North American stocks point up

North American stocks point up

RTGAM

After the dramatic sell-off on Tuesday, North American investors appear to be ready to creep back in to the stock market, if futures activity is any indication. S&P 500 futures indicated a 4.4-point rise on Wednesday, to about 1348. Dow Jones industrial average futures indicated a 27-point rise, to about 12,347.


Good results from Walt Disney Co., which beat analyst expectations, could explain part of the rise. The shares rose in Germany. But investors may be ready to buy stocks that are deemed to be cheap following the widespread decline in North American stocks on Tuesday that left few sectors untouched.


In European trading in the afternoon, stocks were a mixed bad. The U.K.'s FTSE 100 was down 0.3 per cent and Germany's DAX index was up 0.4 per cent. However, investors will have to weigh overnight selling in Asia, with the Nikkei 225 plummeted 4.7 per cent, its worst one-day decline since January 22.


"The chitchat from Tokyo-side is that investors are scared about Japan's economy, they are scared about the U.S. economic slowdown - which should pinch profits at Japan's exporters of consumer goods and vehicles - and they are scared in general," said Carl Weinberg, chief economist at High Frequency Economics, in a note to clients. "What scares us - and what we believe makes the Nikkei's situation even worse than it needs to be - is that the huge overhang of foreign investor positions, that has supported this stock market over the last four years, could liquidate in a heartbeat."


In Canada, investors are likely to follow the U.S. lead but will also have an eye on a number of important earnings releases, including quarterly reports from BCE Inc., Cameco Corp. and Saputo Inc.

Copyright 2001 The Globe and Mail