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Technology Stocks : Ascend Communications (ASND) -- Ignore unavailable to you. Want to Upgrade?

To: Narotham Reddy who wrote (38406)	3/8/1998 6:59:00 PM
From: Glenn D. Rudolph	Respond to of 61433

Perhaps the market analysts will talk the market down: "WEEK AHEAD-U.S. stocks in peril, but dlr could fly Reuters Story - March 08, 1998 18:30 %ELI %ENT %US %DPR %STX %FRX %DBT %GVD %INT INTC MOT CPQ V%REUTER P%RTR By Jennifer Westhoven NEW YORK, March 8 (Reuters) - Bonds and stocks could stumble early this week as each confronts its separate demons, analysts said, but that dollar should be able to move higher with an obstacle-free path ahead. Stocks look the most ripe for possible trouble. The market has an immediate peril to face off on Monday: Compaq's Friday stunner that first quarter profits will fall far below Wall Street estimates. The news could finally whack stocks back into alignment with bonds, analysts said. "It's astounding. Stocks seem immune to bad news," said Ricky Harrington, technical analyst for Interstate/Johnson Lane. "That has to change. We just don't know when." Intel Corp started the wave of weak profit warnings Wednesday, to be followed a day later by similar news from Motorola Inc Thursday and Compaq Computer Corp Friday. Despite some short-term stumbling, stocks virtually ignored the warning shots. The Dow rose 24 points for the week and the Standard & Poor's 500 Index hit a new record Friday. The gains look disturbing because they are even more anomalous against the backdrop of a mild correction in bonds, analysts say. The yield on the U.S. 30-year Treasury bond seems stubbornly perched above six percent with a mild correction underway after a sharp rally in bonds. "In bonds, we just got this job growth data and we are revising up first quarter figures, so there is worry about a tightening," said Jim Glassman, senior economist at Chase Securities Inc. "But meanwhile, there's this roar you can hear, from all these companies really struggling with Asia." The bond market could be negative early in the week as investors take a defensive posture to brace for the Thursday release of February retail sales data, the focus of this week's activity, he said. Economists surveyed by Reuters, on average, expect a 0.5 percent rise in retail sales. The Producer Price Index is also due, but the consensus is for a tame inflation outlook. "We have spent three a half months debating this Asian crisis, and at first it looked like it would cause a recession. Now people say it could have almost no impact," said Hillel Waxman, chief forex dealer at Bank Leumi Trust Co of New York. Currently, the U.S. markets have priced in a few beliefs, analysts said. One is that social unrest remains largely confined to Indonesia and is not spilling over into Korea. Also, the brunt of the damage to U.S. companies appears to be largely limited to technology stocks and some airlines. Trouble would come if either of those two issues slipped past its agreed-upon limits, they said. "If flagships like Coke and Procter & Gamble were to preannounce, that's a real risk for the economy", Interstate Johnson Lane's Harrington said. Meanwhile analysts expect the dollar to continue rising, facing mostly technical resistance. "Its only other handicaps are verbal interventions from the Japanese and maybe some side comments from the Bundesbank," said Waxman. "We're looking for the dollar to move back up to 130 against the yen and at least to reach 1.8450 against the mark by the end of the week," he said. Dollar/yen traded at 128 on Sunday, while dollar/mark was at 1.8371. "The dollar did not fare badly when stocks did poorly (on Thursday) and it's good to have that separation," he said."