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TomB · 26 juni 2003, 06:21

Het is ervan gekomen (yay!)

Laat ze maar inflatie creeren. Hoe meer hoe liever lol.

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NEW YORK (Reuters) - Stocks closed lower on Wednesday as investors were rattled by the Federal Reserve's warning of possible earnings-roiling deflation and disappointed that it cut interest rates by only a quarter point.

After the rate-setting Federal Open Market Committee trimmed the bellwether federal funds rate to 1 percent, a low not seen since 1958, the Fed announced it was ready to cut the cost of borrowing even more if the risk of falling prices worsened, which some analysts said spooked some investors.

"Until we see margins increase and pricing power return ... I wouldn't be surprised if the market continued to sell off," said Diane Garnick, chief U.S. strategist at Dresdner Kleinwort Wasserstein. Fed chief Alan Greenspan had "told us explicitly not to worry about deflation but that's the number one concern that they're talking about today," she said.

The Dow Jones industrial average (DJI) fell 98.32 points, or 1.08 percent, to 9,011.53. The Standard & Poor's 500 Index (SPX) lost 8.13 points, or 0.83 percent, to 975.32, and the tech-laced Nasdaq Composite Index (IXIC) lost 2.95 points, or 0.18 percent, at 1,602.66.

Volume was active with 1.44 billion shares traded on the New York Stock Exchange and 1.56 billion on Nasdaq. Gainers beat decliners by narrow margins on both markets.

Earlier, stock indexes clung to gains as investors nibbled at technology stocks bruised in recent sessions. The Nasdaq was positive for most of the session, rising as much as 1.50 percent.

MODESTY PREVAILS

The Fed was widely expected to slash rates when it wrapped up its two-day meeting but the size of the cut, half a point or a more modest quarter point, had been debated by market watchers -- and a slim majority had leaned toward the more aggressive easing.

The U.S. economy has yet to exhibit sustainable growth, the Fed said in its statement, leading some to wonder why it opted for the more modest easing. It was the 13th rate cut since early 2001.

"To do 25 when they could have taken out 50 and to say their concerns are still with the downside risks on inflation -- it doesn't seem they've taken out all the insurance they could have," said James Glassman, economist at J.P. Morgan Securities.

Nextel Communications Inc. (NXTL), which was among the stocks listed as Lehman Brothers' "10 Uncommon Values," rose 41 cents to $16.95, or 2.48 percent.

Another bright spot was Freddie Mac (FRE). The No. 2 U.S. mortgage finance company rose 80 cents, or 1.6 percent, to $50.83 after it said it expects to restate earnings for 2000, 2001 and 2002 upward by as much $4.5 billion. Investors welcomed the clearer picture of the size of the restatement and management's move to fix the accounting mess.

Goldman Sachs Group. (GS) reported earnings rose by 23 percent. But its shares, which are up about 26 percent this year, fell $1.82 to $84.78, or 2.1 percent.

Carnival Corp. (CCL) (CCL) fell $1.01, or 3.16 percent, to $31. The top cruise group reported a smaller profit and said earnings for the rest of the year would be lower than expected.

After the close, Manugistics Group Inc. (MANU) said its net loss narrowed from a year ago, as the business software maker booked lower sales. Shares fell to $4.60 on the Instinet electronic system from a close at $5.20 on Nasdaq.

MIXED DATA

Wall Street got a mixed bag of economic news.

The government said sales of single-family homes rose 12.5 percent in May and realtors reported sales of existing homes rose 1.2 percent that month.

But the government also said orders for durable goods -- big-ticket items like cars -- slipped 0.3 percent in May. Economists had expected a 0.8 percent rise.

Paul Cherney of S&P MarketScope said the Fed move was what the market wanted. The real problem markets face is that companies don't want to take advantage of the lower rates to spend more and create jobs in an uncertain economy, he added.

"What the market will look for now is signs of earnings improvement in the July earnings season," Cherney said.

