Markets across Europe and in the US are expected to open nervously today, following another volatile week last week.
The Dow closed below its post-September 11th levels on Friday as continued pessimism about US business and further fallout from corporate scandals sparked further selling. Results from some big US companies, although mostly satisfactory, failed to prompt a rally.
The Dublin market held up well compared to London, New York and European markets. Nevertheless more than €500 million was wiped off the value of Dublin shares on Friday. The ISEQ ended down 1 per cent, compared to London, Paris and Frankfurt, which closed down between 4 per cent and 5 per cent.
The Dow fell heavily despite assurances on the US economy by President Bush and Federal reserve chairman Mr Alan Greenspan.
This week there will be another batch of US earnings reports to digest, covering about a third of Standard & Poor's top 500 US stocks, including Bristol-Myers Squibb and Wyeth on Tuesday, McDonald's and Halliburton on Wednesday, and Eastman Kodak and Viacom on Thursday.
US data on Thursday and Friday include orders for durable goods, new home sales and the Michigan survey of consumer sentiment.
Europe will be looking at the Ifo German business confidence figures on Thursday, which are expected to flatten off, given the state of the equity markets. The UK releases second-quarter GDP figures on Friday.
"The mood is just horrible. There is one crisis after another. Anything people can point to as a negative they are jumping all over it," said Mr Mike Driscoll, a US Bear Stearns managing director of listed trading. "Markets tend to go to extremes, and I am seeing a lot of good companies that are being completely annihilated without reason."
However, some observers did not rule out the possibility of a rally given the low levels to which the markets have fallen.
