Wall Street set for higher open
NEW YORK–Wall Street appeared headed for a strong open Thursday after IBM Corp. reaffirmed its profit outlook and investors hoped that the panic selling that cascaded through global markets a day earlier was overdone.
Stock markets around the world moved mostly higher one day after the Federal Reserve and other leading central banks cut interest rates to help fight the credit crisis and stimulate the global economy.
Asian and European markets moved higher on Thursday, and the Dow Jones industrial average futures was up 136 points ahead of the opening bell in New York.
There was hope by investors that perhaps Wall Street is getting closer to finding a bottom after the worst five-day rout since 1987. On Wednesday, the Dow gave up 189 points to close at – and is now down about 35 per cent from its high of 14,164.53 reached exactly one year ago.
While rate cuts can take up to a year to work its way through the economy, there was some positive signs Thursday that corporate earnings might come in better than expected. IBM, a Dow component, posted third-quarter results that beat forecasts and reaffirmed its full-year earnings guidance.
There might also be a bit more hope in the market on a report that the Bush administration is mulling a plan to stabilize hobbled U.S. banks. The government is considering taking ownership stakes in certain U.S. banks as an option for dealing with a severe global credit crisis.
That certainly could help motivate investors on Thursday, though early signs that the market will move higher has often been erased with trading extremely volatile during the past few weeks. Ahead of the bell, Dow futures rose 136, or 1.46 per cent, to 9,327. Standard & Poor’s 500 composite futures added 17.70, or 1.80 percent, to 998.40, and Nasdaq-100 futures added 33.75, or 2.56 per cent, to 1,353.75.
Investors will also be watching to see what kind of an effect short selling will have on the market now that a three-week ban imposed by regulators has expired. Some analysts believe the unprecedented ban on short selling – an effort to bolster investor confidence amid the worst financial crisis since the stock market crash of 1929 – did more harm than good at a time of historic market volatility.
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on Oct 9 2008. Filed under International.
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