The major indexes prepared for a weak open as dollar hit multi-year lows vs. other major currencies.
May 19, 2003: 7:36 AM EDT
By Mark M. Meinero, CNN/Money Staff Writer
NEW YORK (CNN/Money) - Stocks were poised for a cautious start Monday, as concern over weakness in the dollar took hold ahead of the opening bell.
At 7:15 a.m. ET, futures pointed to a lower start for the major indexes.
The renewed decline in the dollar overnight was attributed to comments by Treasury Secretary John Snow, who said he didn't see problems with the currency's recent weakness. He also said the strength of the dollar would not be based on its value relative to other currencies, but rather on the public's confidence in it and its resistance to counterfeiting.
As a result, the dollar fell to a four-year low against the euro at a little over $1.17 and a two-year low versus the yen at just over ¥115.
The dollar has been weakening against other major currencies in recent weeks, and U.S. officials, as well as those in Europe, have not appeared concerned with its falling valuation. There have been reports, however, that the Bank of Japan has been buying up the dollar to slow its decline versus the Japanese yen.
"Markets took Snow's comments to mean the U.S. was comfortable with a weaker currency and gave the commodity currencies another push higher," James Shugg, international economist at Westpac, told Reuters. "It's just another step in the process of U.S. dollar depreciation which began in February last year and may have another year to go."
For details of Friday's session, click above
The day's only measure of the economy will come from the Conference Board in its index of leading economic indicators, due at 10 a.m. ET. Economists surveyed by Briefing.com expect to see no change in the index for April, compared with a 0.2 percent decline in March.
Not a lot of companies are slated to report quarterly results, but one that might be closely watched is No. 2 home improvement retailer Lowe's (LOW: Research, Estimates). The company's comments will be picked through to determine how the company is doing in its battle to overtake Home Depot (HD: Research, Estimates), the Dow component slated to report its quarterly figures Tuesday.
Also on the schedule before the bell are apparel retailer Limited (LTD: Research, Estimates), specialty toy retailer Toys "R" Us (TOY: Research, Estimates) and food processor Campbell Soup (CPB: Research, Estimates). After the close are department store operator Nordstrom (JWN: Research, Estimates) and measurement technology developer Agilent Technologies (A: Research, Estimates).
The energy sector could see a boost Monday. Merrill Lynch upgraded the sector to "overweight" from "market weight" before the opening bell, citing compelling values and fading volatility.
The Nasdaq, the barometer for technology stocks, has been higher for five straight weeks as investors see some positive signs in the quarterly results reported in the sector. Investors are also seeing some relief in the economy in the aftermath of the war that toppled Saddam Hussein in Iraq.
Despite Friday's nearly 13-point drop, the Nasdaq gained 1.2 percent last week. The Dow, down 34 points Friday, still managed a 0.9 percent gain for the five days (see chart for details of Friday's session).
Asian-Pacific stocks ended lower Monday, with Tokyo's Nikkei index down nearly 1 percent. The strong euro actually hurt European markets, which mostly slipped at midday.
Among U.S. stocks trading in Europe, AOL Time Warner (AOL: Research, Estimates) was slightly lower. The media company, parent of CNN/Money, had its biggest weekend movie hit ever as "The Matrix Reloaded" grossed $93.3 million.
Treasury prices were little changed in early trading, with the 10-year note yield at 3.43 percent. Brent oil futures rose 20 cents to $26.30 a barrel in London. Gold rallied in early trading, trading at three-month highs in Europe.
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