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I wonder if there will be a ripple effect down here.
Regards
Harmy

http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_topfin&bt=ad_position1_topfin&middle=ad_frame2_topfin&s=APEK5vBV0VS5TLiBT

01/14 05:58
U.S. Stocks Fall in Europe; Texas Instruments, Pharmacia Drop
By John Fraher


Frankfurt, Jan. 14 (Bloomberg) -- U.S. stocks fell in Europe after Merrill Lynch & Co. advised investors to hold fewer equities and more bonds because recent share-price gains reflect an overly optimistic earnings outlook. Texas Instruments Inc., J.P. Morgan Chase & Co. and Pharmacia Corp. dropped.

``Equity valuations now seem extreme,' Richard Bernstein, chief U.S. investment strategist at Merrill, said in a note e- mailed to investors. Investors should keep 50 percent of their holdings in stocks, down from 60 percent previously, he added.

March futures on the Standard & Poor's 500 Index slipped 3.30 points to 1144.50. Futures on the Dow Jones Industrial Average fell 13 points to 9975, and Nasdaq 100 Index futures lost 16 points to 1630.50.

Stocks declined Friday after Federal Reserve Chairman Alan Greenspan said he's concerned the economic recovery that's just beginning may not have enough strength to endure. The Dow shed 2.7 percent last week, its worst week since September.

Texas Instruments, whose semiconductors power two-thirds of the world's mobile phones, fell 35 cents to $26.89 in Germany. J.P. Morgan Chase, the No. 2 U.S. bank, dropped 64 cents to $37.70, and drugmaker Pharmacia Corp. slid 66 cents to $40.62.

The S&P 500, up 19 percent in the last four months, has a PEG ratio of more than 2.4, the highest in at least 21 years, Bernstein said. The PEG ratio compare a stock's price-to-earnings ratio with a company's forecast growth rate.

Fund managers should increase bond holdings to 30 percent of their portfolios from 20 percent and keep their cash allocation unchanged at 20 percent, Merrill said.

The S&P 500 fell 2.3 percent last week, and the Nasdaq Composite Index shed 1.8 percent.

Raytheon Gains, Miravant Drops

Raytheon Co. added 31 cents to $32.33 in Germany. The third- largest U.S. defense contractor agreed to sell its business that modernizes and repairs aircraft to L-3 Communications Holdings Inc. for $1.13 billion. Raytheon is trying to cut debt, which it incurred through a spree of acquisitions during the 1990s.

Miravant Medical Technologies slid $1.72 to $8.03 in Germany. The developer of light-activated drugs said a treatment for macular degeneration wasn't sufficiently effective in Phase III trials.

Companies expected to release earnings today include Charles Schwab Corp., the biggest discount brokerage firm; Fannie Mae, the No. 1 buyer of U.S. home loans; and PanAmSat Corp., the largest operator of commercial satellites.

Also today, Cathy Minehan, president of the Federal Reserve Bank of Boston, will speak on the U.S. economy at a luncheon in New Hampshire.
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