Posted on 06/28/2002 5:35:02 AM PDT by Cagey
NEW YORK (Reuters) - Stocks are expected to open flat to lower at Friday's open, buffeted by the latest in string of Wall Street accounting scandals after office equipment company Xerox Corp. (XRX) said it expects to restate revenues by about $2 billion over a five-year period.
The announcement jangled nerves still raw from WorldCom Inc.'s (WCOME) disclosure earlier this week that it inappropriately booked nearly $4 billion, inflating its results.
Readjustments to corporate results are always unnerving to investors, said James Park, senior vice president of equity trading at investment firm Brean Murray & Co.
But he added: "The market's kind of washed out a lot of the negativity ... If you keep getting punched you just don't feel it as much after a while."
Wall Street managed to shake off its accounting blues late in the session on Thursday, despite a swirl of rumors that shook up the market, as investors focused on a government report showing the economy grew faster than previously thought in the first quarter.
Stock futures were pointing to a moderately weaker open. Standard & Poor's 500 stock index futures for September were down 2 points at 990, and Nasdaq 100 futures for the same month were off 9 points at 1,050.
Xerox' shares fell to $5.75 in pre-open trading from $8 at its close on Thursday. The company said it would restate $2 billion in revenues for the five-year period of 1997 through 2001.
That follows $3 billion improperly accounted for revenues in the four years from 1997 through 2000, that were estimated by the Securities and Exchange Commission in April when it settled a previous fraud case with Xerox.
The market could get some early direction from a fresh batch of economic data, including reports on personal income and spending, manufacturing in the Chicago region and consumer sentiment.
The government's May report on income and consumption, due at 8:30 a.m., is expected to show a rise of 0.3 percent in income and a 0.1 percent drop in spending, according to a recent Reuters poll.
The resilience of consumer spending, which powers two-thirds of U.S. economic growth, is considered a key factor in the economy's rebound.
Another gauge of the consumer is the University of Michigan's consumer sentiment index, expected at 9:45 a.m. The final reading on June sentiment is expected to show a drop to 90.8 from 96.9 in the prior month, the Reuters survey showed.
At 10 a.m., the National Association of Purchasing Management-Chicago will release its monthly index of local manufacturing activity. Economists polled by Reuters see the index slipping to 58.9 in June form 60.8 a month earlier.
The slew of scandals is particularly unnerving to foreign investors, analysts say, given the double whammy of tumbling stock prices and the rapid decline of the U.S. dollar.
The dollar came within a quarter cent of parity with the euro in London trading and sank to a nine-month low against the Japanese yen in what signaled to some a growing lack of faith in U.S. assets, and particularly equities.
In overseas trading, Tokyo stocks rose on Friday, with blue chips such as Toyota Motor Corp (7203) rebounding after gains on Wall Street, but the Nikkei average still chalked up its worst month in over two years.
The benchmark Nikkei (N225) put on 3.51 percent or 360.24 points to 10,621.84, extending a 1.86 percent climb the day before. But for all of June, the Nikkei fell 9.7 percent, its worst performance since it fell 11.6 percent in April 2000.
European equities looked set to end a difficult quarter on a positive note, led by British insurers Prudential (PRU) and CGNU (CGNU) after UK regulators eased stress tests to stem forced sales of shares.
The FTSE Eurotop 300 (FTEU3) index of pan-European blue chips was up 1.5 percent.
U.S. stocks raced to their biggest gains in almost two weeks on Thursday, as jitters over the WorldCom accounting scandal were soothed by a government report that the U.S. economy grew faster than previously thought.
The Dow Jones industrial average (DJI) jumped 149.81 points, or 1.64 percent, to 9,269.92, according to the latest available data. The broader Standard & Poor's 500 Index (SPX) was up 17.11 points, or 1.76 percent, at 990.64. The technology-laced Nasdaq Composite Index (IXIC) rose 29.89 points, or 2.09 percent, to 1,459.22.<
Yea, right.
I think you're right. Clinton always thought short term and didn't care about next year until it got here and would do anything to make today look good on paper.
Well in the long run we are all dead, the short term is all that really matters, and Clinton didn't invent the idea, he only employed it, BTW look where it got him.
I am no Clinton, but today is all anyone really has, I sure don't spend too much time worrying about tomorrow as there is enough to do today.
That may be fine for you in your personal life, but I'm talking about corporations. There has to be both short term and long term planning for a company (and a country, I might add) to prosper. Short term planning without regard for the future is usually disastrous .
DJIA up 67.42 at 0923 CDT.
Where's the slide, Reuters? Huh?
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