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Rate cut is not enough,Bernanke himself needed.
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Investors banking on more interest-rate cuts may get some clues about what comes next from Federal Reserve Chairman Ben Bernanke, who testifies before the Joint Economic Committee of Congress on Thursday.
I believe that anything that he says has the potential to move the markets.After the Fed cut interest rates for the second time this year on Wednesday, stocks rallied. But one day later, the gains were erased as the view took hold that further cuts were not in the cards.
With concerns about a credit crunch and losses in subprime mortgages refusing to go away, brokerage downgrades knocked several financial stocks lower.
Investors will be anxiously awaiting the quarterly results of American International Group Inc due after the market close on Wednesday. The insurer's stock has been hitting 52-week lows on rumors that the results will include losses in subprime securities.
For the past week, the Dow Jones industrial average fell 1.53 percent and the Standard & Poor's 500 Index declined 1.67 percent. But the Nasdaq Composite Index 0.22 percent.
Despite the turmoil, stocks are still higher for the year, with the technology-heavy Nasdaq Composite leading the way.For the year so far, the blue-chip Dow average is up 9.08
percent, while the S&P 500 is up 6.44 percent and the Nasdaq is up 16.36 percent.
One of the key technology bellwethers, Cisco Systems Inc , the largest U.S. communications equipment maker, will report earnings on Wednesday.
The tech sector has been kind of pulling up the whole market up to now and I believe it will continue to do so for a while.
Other companies due to report earnings this week include Sun Microsystems Inc (on Monday, News Corp on Wednesday and Walt Disney Co on Thursday.
After Thursday's sharp decline in stocks, the three major U.S. stock indexes rebounded Friday morning following news that October nonfarm payrolls grew by 166,000 -- more than twice as much as the consensus forecast. But the gains evaporated on new concerns about financial companies exposed to subprime losses.
I think market is searching for a general theme that can be the catalyst for further gains.
CRISIS OF CONFIDENCE
Merrill Lynch is searching for a new chief executive after the sudden retirement of E. Stanley O'Neal following a huge write-off, and Citi's Charles Prince has been under pressure from shareholders unhappy with a falling stock price.
The week's schedule of economic news is on the thin side, but there are still some significant reports on tap.
On Monday, the Institute for Supply Management reports on the service sector of the economy. The group's index of October activity is expected to fall to 54.0 from 54.8 in September, according to the median forecast of economists polled by Reuters.
On Friday, the Commerce Department reports on international trade for September. The monthly deficit is expected to rise to $58.5 billion from $57.6 billion in August.
The week will see data on productivity and unit labor costs, wholesale inventories, consumer credit, import and export prices, and the first November reading from the Reuters/University of Michigan Survey of Consumers. The consensus forecast is for the consumer sentiment index to decline to 80.0 from 80.9 in the final October survey. |
| Tarih
: 05.11.2007 |
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© 2006 Mert TOKER All Rights Reserved. |
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