26 juni 2003, 06:21	#4
TomB Perm. Vertegenwoordiger VN Geregistreerd: 6 januari 2003 Locatie: US Berichten: 14.572	Het is ervan gekomen (yay!) Laat ze maar inflatie creeren. Hoe meer hoe liever lol. ---- NEW YORK (Reuters) - Stocks closed lower on Wednesday as investors were rattled by the Federal Reserve's warning of possible earnings-roiling deflation and disappointed that it cut interest rates by only a quarter point. After the rate-setting Federal Open Market Committee trimmed the bellwether federal funds rate to 1 percent, a low not seen since 1958, the Fed announced it was ready to cut the cost of borrowing even more if the risk of falling prices worsened, which some analysts said spooked some investors. "Until we see margins increase and pricing power return ... I wouldn't be surprised if the market continued to sell off," said Diane Garnick, chief U.S. strategist at Dresdner Kleinwort Wasserstein. Fed chief Alan Greenspan had "told us explicitly not to worry about deflation but that's the number one concern that they're talking about today," she said. The Dow Jones industrial average (DJI) fell 98.32 points, or 1.08 percent, to 9,011.53. The Standard & Poor's 500 Index (SPX) lost 8.13 points, or 0.83 percent, to 975.32, and the tech-laced Nasdaq Composite Index (IXIC) lost 2.95 points, or 0.18 percent, at 1,602.66. Volume was active with 1.44 billion shares traded on the New York Stock Exchange and 1.56 billion on Nasdaq. Gainers beat decliners by narrow margins on both markets. Earlier, stock indexes clung to gains as investors nibbled at technology stocks bruised in recent sessions. The Nasdaq was positive for most of the session, rising as much as 1.50 percent. MODESTY PREVAILS The Fed was widely expected to slash rates when it wrapped up its two-day meeting but the size of the cut, half a point or a more modest quarter point, had been debated by market watchers -- and a slim majority had leaned toward the more aggressive easing. The U.S. economy has yet to exhibit sustainable growth, the Fed said in its statement, leading some to wonder why it opted for the more modest easing. It was the 13th rate cut since early 2001. "To do 25 when they could have taken out 50 and to say their concerns are still with the downside risks on inflation -- it doesn't seem they've taken out all the insurance they could have," said James Glassman, economist at J.P. Morgan Securities. Nextel Communications Inc. (NXTL), which was among the stocks listed as Lehman Brothers' "10 Uncommon Values," rose 41 cents to $16.95, or 2.48 percent. Another bright spot was Freddie Mac (FRE). The No. 2 U.S. mortgage finance company rose 80 cents, or 1.6 percent, to $50.83 after it said it expects to restate earnings for 2000, 2001 and 2002 upward by as much $4.5 billion. Investors welcomed the clearer picture of the size of the restatement and management's move to fix the accounting mess. Goldman Sachs Group. (GS) reported earnings rose by 23 percent. But its shares, which are up about 26 percent this year, fell $1.82 to $84.78, or 2.1 percent. Carnival Corp. (CCL) (CCL) fell $1.01, or 3.16 percent, to $31. The top cruise group reported a smaller profit and said earnings for the rest of the year would be lower than expected. After the close, Manugistics Group Inc. (MANU) said its net loss narrowed from a year ago, as the business software maker booked lower sales. Shares fell to $4.60 on the Instinet electronic system from a close at $5.20 on Nasdaq. MIXED DATA Wall Street got a mixed bag of economic news. The government said sales of single-family homes rose 12.5 percent in May and realtors reported sales of existing homes rose 1.2 percent that month. But the government also said orders for durable goods -- big-ticket items like cars -- slipped 0.3 percent in May. Economists had expected a 0.8 percent rise. Paul Cherney of S&P MarketScope said the Fed move was what the market wanted. The real problem markets face is that companies don't want to take advantage of the lower rates to spend more and create jobs in an uncertain economy, he added. "What the market will look for now is signs of earnings improvement in the July earnings season," Cherney said. __________________ In het begin was er niets, wat ontplofte.