Wall St shares expected to open flat

Share prices are expected to open flat, as investors digest the latest batch of fourth-quarter corporate earnings and wait for the Federal Open Market Committee decision on interest rates tomorrow, dealers said.

Share prices are expected to open flat, as investors digest the latest batch of fourth-quarter corporate earnings and wait for the Federal Open Market Committee decision on interest rates tomorrow, dealers said.

At 8.55 am, the DJIA March futures contract was up 13.00 points at 9,880.00, the S&P 500 March futures contract was up 0.20 at 1,135.70. The Nasdaq 100 March futures contract was up 6.50 points at 1,579.00.

The market is expected to open on a cautious note, following news yesterday of Global Crossing's filing for bankruptcy protection, the latest corporate failure after energy group Enron and retailer Kmart, dealers said.

Global Crossing's news added to the nervousness after recent high-profile bankruptcies, particularly that of Enron, whose accounting and auditing problems continue to generate headlines.

Volume is expected to remain light ahead of the FOMC meeting, which kicks off today, with a decision on interest rates expected on Wednesday.

The FOMC is widely expected to hold interest rates steady at 1.75%, and signal a winding down of its easing stance.

On the economic front, investors are digesting a stronger-than-expected rise in orders for durable goods, which rose 2.0% in December from the previous month. Wall Street economists had expected durable goods orders to increase 1.1% in December.

Market players are now waiting for the US conference board January survey of consumer confidence, scheduled for release at 10.00 am. Economists said that consumer confidence is expected to rise to 95.7 in January after rising to 93.7 in December, which was the first increase since June.

Coca-Cola is expected to be in focus after the company said it expects adverse currency factors, including the recent devaluation in Argentina, to cut 2002 earnings by 8-10 cents after reporting in-line fourth-quarter results.

The company earlier reported fourth-quarter net income of $914m, or 37 cents, up from $242m, or 10 cents, a year earlier, due to improved worldwide business volume and several non-recurring items last year.

Qwest Communications is expected to open lower after it said had a pro forma normalised loss per diluted share of 7 cents in the fourth quarter, compared with earnings per share of 16 cents the year earlier, as growth in wireless, DSL and internet services continued to be offset by weakness in local and traditional data services.

Honeywell is also expected to be active after the company said fourth-quarter net earnings fell to $118m from $254m a year earlier as it took a $329m charge to cover a legal settlement with Northrop Grumman Corp and the cancellation of a jet contract by BAE Systems PLC.

Net earnings from ongoing operations stood at $447m, or 55 cents a share, against $569m, or 70 cents a share a year ago.

Elsewhere, Merck & Co is seen in focus after the company said it plans to establish Merck-Medco, its pharmacy benefits management unit, as a separate, publicly traded company, with a planned initial public offering of a portion of the new company by mid-2002.

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