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Wall St seen sharply lower after London explosions

Wall St seen sharply lower after London explosions
Thu Jul 7, 2005 11:04 AM BST
By Marie Maitre

PARIS (Reuters) - Unexplained explosions in the London underground network, and oil prices at fresh record levels, were likely to hammer U.S. equity markets when they open on Thursday.

U.S. stock futures pointed to opening losses of 1.4 percent to 2 percent for the three main indexes by 0957 GMT as reports of major incidents on London's underground railway swept European markets -- a day after the city was awarded the 2012 Olympics.

Crude oil prices well above $61 a barrel, as the year's first Atlantic hurricane threatened U.S. Gulf production and refining, was likely to be compounded by the confusion surrounding the London incidents -- where underground services were suspended following a city-wide power outage. Police and transport officials said there had been some fatalities.

Police also reported a bus explosion in central London.

The resurgence of worries about possible terror attacks on Western interests was likely to prompt many investors to lock in the profits made on markets at multi-month highs, market observers said.

"The market's first reaction is always going to be to stop buying, mark things down, people are going to sell on uncertainty. There are going to be worries about what it might be, the implications," said John Smith, investor director at Brown Shipley.

"The first reaction is one of uncertainty and just concern for more details. The lack of information in the short-term is going to make people cautious."

The event is likely to overshadow earnings results from aluminium giant and economy bellwether Alcoa (AA.N: Quote, Profile, Research), and Pepsi Bottling (PBG.N: Quote, Profile, Research) on Thursday.

On Wednesday, the Dow Jones industrial average dropped 1 percent to 10,270.68, while the technology-laced Nasdaq Composite Index lost 0.49 percent, to 2,068.65.


LINK: http://today.reuters.co.uk/news/newsArticle.aspx?type=businessNews&storyID=2005-07-07T100427Z_01...