Wall Street awaits testimony from the Fed chairman, considers increase in terror level, HP earnings.
May 21, 2003: 7:37 AM EDT
NEW YORK (CNN/Money) - Stocks looked to a cautious open Wednesday, as investors awaited comments on the state of the economy and the dollar from Federal Reserve Chairman Alan Greenspan and mulled an increase in the U.S. terror alert level.
Investors also cheered positive earnings news from Hewlett-Packard after the closing bell Tuesday.
At 7:15 p.m. ET, futures pointed to a flat to lower open for the major indexes.
Greenspan's appearance before the Joint Economic Committee just as the markets open takes on added meaning in light of the recent drop in the dollar. That drop has been attributed in part to the perception that the Bush administration, through some remarks by Treasury Secretary John Snow, isn't especially concerned about the currency's strength.
The greenback hit multi-year lows against the euro and the yen earlier in the week following the comments by Snow.
But Greenspan has indicated he is concerned. A German minister says Greenspan told him the administration is not pursuing a "weak dollar" policy, pointing to the damage a weak currency did to the economy in the 1930s.
"Greenspan will probably say the global economy is starting to turn around but stress there are still pockets of weakness," Steve Previs, from Jefferies International, told Reuters.
The dollar remains in focus early Wednesday, a day after the U.S. raised its terror alert level and billionaire investor George Soros revealed that he's short-selling the dollar. In Wednesday trading, the U.S. currency was slightly higher against the euro, which was buying about $1.17, and tipped higher against the yen.
Traders said the mood was likely to be cautious after the United States ordered increased vigilance against terror attacks and raised the terror alert status Tuesday to orange, the second-highest level.
"People are looking over their shoulders again and are preoccupied with the increased terror risk, which is not good for markets," Previs said to Reuters.
Some corporate news also stepped into the spotlight Wednesday morning.
Among U.S. stocks trading in Europe, Hewlett-Packard (HPQ: Research, Estimates) shares rose nearly 7 percent. The computer and related products maker posted better-than-expected earnings and sales for its fiscal second quarter, and reaffirmed forecasts for the rest of its fiscal year.
Shares of Dow component Alcoa (AA: Research, Estimates) also tipped higher in Europe. J.P. Morgan raised its rating on the aluminum maker to "overweight" from "neutral."
Cisco Systems (CSCO: Research, Estimates) also garnered some attention after DB Securities downgraded the network equipment maker citing its valuation. Shares of Cisco slide nearly 2 percent in Europe.
For more analysts comments, click here.
The Dow Jones industrial average and Nasdaq composite index nudged downward in Tuesday trading, the third straight day of losses for the major indexes.
Asian-Pacific stocks finished mixed Wednesday, with Tokyo's Nikkei index 0.5 percent lower. European markets edged lower at midday, with London's FT-100 down more than 1.4 percent.
Treasury prices gained in early trading, sending the 10-year note yield down to 3.37 percent from 3.36 percent late Tuesday. Brent oil futures rallied 25 cents to $25.90 a barrel in London, driven higher after U.S. increased the terror threat alert level Tuesday. Gold was slightly higher in London.
O Clubeinvest.com informa que nenhuma da informação
aqui facultada deverá ser entendida como conselho ou recomendação
de qualquer tipo de transacção ou investimento.
