By James Langton
(October 13 – 09:00 EST) – A deeply negative tone has returned to the market today. After yesterday’s big drop on Wall Street, markets were down in Asia and Europe. S&P futures are pointing to another down open this morning.
There is no economic news today to reverse the down trend. Yesterday, the TSE managed to withstand the Dow’s fall, thanks to strong gold and oil, but with that negative tone deepening it’s not clear that the TSE will be able to sustain that resistance. Most traders are focused on the U.S. Producer Price Index, due on Friday, which will give markets some indication on interest rates.
In early morning European trading the tone is negative. The FTSE 100 is down about 62 points in London. The CAC 40 has slipped 50 points in Paris, and the German DAX is down 85 points so far. The German software giant SAP warned about its earnings today.
There was some encouraging news in the overnight currency market, after the Bank of Japan announced that it would begin buying T-bills and other short term paper to add liquidity to the money market, although it will not be changing its monetary policy formally. The Yen slipped against the U.S. dollar on the news, and the bond market received a boost from it too. The Nikkei fell almost 2%, closing down 336 points. The Hang Seng folowed suit, off 283 points.
In merger news, utility giant Consolidated Edison Co. of New York is buying Northeast Utilities for US$7.5 billion in stock, cash and assumed debt.
Toronto’s Bid.Com International Inc. is warning about much lower than expected revenues for its third quarter, which ended Sept. 30. It now expects revenue to come in at between $8.25 million and $8.5 million – below its earlier expectation of $12 million.