A refreshing pause?

A refreshing pause?

RTGAM

Global stock market indexes struck a cautious note on Tuesday morning after a strong rally on Monday sent major indexes to multi-month highs over enthusiasm for an economic rebound.


U.S. stock index futures were down with about an hour before markets open, suggesting that stocks will dip slightly at the start of trading. Futures for the Dow Jones industrial average were down 22 points. Futures for the broader S&P 500 were down 4 points - threatening to put it back below the 900 threshold and perhaps back into negative territory for the year, one day after poking into the black for the first time since January.


In Europe, the U.K.'s FTSE 100 was up 2.5 per cent in afternoon trading, after the stock market there was closed on Monday. Germany's DAX index fell 0.5 per cent. In Asia, Japan's stock market was closed, but Hong Kong's Hang Seng index rose 0.3 per cent in overnight trading.


Corporate news was mixed. Financial firm UBS AG announced a $1.8-billion (U.S.) quarterly loss and maintained a cautious outlook due to a worsening economy. However, Kraft Foods Inc.'s first quarter earnings jumped 10 per cent.


Bloomberg News is reporting that the U.S. government's stress tests on financial firms is likely to conclude that 10 of the 19 firms in the study will need additional capital to keep them safe from a deeper-than-expected recession. Results are due to be released officially on Thursday.


In the meantime, investors will be anticipating Ben Bernanke's testimony before the Joint Economic Committee, where the Federal Reserve chairman will discuss recent attempts to get banks lending again and efforts to stimulate the economy - pertinent stuff, with the stock market anticipating an economic recovery.


In Canada, Loblaw Cos. Ltd. reported a 73 per cent jump in its first quarter earnings. Adjusted earnings, which ignore one-time factors, were 47 cents a share, well above the 35 cents a share than analysts had been expecting.

Copyright 2001 The Globe and Mail