Rate Hike and Dell Weighs On Opening

123jump.com Staff
01 Nov, 2005
New York City

Markets in Asia generally closed higher and in Europe are trading higher. Most of the trading session in Tokyo was closed due to a computer glitch. The world''s second largest stock market by capitalization of $4.5 trillion suffered its last glitch in 1997. Markets in Europe are higher led by rising shares in the U.K. and Switzerland.

The world’s largest personal computer maker reported lower revenue and earnings at the lower end of the range in the preliminary third quarter results. The company guided earnings of 39 cents vs. previous guidance of 39 cent to 41 cents in August. Including one-time charges of 14 cents related to restructuring, job layoffs in Central Texas and Britain and a defective product related charges. Excluding charges the guided earnings were 25 cents.

Company forecasted revenue of $13.9 billion vs. previous guidance of $14.1 to $14.5 billion.

On Monday, after-the close shares fell as much as 5.5% but recovered to 4.2% loss. Dell’s shares have been on decline after crossing $42 in July of this year.

Investors are bracing for yet another rate hike from Federal Reserve Bank this afternoon. Market is expecting 25 basis points rise in short term interest rate. The 12th consecutive rise in interest rate is expected at 2:15 EST.

In the overnight trading in Asia stock averages in Japan rose close to 2%, in Korea rose 2.66%, in Thailand rose 1.56%, Hong Kong rose 1.29% and in Singapore rose 1.11%. A computer glitch forced a short time after opening forced Tokyo stock exchange to suspend trading in stocks and convertible bonds for the most of the session. The world’s second largest market, $4 trillion by market capitalization, suffered last delay in stock trading in 1997.

Markets in India and Singapore were close due to Deepavali holidays marking celebration in Hindu traditions.