| Stock market rise delayed The prospects for economic growth, which experts were talking about a few weeks ago, have been pushed back indefinitely. The season of corporate reports of the world's leading companies, now in its third week, has not met the hopes of analysts and players for a quick revival of business activity. The Russian market is hiding. The players became quiet and waited, looking first at America and then at Argentina.
Although not all companies have published quarterly reports yet, even the most notorious pessimists did not expect such results. Many companies warned of lower revenues and profits in the near term or refused to make forecasts at all. Attempts to warm up the market failed. The effect of the relatively good news from the Big Three (Intel, IBM, Microsoft) and some other companies (Nokia, Dell, Sun Microsystems) was short-lived.
Since the beginning of this week, another portion of negativity has poured into the market. Lucent Technologies, recently the world's largest maker of telecommunications equipment, reported a quarterly loss that far exceeded analysts' forecasts and major new staff cuts.
AT&T, the largest US telecommunications operator, warned that its full-year earnings could be lower than expected. The leader in online retail trade, Amazon.com, made similar statements. The income of the oil company Exxon Mobil turned out to be lower than the predicted level.
After this news, investors' mood deteriorated completely. The Dow Jones index fell by 1.76% on Tuesday to its lowest point in the last 3.5 months (10,241.12 points). Other indices did not survive either. The Nasdaq lost 1.47%, the Standard & Poor's 500 lost 1.63%. The market, according to observers, almost did not react to the diplomatic optimism of US Federal Reserve Chairman Alan Greenspan, who once again announced a possible reduction in the discount rate. Few people believe in the effect of the Fed’s monetary policy anymore, believe the investment company InterStock.
According to Valentin Zhurba from NatInvest Securities, there is currently no leader on the market who can improve the situation. “Perhaps the data on long-term orders and the volume of US GNP will change something (they will be published today. - Ed. ),” he told us.
Europe is following America. Local producers are also adding fuel to the fire. Yesterday, European indices fell to their lowest levels in the last 1.5-2 years. The Dow Jones Europe Stoxx-50 index fell by 1.3%, the British FTSE-100 by 1.07%, the German DAX and the French CAC-40 lost 0.72% and 0.96%, respectively.
Japan has long been unable to compete with the Old and New Worlds. True, yesterday she managed to distinguish herself. The Nikkei-25 index rose 0.08%. But experts explain this behavior by the increase in share prices of Furukawa Electric Co, which announced its intention to buy the fiber optic business of the American Lucent.
Emerging markets securities quotes continue to dance to the Argentine tune. On Tuesday, the MerVal index fell 3.52% amid low player activity. Yesterday this trend continued. The reason was information that the opposition government of Argentina postponed the vote on the issue of cutting budget expenditures for a week. Bonds due in 2005 fell in price by 1.45%, and their yield rose to 27.77%. According to Denis Nushtaev from IFC Metropol, such a political imbalance could force investors to leave the market.
Russia does not seem to know how to behave in such a situation. Players prefer to take their time. They took a wait-and-see attitude. This is evidenced by low trading turnover and sluggish fluctuations in quotes. The market perked up somewhat yesterday after information from OPEC about reducing oil production quotas, but the enthusiasm, according to participants, disappeared quickly. Elena MYAZINA |
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