Stocks are set to open significantly below their close from yesterday after last night's report that telecom services giant WorldCom (NASDAQ:WCOM) will restate its financial results for all of 2001 and the first quarter of 2002 to take almost $3.8 billion in cash flow off its books, wiping out all profit during those times.
The second-largest U.S. long distance telephone provider also dismissed CFO Scott Sullivan while David Myers, senior vice president and controller, was allowed to resign. The company also said it will cut approximately 17,000 jobs, beginning Friday, to save $900 million annually.
The markets have responded and sent stock futures plunging. S&P futures are down 26 points at 948, NASDAQ futures are falling 47 points to 980, while Dow futures are down 225 points at 8,880.
Fair value for the S&P 500 today is $1.68. That price will not change during the session. HL Camp & Company has their computers set for program buying at $3.22 and set for selling at $-0.62. Fair value for the NASDAQ-100 today is $5.93.
Further defensive action is seen in the Treasury market as bonds see aggressive buying. YIELD across all the maturities are lower, with the 10-year YIELD plunging to 4.646%.
August Gold futures (gc02q) 324.40 +1.21% are higher, also depicting a market that is beginning to panic as a market environment already undermined by accounting scandals and earnings woes is dealt another blow from WorldCom (WCOM).
U.S. equity markets won't be the only markets taking a hit to the downside today. In overseas trading Japan's Nikkei 225 is down 4.02%, Hong Kong's Hang Seng is down 2.39% and South Korea's Seoul Composite is down 7.15%. In Europe, France's CAC 40 is down 4.08%, Germany's DAX is lower by 3.96% and the UK's FTSE 100 is lower by 3.13%.