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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: Dealer who wrote (25792)	12/19/2000 9:08:44 AM
From: Dealer	Read Replies (1) \| Respond to of 65232

M A R K E T .. S N A P S H O T -- Steady open in store Markets hope to get a 'Fed bounce' By Julie Rannazzisi, CBS.MarketWatch.com Last Update: 8:53 AM ET Dec 19, 2000 NEW YORK (CBS.MW) - The major U.S. averages are seen opening on the steady side Tuesday, with range-bound trading expected as investors await the conclusion of the Fed's policy-setting meeting. The gathering is widely expected to produce a drop of the current tightening bias in favor of a neutral stance - which would indicate the central bank now believes risks to the U.S. economy are evenly balanced. Alan Greenspan's remarks on Dec. 5 telegraphed the Fed's intention to move to a more even approach. At the time, the Fed chief said the abating wealth effect from the stock market was dampening demand, suggesting that perhaps current policy was too restrictive. March S&P 500 futures shed 3.60 points, or 0.3 percent, but were still trading roughly 0.50 point above fair value, according to HL Camp & Co. Nasdaq futures, meanwhile, slipped 6.50 points, or 0.2 percent, relinquishing earlier gains. In shares trading before the opening bell, Solectron (SLR) rose $1.58 to $28.30. Late Monday, the contract electronics manufacturer registered a first-quarter profit from operations of 29 cents a share vs. the First Call estimate of 28 cents a share. Microsoft (MSFT) edged up 19 cents to $48. The stock has seen 14 percent of its value lopped off over the past couple of trading sessions after warning that it'll miss its second-quarter numbers. On Tuesday, the Wall Street Journal reported that chief executive Steve Ballmer called on top executives to scale back some expenditure for the fiscal year. In earnings news, Morgan Stanley Dean Witter (MWD) posted a fourth-quarter profit of $1.06, down 25 percent from year-ago levels. MSDW said weak results in fixed income and private equity, as well as unusual compensation pressure in institutional securities, contributed to a decline in operating margins. The stock ended up 38 cents to $69.25 on Monday. And Goldman Sachs (GS) posted a profit from operations of $1.50 a share in its fourth quarter, topping the First Call estimate of $1.38 a share. Shares ended down 75 cents to $85.94 ahead of the news Monday. Meanwhile, Dow-company SBC Communications (SBC) said it's targeting earnings-per-share growth of 11 to 14 percent in 2001 and revenue growth of 8 to 9 percent. First Call currently pegs EPS growth at 14.5 percent. Further, SBC reiterated its fourth-quarter EPS target of 56 to 58 cents a share, before one-time items. Separately, Trim Tabs reported that margin debt at all member NYSE outfits dropped by a smaller-than-expected 14.3 billion to $219.1 billion at the end of November from the $233.4 billion registered at the end of October. Trim Tabs said margin debt was down 6.6 percent in November vs. a 10 percent tumble in market cap. The fund flow tracker said this may indicate that downtrodden tech stocks could stay weak for a while longer - possibly until margin debt gets back to the 180 billion level. Finally, margin debt is up 20.2 percent from the end of October 1999 - a period when margin debt began to climb. In the Treasury arena, prices traded lower. The front end of the yield curve is aggressively pricing a near-term Fed ease. In fact, the return on a 2-year note is currently an amazing 117 basis points below the fed funds rate of 6 1/2 percent - a target that has been in place since May. The 10-year Treasury note fell 7/32 to yield ($TNX) 5.20 percent while the 30-year government bond lost 17/32 to yield ($TYX) 5.48 percent. In economic news, the October trade deficit came in at $33.18 billion vs. expectations for a $32.7 deficit and lower than September's $33.74 billion deficit. View Economic Preview, economic calendar and forecasts and historical economic data. Cornering the currency market, dollar/yen edged up 0.1 percent to 112.26 while euro/dollar erased 0.5 percent to 0.8910. --------------------------------------------------------------------------------