International Markets: New York - Stocks and bonds set to fall
Sunday 25 January 1998
The outlook for bonds is also clouded, dragged down by a plunging dollar, allegations that President Bill Clinton asked a White House intern to lie under oath, and signs of stability in Asia. "Add all of those together and they don't present a very good argument for buying bonds," said David Duerson, at BancAmerica Robertson Stephens.
The benchmark 30-year Treasury bond yield rose 11 basis points on Friday to 5.97 per cent, the biggest one-day loss since 28 October. The dollar tumbled to a two-month low against the yen on signs that Japan's government will take more measures to help the economy out of a six-year slump.
"Weakness in the dollar is a clue for foreign investors to sell our market and bring money home," said Neil Toth, bond manager for the Ohio Public Employees Retirement System.
Stocks struggled last week as companies such as IBM and Sears Roebuck reported fourth-quarter earnings that generally met expectations, yet warned of 1998 profit shortfalls prompting analysts to cut earnings forecasts further.
"Earnings expectations for 1998 are still a problem that people haven't dealt with," said Tony Spare, chief investment officer at Spare, Kaplan, Bischel in San Francisco. "But at least now they're talking a little bit about the first quarter."
Wall Street analysts expect the companies in the S&P 500 to post earnings growth of 13.6 per cent in the current quarter, down from an estimate of 16.7 per cent just two weeks ago.
For the week, the Dow Jones Industrial Average dropped 0.7 per cent and the Standard & Poor's Index fell 0.6 per cent. The Nasdaq rose 0.8 per cent with the help of telecommunications equipment makers Andrew Corp and Qualcomm Inc, which reported an unexpected fourfold rise in profit.
The prospect of lower earnings because of the slowdown in South-east Asia helped send a number of stocks lower last week. Oilfield and drilling companies were the worst-performing groups, though, as the mild winter and slumping Asian demand pushed prices to a four-year low.
Merrill Lynch fell 9.4 per cent on Tuesday after reporting lower-than- expected fourth-quarter earnings. The firm said 1998 will be a tough year because of "recent events in Asia and unsettled conditions in US markets."
Copyright: IOS & Bloomberg
- 2 Exclusive: Abusers using spyware apps to monitor partners reaches 'epidemic proportions'
- 3 Andy Murray takes to Twitter to show off his Christmas jumper
- 5 Top 10 travel destinations for 2015: From Haiti and Alaska to Namibia and Iceland
PlayStation and Xbox hacked by Lizard Squad
Exclusive: Abusers using spyware apps to monitor partners reaches 'epidemic proportions'
Dublin court rules brain-dead pregnant mother's life support can be switched off
Margaret Thatcher 'expressed fears of Asian rising' at Anglo-Irish summit in 1984
The 'Black Museum': After 150 years, public set to see exhibits from police’s grisly crime museum
British actor Idris Elba cannot star as James Bond because he is black, says shock jock Rush Limbaugh
Rozanne Duncan: Ukip expels councillor for 'jaw-dropping' comments made in BBC TV interview
Germany anti-Islam protests: 17,000 march on Dresden against 'Islamification of the West'
Ukip member gets into Christmas spirit with Union Flag plea to Santa 'for our country back'
BBC director Danny Cohen: Rising UK antisemitism makes me feel more uncomfortable than ever
Katie Hopkins speaks out on childhood obesity: 'Parents of fat children should be prosecuted for child cruelty'
iJobs Money & Business
Not specified: Selby Jennings: VP/SVP Credit Quant Top tier investment bank i...
Not specified: Selby Jennings: Quantitative Research | Global Equity | New Yor...
Not specified: Selby Jennings: SVP Model Validation This top tiered investment...
Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...