thestreet.com mentions SJ Mercury article on ASND/SRA (also mentioned in headline above story)
thestreet.com
Wake-Up Call: Japan Worries
Weighing on Stocks
By Justin Lahart
Senior Writer
7/31/98 9:17 AM ET
Stocks don't look so good this morning, but they also
don't look as bad as they did ahead of a
stronger-than-expected second-quarter gross domestic
product release.
The government's preliminary GDP estimate showed a
1.4% increase -- weak, but much better than expectations
that it would come in flat.
The Treasury market eased only slightly on the report. At
about 9 a.m. EDT, the 30-year Treasury market was off
6/32 to 105 15/32, lifting the yield to 5.74%.
The GDP release has helped ease fears that the economy
might actually be headed into a mild recession, and the
S&P 500 futures have recovered substantially. Up 2,
they're still 1.25 below fair value, indicating a negative
open.
"I think we're going to be seeing more of what we were
seeing earlier in the week," said Dan Mathisson, head
stock trader at D.E. Shaw. "The market just has a heavy
feel to it. All week long it seems like every time I bid for
anything it gets whacked immediately."
Putting added weight on the market today: concerns that
Japan will take a hands-off approach to the yen. Early in
Tokyo yesterday, Japan's new finance minister Kiichi
Miyazawa told reporters, "The yen and stocks should be
left to the markets. They should not be subject to
constant intrusions like the joint intervention by Japan and
the U.S. The markets are smarter and cannot be fooled."
A sharp rise in dollar/yen ensued.
Miyazawa pulled back later, saying that excessive
weakness in the yen is undesirable. The damage's done,
however -- dollar/yen is up another 0.49 today at 144.28
and plenty of people have decided that Japan plans to
export its way out of trouble. The trouble with this, of
course, is that a weaker yen would start China griping
about how it's going to devalue -- and that sets off all
those worries that the market had back in May and early
June.
Despite worries over the yen, Japan stocks rose on hopes
that the new government, whose explicit mission is to do
something about the economy (stupid), will get cracking.
The Nikkei climbed 177.37 to 16,378.97, with exporters --
surprise -- setting the pace.
Hong Kong investors held fire in the face of the falling yen,
concentrating instead on HSBC's interim results, due out
on Monday. The Hang Seng climbed 30.04 to 7936.20.
Europe's major markets were putting in a mixed
performance. In Germany, the Dax was up 50.42 at
5931.29, while in Paris, the CAC was off 4.25 at 4193.39
and in London the FTSE was down 0.7 at 5910.
The San Jose Mercury News reports that Ascend
(ASND:Nasdaq) will buy Stratus Computer (SRA:NYSE)
in a stock deal valued at $800 million.
In an interview with The Wall Street Journal, Cendant
(CD:NYSE) CEO Henry Silverman said that the company
may sell the software and publishing businesses that
were part of CUC, and will consider selling part of an
interactive network in a public offering. |
