM will be released at around 10 a.m. ET. The Labor Department will release the June jobs report on Friday.
Bellwether techs were lower, but some stocks were shaking off overnight weakness. Read Indications.
Shares of mobile devices maker Research in Motion (NasdaqNM:RIMM - News) , which topped estimates for its first fiscal 2003 quarter, traded at $11.55 on Instinet, $1 above the Tuesday close but down from the $11.90s levels overnight.
But on the chip front, AMD (NYSE:AMD - News) slid 15 percent on Instinet to $7.50 at one point, before resting at $7.75-7.85. The chipmaker warned of a 3-16 percent miss on its own revenue target in the second quarter. The warning is the second this month from AMD; rival Intel Corp. (NasdaqNM:INTC - News) also warned in June amid a weak PC market. Intel was down 51 cents at $16.06 on Instinet.
WorldCom (NasdaqNM:WCOME - News) will remain in the spotlight following comments from the CEO late Tuesday defending the company's actions in the lead-up to the explosive disclosure that it had wrongly booked $3.8 billion in expenses. On Tuesday, the Wall Street Journal said that the company's internal auditor had a different version of events. IDT (NYSE:IDT - News) also offered to buy WorldCom's MFS and Brooks Fiber units as well as the consumer and small-business arms of its MCI long-distance unit for $5 billion, Read story.
Shares gained one cent at 13 cents in pre-market trade.
Volumes were not strong in pre-market trade, dealers said. "We've been seeing this for a while: Light volume, no buyers and the market heading inexorably lower," said one London dealer. In something of a positive for U.S. stocks, the dollar was higher against the euro at around the 98 U.S. cents level.
On Tuesday, the Dow Jones Industrial Average (CBOT:^DJI - News) fell 102 points, or 1.1 percent, to 9,007 -- recovering from a session low of around 8,960. The Nasdaq Composite (NasdaqSC:^IXIC - News) tumbled 46 points, or 3.3 percent, to 1,357. Read Tuesday's Market Snapshot
It was looking messy in Europe, with stock markets there sharply lower on fallout from Vivendi Universal (NYSE:V - News) and steep declines for Wall Street on Tuesday. Asia fared much better, with Tokyo's Nikkei jumping 1.8 percent as banks surged on reports that public funds might be used to help them cover losses for their nonperforming loans. Read Global Markets page.
Shares of Vivendi Universal came under renewed pressure in Paris, dropping 17 percent as board members gathered to tap a new chief executive to navigate the company through its debt reduction strategy. Its U.S.-traded shares plunged 21 percent Tuesday. Read latest Vivendi story.
In the bond market, Treasurys were mixed. The benchmark 10-year note (CBOE:^TNX - News) fell 4/32 to 101 1/32, yielding 4.74 percent, up 1 basis point from the lowest yield in seven months. The 30-year government bond (CBOE:^TYX - News) gained 14/32 to yield 5.47 percent, up 3 basis points. |
