MARKET PREVIEW: Techs may see red after Greenspan comments

Jan. 2, 2002 4:43 p.m. PT

2 min read

The interest rate oracle has spoken, and techs see red in their future. After a rough week, Fed chief Alan Greenspan has hit stocks with another inflation warning. Asian and European markets took a tumble, and the Dow is set to open lower.

U.S.

U.S. stocks are expected to take a sharp fall Friday after Federal Reserve Chairman Alan Greenspan advised banks to set aside more money as insurance against a big stock market downturn.

"History tells us that sharp reversals in confidence occur abruptly, most often with little advance notice," the inflation oracle said Thursday. While emphasizing he was not predicting a stocks crash, Greenspan told a banking conference that sudden losses in investors' confidence "inevitably" occur from time to time. The remarks are taken as a sign he is worried about a potential bubble in equity prices.

A few potentially unlucky IPOs will brave Friday's stormy markets; Women.com (Nasdaq: WOMN), EPCOS AG (NYSE: EPC), and Cysive (Nasdaq: CYSV) have priced for debut.

Expect the following technology stocks to be among Friday's most actively traded issues: Broadcom Corp. (Nasdaq: BRCM), Iomega Corp. (NYSE: IOM), Rambus Inc. (Nasdaq: RMBS), Sun Microsystems Inc. (Nasdaq: SUNW) and theglobe.com Inc. (Nasdaq: TGLO).

U.S. stocks went on a wild ride Thursday as the Dow Jones industrial average fell 99 points in early trading only to rally up more than 100 points for a short time. In the end, it closed up 54 points while the Nasdaq inched up 6 points to 2,806.84.

At the Bell

The Dow Jones industrial average may open 83 points lower. The Standard & Poor's 500 index for June futures contracts was down 10.3 points to 1280 at 7:51 a.m. EST in 24-hour electronic trading.

The Inter@ctive Week @Net Index was up 3 to 335.18.

Asia

Asian markets were seeing red. The Nikkei 225 fell 1.00 percent to 17,602, Singapore's Strait Times index gained 2.43 percent to 2,061 and Hong Kong's Hang Seng fell 1.50 percent to 12,299.

Europe

European markets were also getting hammered after Greenspan's warnings. London's FTSE 100 dropped 2.24 percent to 5,904. The CAC 40 in Paris slipped 0.87 percent to 4,544 and the Xetra DAX in Frankfurt tumbled 1.49 percent to 5,143 at 7:10 a.m. EST.

Reuters contributed to this report.