<font color=blue>MARKET SNAPSHOT--Stocks pressured on several fronts
By Julie Rannazzisi, CBS.MarketWatch.com
Last Update: 7:27 AM ET Sep 18, 2000 NewsWatch
Latest headlines
NEW YORK (CBS.MW) - U.S. stocks looked set to open lower Monday as high oil prices, worries about earnings warnings and falling international markets converged to drive U.S. stock futures lower.
Nasdaq futures(AH=Z0: news, msgs) were off 21.53 at 3697, while S&P futures (WP=Z0: news, msgs) fell 2.20 to 1481.30.
Earnings worries are being driven by the dollar's continued strength and fears the Fed's several rate hikes in the past year will show up in lower third quarter corporate earnings.
South Korea's stock market plunged 10 percent before it was halted for trade on Monday, pummeled by Ford's decision to cancel its planned takeover of debt-laden Daewoo Group.
It wasn't looking any better elsewhere in Asia, with Tokyo down 1 percent, Taipei 2 percent and 4 percent for Hong Kong. They were all depressed by the Nasdaq's 2 percent dive on Friday.
European markets were lower by mid- morning trade on Monday, led by tech stocks on concern continued high oil prices will slow economic growth and hit company profits.
Oil prices, which cooled some on Monday in London after hitting $36 per barrel in New York Friday, are also weighing on the market.
Selective stocks
Abbot Laboratories (ABT: news, msgs) is trading at $46.50 in Instinet pre-market trading. That's $3.13 above Friday's official NYSE close, but $1.50 below its composite close. Late Friday, the company announced that it received accelerated approval from the Food and Drug Administration to market Kaletra, its antiretroviral treatment of HIV infection
Triarc (TRY: news, msgs)said it has agreed to sell Snapple to Cadbury Schweppes for $1.45 billion. Cadbury will pay Triarc $910 million in cash and assume $420 million in debt. The transaction is expected to close in the fourth quarter. As a result of the sale, Triarc will withdraw its IPO offering of Snapple.
Dresdner Bank, (DE:535000: news, msgs) Germany's third-largest bank, said it will buy U.S. investment bank Wasserstein Perella & Co for 1.6 billion euros in stock, strengthening its position in mergers and acquisitions services.
British Telecom confirmed Sunday it is in talks with its global joint venture partner AT&T about changes to its alliance, including possible spin-offs and mergers.
"These discussions include exploring ways of broadening and strengthening the scope of the relationship between BT and AT&T in business services," the group said in a statement.
Earnings and data watch
Investors won't have lots of economic data to chew on this week. August housing starts and building permits will be out. Also on tap: the July trade data, the Philadelphia Fed Index for September and the August Treasury budget statement.
Meanwhile, the real question for the market isn't how well third-quarter earnings will fare but how much they will slow in the fourth quarter, earnings compiler First Call said.
The number of negative pre-announcements thus far stands at 136 versus the 129 registered at this same stage during the third quarter last year and the 98 seen during the second quarter of 2000. Still, though many more large companies have pre-announced this quarter, the shortfall amount has remained relatively small, according to First Call.
Earnings growth for S&P 500 companies are expected to come in at 17.3 percent in the third quarter, down from the 18.8 percent projected on July 1. First Call notes that earnings growth will drop more in the fourth quarter than in the previous two quarters.
Among the companies reporting next week: Cyberian Outpost, Circuit City, Jabil Circuit, Progress Software, Lennar, Goldman Sachs, FedEx, Engage, Bed Bath & Beyond, Dean Foods, Lehman Brothers, CMGI, Liberate Technologies, ConAgra, Morgan Stanley Dean Witter and Texas Industries.
Friday's trading activity
The major averages got clobbered as investors remained nervous over future revenue growth and higher oil prices, which staged a furious rally Friday. The Nasdaq fell to its lowest level in five weeks while the Dow closed below the 11,000 mark for the first time since Aug. 10.
Even news that consumer prices dropped for the first time in 14 years failed to generate excitement on Wall Street, with investors instead zeroing in on the day's batch of profit warnings.
"There's uncertainty over future inflation data," said Gabriel of IDEAglobal, referring to the impact of oil on the inflation data over the next months.
"This is a market with expectations that are too high," Gabriel continued, noting how companies, like Oracle Friday, get clocked even after they report better-than-expected results.
The Nasdaq Composite ($COMPQ: news, msgs) lost 78.62 points, or 2.0 percent, to 3,835.24 while the Nasdaq 100 Index ($NDX: news, msgs) shaved 61.07 points, or 1.6 percent, to 3,676.35.
With the big Nasdaq stocks under the gun, observers say the index lacks crucial support. And breadth has been incredibly negative on the Nasdaq.
Julie Rannazzisi is markets editor for CBS.MarketWatch.com. |
