To: ABE who wrote (21772 ) 11/7/1997 9:02:00 AM From: Gary Korn Respond to
(COMTEX) U.S. STOCK OUTLOOK: EXPECT SHARP LOSSES ON ASIA AND JOB
U.S. STOCK OUTLOOK: EXPECT SHARP LOSSES ON ASIA AND JOBS DATA
Chicago-Nov. 7-FWN--U.S. STOCKS AND STOCK INDEX FUTURES
are expected to open sharply lower this morning, in the
wake of another round of hefty losses in the world equity
markets--led by Southeast Asia. Additionally, stronger-than-
expected economic data, as seen in this morning's release of
the October employment report, further adds to the case for
a bearish opening for stocks, analysts said.
Analysts expect the Dow Jones Industrial Average (DJIA)
is expected to open roughly 100 points lower today, while
December S&P 500 futures are expected to open at their limit
down--the full 15-point first limit. If the futures remain
locked limit down for 10 minutes--there will be a two minute
trading halt. If this occurs, when trading resumes, the next
limit will be down 30 points in the S&P 500 futures.
Overnight, in Southeast Asia, equity markets posted
sharp losses. The Nikkei broke sharply after a report the
Bank of Yokohama, Japan's largest regional bank, will dump
its entire stock portfolio. The Nikkei dropped 4.2% or
697.51 points to close at 15,836.36.
"The jobs figure has been overshadowed by the Asian
situation. Stocks have fallen sharply and are trading limit
down in the futures," one New York-based stock analyst said
this morning.
Early today, the U.S. government reported that non-farm
payrolls rose 284,000 in October, while the unemployment
rate rose 4.7%--a 0.2% increase. Most analysts had expected
a 200,000 increase in non-farm payrolls during October.
"This (the jobs data) simply adds to the malaise in
stocks," the New York analyst added. "The strength in the
economy makes it more likely that the Fed will eventually
have to raise rates," he added.
"There are two reasons that there is bad news for
stocks today. The employment report was too strong, and you
have (equity) markets around the world declining very, very
sharply--especially in Japan," echoed Hugh Johnson, chief
investment officer at First Albany Corporation. "It appears
the currency crisis in Southeast Asia is infecting their
banking system. That is very, very depressing news because
the Japanese are substantial lenders around the world," Johnson added.
While U.S. equity markets have managed to post a
slightly firmer tone throughout the week, traders warn the
market remains quite vulnerable to additional downside
losses. Last week, instability in the Southeast Asian
markets was the initial "triggerpoint" for the largest point
loss ever in the DJIA--down over 550 points on Oct. 27.
More to follow...
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