US/MALAYSIA MARKET MORNING QUOTES

KL shares seen opening flat

MALAYSIAN shares are expected to open flat today, with foreign investors taking a pause after two days of heavy selling triggered partly by US financial woes.
US stocks fell yesterday due to persistent uncertainty about the amount of money needed to shore up the financial system. The S&P index ended below 700 points for the first time since October 1996 and the Dow Jones industrial average fell 0.55 per cent.
“Buyers are still on the downside but I don’t see much of follow-through (from the Dow Jones) and the market will be resilient,” said a local dealer.
The Kuala Lumpur Composite Index ended 0.89 per cent lower at 868.74 points yesterday.

The market has already suffered over the last two days in the aftermath of rights issues by top lender Maybank and mobile telephone company TM International, the dealer said.
“I won’t be surprised if eventually the Dow Jones keeps declining, ours will follow suit, but at this stage I think the pace is slower,” said the dealer. - REUTERS

Wall Street Shows Modest Losses a Day After Tumble

Investors bruised by Wall Street's latest rout found little reason to pile back into the market.

Stocks extended their losses in an erratic session Tuesday as investors wrestled with the reality that the economy is still far from a recovery. The pessimism that has dominated the markets for months stifled some tentative bargain hunting and in the process unraveled several attempts at a rally.

Tuesday's fluctuations came as Federal Reserve Chairman Ben Bernanke told Congress an economic recovery depends on the government's ability to stabilize weak financial markets. He said the efforts were needed to avoid "a prolonged episode of economic stagnation."

Bernanke's remarks came as the central bank announced it would begin lending up to $200 billion in an initial move to spur consumer and small business borrowing for autos, education, credit cards and other expenses. The Fed first announced the plan late last year.

That offered some support to the market and helped curb selling, traders said.

According to preliminary calculations, the Dow fell 37.27, or 0.6 percent, to 6,726.02. Broader stock indicators also fell. The S&P 500 index slid 4.49, or 0.6 percent, to 696.33. The Nasdaq composite index fell a modest 1.84, or 0.1 percent, to 1,321.01.

Brian Reynolds, chief market strategist at New York-based WJB Capital Group, said the market's slide means it could be ripe for a bounce but that a lasting recovery won't come until credit market investors begin to put money into riskier debt that is now out of favor.

He contends the S&P 500 index, which is down 22.9 percent in 2009, will fall to the 600 level. That would be a drop of more than 60 percent from the index's record close of 1,565.15 in October 2007.