man gar nicht weiter weiß, bemüht man Legenden. Ist sicherlich nicht schlechter als Charttechnik oder andere Astrologie.
Sunday January 30, 2:27 pm Eastern Time
WALL ST WEEK AHEAD - Groundhog Day is D-day for rates
By Eric Wahlgren
NEW YORK, Jan 30 (Reuters) - The big question on Wall Street this week: Will inflation czar Federal Reserve Chairman Alan Greenspan see his shadow on Groundhog Day?
With a key meeting on interest rates ending on the day honoring the buck-toothed harbinger of winter's duration, stock investors may get an idea of just how long the chill will last in terms of borrowing-cost hikes.
A consensus has emerged among Wall Streeters that the central bank's rate-setting committee on Wednesday will opt only for a mellow quarter of a percentage point increase to cool the sizzling U.S. economy.
But stronger-than-expected wage inflation figures last Friday could lead the Fed to enact a beefier, 50-basis point hike, some analysts warn, meaning cold weather ahead for stocks.
``If the Fed did 50 basis points, this would be a signal that the economic situation would be spinning out of control and it would be very, very hard on the stock market,'' said Pierre Ellis, senior economist at Primark Decision Economics. ``Fifty basis points is dropping the big one.''
Higher interest rates are generally seen as bad for stocks as they can raise corporate borrowing costs and make bonds more competitive with equities as investments.
Others on Wall Street, however, believe the market could absorb the shock of a 50-basis point increase in one fell swoop.
``If the Fed raises rates by 25-basis points, it may give the market a little indigestion, but nothing more,'' said George Rodriguez, senior vice president of Guzman & Co. in Jersey City, N.J. ``If it is a 50-basis point increase, it will give the market heartburn, but it should recover rather quickly.''
But Wall Street is expecting further rate increases later in the year. A handful of 30 primary dealers polled by Reuters see the Fed taking the federal funds rate, which currently stands at 5.50 percent, as much as a full percentage point higher to 6.50 percent in 2000.
Despite a stream of mostly positive earnings from top U.S. companies, stocks were rocky last week as interest rate concerns came to the fore ahead of the big kahuna of a Fed meeting. A report last Friday that showed the fourth-quarter employment cost index rose by a stronger-than-expected 1.1 percent instead of the 0.9 percent anticipated triggered a broad sell-off.
The Dow Jones industrial average (^DJI - news) ended down about 511 points for the week at 10,738.87, putting it more than 8 percent off its closing high of 11,722.98 on Jan. 14. The broader Standard and Poor's 500 index (^SPX - news) closed down 80 points for the week at 1,360.16.
The technology-rich Nasdaq composite index (^IXIC - news), meanwhile, ended down about 347 points for the week at 3,887.07, placing it also more than 8 percent off its closing high of 4,235.40 of Jan. 21.
By Thursday of last week, 66 percent of the 291 companies in the 500-strong S&P index that have reported so far had topped Wall Street's expectations.
But warnings about the future from Nasdaq stars such as a Dell Computer Corp. (NasdaqNM:DELL - news) and Qualcomm Inc. (NasdaqNM:QCOM - news) have cast some doubt on the sky-high valuations of technology companies.
Skepticism will persist this week, analysts said, when the spotlight will train on Internet retailer Amazon.com Inc. (NasdaqNM:AMZN - news).
The cyber shopping mall slipped 5-4/16 to 61-11/16 last Friday after announcing it had cut 150 people, or about 2 percent of its total workforce of 7,500.
``They are really kind of a bellwether for the Internet retailing sector,'' said Peggy Farley, president and chief executive officer of Ascent/Meredith Ascent Management Inc. ``If they do well, the market will obviously receive that well.''
By the end of the week, attention will turn to the January jobs report which will be picked apart for further clues on whether inflation is on the rise.
``If it is a weak employment report, it would calm people down considerably,'' Ellis said.
As for Groundhog Day, it is a Feb. 2 ceremony that goes back more than a century in Punxsutawney, Penn. Legend has it that if a local groundhog sees his shadow after coming out of a burrow in, he will be so spooked that he will scoot back underground, meaning six more weeks of cold.
On the other hand if he sees no shadow, he is likely to hop out of his hole, meaning spring is just around the corner.
The early 1990s ``Groundhog Day'' movie -- starring Bill Murray as a TV weatherman who goes to Punxsutawney and finds time has stopped and every day is Groundhog Day -- has added to the fame of Punxsutawney, 90 miles (140 km) north of Pittsburgh.
