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U.S. stocks seen opening up, war fears ease a bit

  1. madmacs

    25,374 Posts.

    U.S. stocks seen opening up, war fears ease a bit
    22:05, Tuesday, 8 October 2002

    By Denise Duclaux

    NEW YORK, Oct 8 (Reuters) - Stocks are set to tick up at
    Tuesday's open after a speech by President George W. Bush
    helped rein in rampant war fears and lured skittish investors
    back into the market after four straight sessions of declines.

    "We are looking at a relief rally," said Peter Cardillo,
    director of research at Global Partners Securities Inc., a day
    after the market scraped out fresh multi-year lows.

    Bush said in a prime-time televised speech late on Monday
    that military action against Iraq was not imminent and vowed to
    build an international coalition against Saddam Hussein if he
    defied demands to disarm.

    His speech helped take the edge off war worries that have
    plagued Wall Street for weeks now. but concerns about the U.S.
    economy and corporate profits are still dogging the market. The
    third-quarter earnings season starts to heat up this week.
    About 576 companies have issued profit warnings so far for the
    third quarter, up from 444 warnings in the same period in the
    second quarter, according to Thomson First Call.

    "This rally (would be) from a very oversold condition. Does
    it last? Where does it go from here? From a technical
    standpoint the market remains extremely weak and the technical
    outlook continues to deteriorate," Cardillo said.

    Equity futures weakened as the opening bell approached, but
    held onto gains. The Standard & Poor's 500 futures for December
    gained 3.20 points to 791.70. The Dow Jones industrial futures
    for December added 31 points to 7,474, while Nasdaq 100 futures
    for December rose 1.50 points to 814.50.

    Traders will be eyeing the latest developments in the
    lockout at West Coast ports that handle $300 billion in trade a
    year. Bush created a board of inquiry that will report to him
    on Tuesday about the economic costs of the lockout and the
    parties' positions.

    That will clear the way for the administration to seek an
    injunction -- possibly as early as late Tuesday -- to reopen
    the ports for 80 days. The lockout, now more than a week old,
    has sparking widespread fears of new disruption in the
    faltering economy and is beginning to weigh on the market.

    Insurers, telecoms and retailers drove European shares
    modestly higher on Tuesday. The FTSE Eurotop 300 index <.FTEU3>
    of pan-European blue chips edged up 0.07 percent, well off
    earlier highs.

    Tokyo's Nikkei average bounced off a 19-year low to end
    slightly higher on Tuesday, but concerns about Japan's fragile
    economy put a damper on gains. The benchmark Nikkei average
    <.N225> rose 0.24 percent or 20.90 points to 8,708.90 after the
    previous session's tumble to its lowest since June 1983.

    In corporate news, PepsiCo Inc. said before the
    bell that its third-quarter profit rose as the food and soft
    drink company's promotions boosted volume, but revenue grew at
    a slower rate.

    Drugmaker Schering-Plough Corp. , facing questions
    about the timing of a profit warning issued last week, on
    Monday after the close said the U.S. Securities and Exchange
    Commission has asked for information regarding meetings with
    its investors. The company said it would cooperate with the
    SEC, but believes it has complied with all applicable
    securities laws.

    JDA Software Group Inc. said on Monday after the
    close its third-quarter profit and revenue would be lower than
    earlier expectations and last year's numbers due to a shortfall
    in software license sales.

    Entegris Inc. , a maker of products that protect
    semiconductors and disk drive materials during processing, on
    Monday after the close reported a fourth-quarter profit, but
    said it expects sales in the current quarter to fall about 20
    percent due to market uncertainty.

    Stocks fell to close at new multiyear lows on Monday. A
    late wave of selling sent the tech-packed Nasdaq Composite
    Index <.IXIC> down 20.50 points, or 1.80 percent, to 1,119.40.
    Nasdaq, which hit a session low of 1,113.36, closed at levels
    last seen in August 1996.

    The blue-chip Dow Jones Industrial average <.DJI> ended
    down 105.56 points, or 1.40 percent, at 7,422.84. The broader
    Standard & Poor's 500 Index <.SPX> lost 15.30 points, or 1.91
    percent, to 785.28. For the Dow it was the weakest finish since
    mid-1997, and for the S&P the lowest close since the spring of

    Support -- where buyers are expected to swoop in -- is at
    1,080 for the Nasdaq, 7,261 for the Dow and 775.68 for the S&P
    500, according to research firm Schaeffer's Investment
    Research. Resistance -- the point where sellers are likely to
    emerge -- is at 1,182 for the Nasdaq, 7,591 for the Dow and 800
    for the S&P. The levels are key elements of technical analysis,
    which studies prices, volume and charts.
    (( -- Wall Street Desk, 646-223-6112 -- ))

    (c) Reuters Limited 2002

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