WORLD MARKETS TODAY A Global Sea of Red

By Jack Crooks Wed Oct11, 2000 9:4 AM ET

"I never get impatient when I feel I am right." --Larry Livermore, Reminiscences of a Stock Operator

Futures Prices, 8:50 a.m. ET:

S&P 500, -2.00 (1389.00) Nasdaq 100, -42.50 (3117.50) U.S. Bonds, +3/32 (98 08/32) Oil, +0.50 (33.68) $ Index, -0.0013 (1.1423) International Market and News Summary:

Tech stocks were sharply lower throughout the globe. Some analysts think European telecoms are looking cheap. Crude oil is higher. The dollar is lower. Wheat prices soared yesterday. Stocks fell sharply across the major global markets this morning, driven by the same key concerns of lower earnings, higher crude oil prices and a plunging Nasdaq.

The dollar is showing some signs of weakness, as some believe it is an indication that European and Asian investors are pulling their money out of U.S. stocks. We think it's too early to tell.

Another surprise on the low level of heating oil inventories is once again leading to higher prices throughout the energy complex.

European stocks fell, led by phone-equipment and technology companies. Oil-related stocks were higher.

"The profit forecasts set for these technology companies earlier this year were too high, and now we're paying the price," Lodewijk van der Kroft, who helps manage about 6.5 billion guilders ($2.6 billion) at Theodoor Gilissen Bankiers in Amsterdam, told Bloomberg. "It's going to be a long time before these companies find their way back."

The Dow Jones Stoxx 50 Index fell 92.73 points, or 2.0 percent, to 4671.88, declining for a third day in four and leaving it down 3.8 percent so far this week. The 600-member Dow Jones Stoxx Index's technology group slid 6.4 percent, for a loss this week of 11 percent.

The Stoxx energy group rose 2.1 percent, and the health and food-and-beverage groups climbed about 0.5 percent, the only advances among the 18 industry groups.

Earlier in the session, the Stoxx 50 hit its lowest intraday price since May 24 at 4690.63. In Tokyo today, the Nikkei 225 stock average fell 2.0 percent to 15,513.57, its lowest close since March 1999.

Benchmark indexes retreated by more than one percent in Europe's eight biggest stock markets, five shedding more than two percent. Five shares declined for every one that advanced in the Stoxx index, which fell 7.44 points, or 2.0 percent, to 365.86, Bloomberg reported.

Japanese stocks fell to their lowest level in 19 month as investors dumped technology and electronics shares, The Wall Street Journal reported.

The Nikkei 225 average dropped 314.15, or 2.0 percent, to 15513.57, while the Topix Index of all Tokyo Stock Exchange First Section issues shed 22.82 to 1459.75. Decliners led advancers, 895 to 366, with 149 issues unchanged. Volume on the first section totaled 500.54 million shares.

Hong Kong shares finished lower, led by stocks in the technology and banking sectors, which were hurt by mounting concerns that oil prices will rise further as tensions flare in the Middle East, The Wall Street Journal said.

The Hang Seng Index ended down 427.11, or 2.8 percent, to 15127.00. Decliners led advancers, 28 to four, with one issue unchanged. Volume was valued at 8.1 billion Hong Kong dollars.

Australian shares closed lower, dragged down by sharp losses in the country's largest phone company, Telstra, The Wall Street Journal reported.

The All Ordinaries Index fell 3.8 to 3213.1. Decliners led advancers, 557 to 415. Volume totaled 441.3 million shares valued at 1.3 billion Australian dollars.

Key Global News & Views:

"It looks terrible out there," said Peter Cardillo, director of research at Westfalia Investments. "The market is skeptical of anything and everything. It's quite obvious that we are in a very bearish mode here, and it's going to take a real capitulation before things turn around." (Reuters)

Massive falls in the value of Europe's telecoms equipment makers, spurred by tales of gloom and doom from the United States, could prove a superb buying opportunity into a seriously underrated sector. (Reuters)

Crude oil rose two percent to near $33 a barrel in London after U.S. inventories of heating oil fell unexpectedly, renewing concern about a winter fuel shortage. (Bloomberg)

"When you have the appearance of being on the brink of war people are going to make sure that people have oil on hand, and you get a run-up in prices," said Gary Ross, chief executive of PIRA Energy Group in New York. "We have no shock absorbers right now. And as soon as some potential threat to supply appears, people have to run for cover." (The Wall Street Journal)

The dollar fell to a four-day low against the euro on concern declining U.S. equities may prompt European investors to withdraw funds. (Bloomberg)

German industrial production increased for a second straight month in August. (Bloomberg)

Wheat prices soared to a two-month high at the Chicago Board of Trade, bolstered mostly by mounting worries that the 2000-2001 U.S. winter-wheat crop may be in jeopardy. (The Wall Street Journal)

http://www.financialweb.com/edtarticle.asp?ArticleID=3803

-- Martin Thompson (mthom1927@aol.com), October 11, 2000