Sunday January 30, 2:27 pm Eastern Time
WALL ST WEEK AHEAD - Groundhog Day is D-day for rates
By Eric Wahlgren
NEW YORK, Jan 30 (Reuters) - The big question on Wall Street this week: Will inflation czar Federal Reserve Chairman Alan Greenspan see his shadow on Groundhog Day?
With a key meeting on interest rates ending on the day honoring the buck-toothed harbinger of winter's duration, stock investors may get an idea of just how long the chill will last in terms of borrowing-cost hikes.
A consensus has emerged among Wall Streeters that the central bank's rate-setting committee on Wednesday will opt only for a mellow quarter of a percentage point increase to cool the sizzling U.S. economy.
But stronger-than-expected wage inflation figures last Friday could lead the Fed to enact a beefier, 50-basis point hike, some analysts warn, meaning cold weather ahead for stocks.
``If the Fed did 50 basis points, this would be a signal that the economic situation would be spinning out of control and it would be very, very hard on the stock market,'' said Pierre Ellis, senior economist at Primark Decision Economics. ``Fifty basis points is dropping the big one.''
Higher interest rates are generally seen as bad for stocks as they can raise corporate borrowing costs and make bonds more competitive with equities as investments.
Others on Wall Street, however, believe the market could absorb the shock of a 50-basis point increase in one fell swoop.
``If the Fed raises rates by 25-basis points, it may give the market a little indigestion, but nothing more,'' said George Rodriguez, senior vice president of Guzman & Co. in Jersey City, N.J. ``If it is a 50-basis point increase, it will give the market heartburn, but it should recover rather quickly.''
But Wall Street is expecting further rate increases later in the year. A handful of 30 primary dealers polled by Reuters see the Fed taking the federal funds rate, which currently stands at 5.50 percent, as much as a full percentage point higher to 6.50 percent in 2000.
Despite a stream of mostly positive earnings from top U.S. companies, stocks were rocky last week as interest rate concerns came to the fore ahead of the big kahuna of a Fed meeting. A report last Friday that showed the fourth-quarter employment cost index rose by a stronger-than-expected 1.1 percent instead of the 0.9 percent anticipated triggered a broad sell-off.
The Dow Jones industrial average (^DJI - news) ended down about 511 points for the week at 10,738.87, putting it more than 8 percent off its closing high of 11,722.98 on Jan. 14. The broader Standard and Poor's 500 index (^SPX - news) closed down 80 points for the week at 1,360.16.
The technology-rich Nasdaq composite index (^IXIC - news), meanwhile, ended down about 347 points for the week at 3,887.07, placing it also more than 8 percent off its closing high of 4,235.40 of Jan. 21.
By Thursday of last week, 66 percent of the 291 companies in the 500-strong S&P index that have reported so far had topped Wall Street's expectations.
But warnings about the future from Nasdaq stars such as a Dell Computer Corp. (NasdaqNM:DELL - news) and Qualcomm Inc. (NasdaqNM:QCOM - news) have cast some doubt on the sky-high valuations of technology companies.
Skepticism will persist this week, analysts said, when the spotlight will train on Internet retailer Amazon.com Inc. (NasdaqNM:AMZN - news).
The cyber shopping mall slipped 5-4/16 to 61-11/16 last Friday after announcing it had cut 150 people, or about 2 percent of its total workforce of 7,500.
``They are really kind of a bellwether for the Internet retailing sector,'' said Peggy Farley, president and chief executive officer of Ascent/Meredith Ascent Management Inc. ``If they do well, the market will obviously receive that well.''
By the end of the week, attention will turn to the January jobs report which will be picked apart for further clues on whether inflation is on the rise.
``If it is a weak employment report, it would calm people down considerably,'' Ellis said.
As for Groundhog Day, it is a Feb. 2 ceremony that goes back more than a century in Punxsutawney, Penn. Legend has it that if a local groundhog sees his shadow after coming out of a burrow in, he will be so spooked that he will scoot back underground, meaning six more weeks of cold.
On the other hand if he sees no shadow, he is likely to hop out of his hole, meaning spring is just around the corner.
The early 1990s ``Groundhog Day'' movie -- starring Bill Murray as a TV weatherman who goes to Punxsutawney and finds time has stopped and every day is Groundhog Day -- has added to the fame of Punxsutawney, 90 miles (140 km) north of Pittsburgh.
