By Steve Goldstein, MarketWatch
Dec 30, 2005
U.S. stock market futures pointed to another decline Friday to close out
trading in 2005, putting the Dow Jones Industrials Average in danger of its
first yearly loss since 2002.
With volumes extremely light, the outlook was still uncertain, but an
inverted Treasury yield curve -- when yields on longer-term maturities fall
below those of shorter-term maturities -- suggests the upside may be limited.
S&P 500 futures fell 2.40 points at 1,257.70 and Nasdaq 100 futures lost
3.0 points at 1,665.0.
Dow industrials futures slid 20 points to 10,800.
The U.S. futures drop coincided with a slide in European stock markets as
well. A closing out of positions, the recent strength in energy futures and
light volumes were cited by traders as reasons for the declines in markets on
both sides of the Atlantic.
On Thursday, another inversion of the Treasury yield curve and weak
housing sector data unnerved investors toward the end of the session, with the
Dow industrials losing 11 points at 10,784, just 1 point above where it closed
out 2004.
The Nasdaq Composite shed 11 points to 2,218 on Thursday, vs. a 2004
yearend price of 2,175, and the S&P 500 eased 3.8 points to 1,254, but up
about 42 points for the year.
At last look, the yield on the 10-year Treasury note was at 4.36%, below
the 2-year yield of 4.37%. The curve inverted on Tuesday for the first time in
nearly 6 years. Those events usually precede economic recessions.
The yield curve inverted in late-1999, and the Dow topped out in January
2000 and the Nasdaq and S&P 500 topped out in March 2000.
In commodities, front-month crude oil contracts dipped 52 cents at $59.80
a barrel in electronic trading, while gold futures slipped $1.30 at $516.20 an
ounce.
The dollar edged higher against the euro, recently up 0.4% at $1.1796.
Against the yen, the buck was down 0.1% at 117.73.
There were a handful of companies attracting attention on Friday. Google
Inc.: News, Quote is reportedly being sued by a New York based firm over the
patents it's alleged to use for Voice-over-IP technology in Google Talk. Rates
Technology Inc. is seeking $5 billion in damages, the report in The New York
Post said.
The stock shed $1.42 to $418.73 in Instinet.
Shares of Syneron Medical slumped $3.50, or 9.8%, to $32.19 in Instinet
after CIBC World Markets downgraded the medical device maker to sector
performer from sector outperformer, on the belief the company will have a
difficult time meeting fourth-quarter revenue forecasts. Analyst John
Calcagnini lowered his revenue forecast to $26 million from $31.5 million, vs.
the average analyst estimate compiled by Thomson First Call of $28.7 million.
Calcagnini also cut his earnings estimate to 50 cents a share from 58 cents.
Citigroup reportedly is leading a consortium offering $3 billion for a
stake in Chinese bank Guangdong.
Intel and AT&T will be in focus over the new ad campaigns the companies
are unleashing. The CEO of U.K. advertising giant WPP, however, said in an
interview that the U.S. advertising market could be "at risk of a shower" in
2006. Martin Sorrell famously stated he saw a bath-shaped recession in the
2002 advertising market. Intel's stock, a component of the Dow, inched 6-
cents lower to $25.01 in Instinet.
Automakers including DaimlerChrysler were among the decliners in Europe,
and the Nikkei 225 in Tokyo also ended lower on the day, but up 40% for the
year.
Fellow Dow component General Motors, which fell to a 23-year low in
intraday trading on Thursday before bouncing to close up 2.2%, was last down 4
cents at $18.97 in Instinet.
This MarketWatch news update is provided to you courtesy of Thomson
Financial.
This is Thomson Financial's Market Commentary, which is issued three times
daily; Pre-Open (9:00 a.m.), Post-Open (10:15 a.m.), and Close (5:00 p.m.).
The information herein is believed to be true and accurate. We take no
responsibility for inaccurate information and reserve the right to update our
reports. If you have any questions please e-mail James Sang at
james.sang@tfn.com or call 646.822.6233. For more information about Thomson
Financial visit us on-line at http://www.thomsonfinancial.com. For more
financial information at your fingertips, please visit
http://www.irchannel.com.
SOURCE Thomson Financial Corporate Group
back to top
