US stocks seen up at open, but relief short-lived
By Holly Rosenkrantz
NEW YORK, Sept 1 (Reuters) - U.S. stocks were seen opening sharply higher Tuesday after Monday's massive sell-off, but early bargain-hunting was expected to give way to extreme volatility, with no significant recovery in sight.
While overseas markets tumbled following yesterday's steep slide, bottom-fishing on Wall Street may produce an early jump of 130 to 150 points in the Dow Jones Industrial Average, analysts said.
But an early rise was not expected to hold, and see-saw trading was seen for the day.
''The more rational people will come in with some bargain-hunting, but sustainability will be the big question,'' said Larry Wachtel, an analyst at Prudential Securities. ''Does any rally in this market have legs when people have been told to sell into strength? It's going to be a tumultuous day.''
Signs of early optimism were seen in the futures market, which gained steam as the start of the trading session approached. At 0735 EDT/1135 GMT, the September futures contract on the S&P index was up 27 at 981.
European markets rebounded from early lows in the wake of improving expectations for the start of trading on Wall Street, and Tokyo's key Nikkei 225 index bounced back to close 1.86 percent higher.
But overseas performances were seen playing a minor role in guiding Wall Street through the day.
Monday's plunge raised more questions about whether Wall Street is suffering from a correction or is entering a bear market.
''We're not going to go straight up from here,'' said Peter Cardillo, director of research at Westfalia Investments.
Corporate stock buyback programs announced in the wake of lower share prices could be viewed as an endorsement of the market's long-term strength, analysts said.
Among companies buying back their stock is Dow component Boeing Corp. (BA - news), whose shares rose to 32-1/4 from 30-15/16 in after-hours trade Monday following its buyback announcement.
Clues about the U.S. economy are expected to come from the 1000 EDT/1400 GMT release of National Association of Purchasing Management data for August.
biz.yahoo.com
Regards, Jeff
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