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Traders try to calm nerves
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May 22, 1998: 8:30 a.m. ET
Markets are jittery ahead of long weekend, but Globex points to gains
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NEW YORK (CNNfn) - Nervous traders seemed poised to recover their composure Friday, a day after pushing stocks down on confirmation that the Federal Reserve Board is leaning towards tightening interest rates in the future.
While concerns remained that some companies, especially in the high-tech sector, may have trouble meeting earnings expectations, the early trading mood was buoyant ahead of the holiday weekend.
Prices of S&P 500 futures contracts on the Globex system were up 2.30 points at 1120.50, pointing to nearly 20-point opening rise in the Dow.
The 30-year benchmark Treasury bond was up 7/32 in price, pulling the yield back to 5.90 percent and reversing Thursday's midday price plunge after the Fed released minutes of its March meeting on interest rates.
(See the latest S&P 500 figures on Globex)
Whether a Dow resurgence materializes Friday may hinge on several developments in the airline and high-tech sectors.
Antitrust regulators are urging the U.S. Transportation Department to press for major changes in a proposed alliance between AMR Corp.'s American Airlines and British Airways. The Justice Department says it can't bless the collaboration without some concessions.
BA sought to defend the alliance Friday, asserting that the objections are "just another step along the regulatory road," and that Justice officials had underestimated the possible benefits from an alliance. Shares of BA (BAB) slid 1.5 percent in pre-open trade Friday; AMR (AMR) stock eased 5/8 to 146-11/16.
In Washington, Microsoft Corp. was set to appear in Federal court Friday to ask a Federal Judge to block a government request for a preliminary injunction in its sweeping antitrust suit. Microsoft says it needs 7 months to prepare a response.
Shares of the Redmond, Wash.-based software colossus (MSFT) ended up 5/8 Thursday at 86-3/8.
The Nasdaq index also will struggle Friday to regain its footing after two days of declines.
The financial sector got an early-morning jolt Friday from rumors that Deutsche Bank was in merger talks with Chase Manhattan Corp.
A Deutsche spokesperson later denied the reports, saying the bank doesn't comment on rumors or speculation. Chase shares closed down 7/16 at 143-3/4 in composite trading Thursday on the New York Stock Exchange.
Coca-Cola Co. reportedly is set to pay $4 million a year to become the official soft-drink sponsor of the National Football League. Shares of Coke (KO) closed down 3/8 Thursday at 79-7/16.
In Asia, Pacific Rim markets fizzled Friday as investors failed to parlay enthusiasm over Suharto's resignation in Indonesia into a rally. European bourses were mostly quiet ahead of a long weekend.
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