Stocks Set to Slip as Dollar Weakens

May 19, 2003
By Denise Duclaux

NEW YORK (Reuters) - Stocks are set to fall at Monday's open after the dollar sank to multiyear lows against major currencies, putting the brakes on a stocks

rally that drove the S&P 500 and Nasdaq to a five-week string of gains  
"The big thing right now is that the dollar is slipping against the major currencies," said Burton Schlichter, senior market analyst at Lind-Waldock & Co., a division of Refco LLC.

The dollar fell after U.S. Treasury Secretary John Snow on Saturday cemented views that Washington backed a weaker dollar. Analysts took Snow's statement to mean no concerted policy effort would be launched to stop the dollar's fall.

"A weak dollar is fine for our exporters, but it's awful for Wall Street because if you are a foreigner you are not going to want to invest in dollar-denominated investments," said Arthur Hogan, chief market analyst at Jefferies & Co.

Equity futures pointed to a lower start. Standard & Poor's 500 stock index futures for June fell 6 points to 938.30, while Nasdaq futures for the same month lost 8.50 points to 1,148. Dow Jones Industrial futures fell 63 points at 8,612.

A deadly attack over the weekend added pressure to the market. Suicide bombings in Morocco's biggest city, Casablanca, killed 41 people, and President Bush issued a fresh warning that al Qaeda remains a threat.

The calendar of economic data this week is fairly light, beginning with the Conference Board's index of leading economicindicators on Monday, due at 10:00 a.m. (1400 GMT) The index is expected to be up 0.1 percent for April after a 0.2 percent slip in March.

In corporate news, a federal probe into drugmakerBristol-Myers Squibb's financial statements is deeper than the company has revealed, The New York Times said on Sunday, citing people involved in the investigation. A Bristol-Myers spokeswoman contacted by Reuters declined to comment. Bristol-Myers ended at $25.82.

Genentech Inc.'s Avastin drug improved the survival of colorectal cancer patients when used in combination with chemotherapy, the world's second-biggest biotechnology company said on Monday before the open. Shares closed at $37.90.

Market watchers are predicting stocks are due for a breather and will likely trade in a narrow range this week amid a light economic and earnings calendar after a two-month rally that drove the S&P 500 near a nine-month high.

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