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Vice-Chairman of Goldman Sachs, Robert Hormuts
"The economy is weak and getting weaker"
 real 28k

Jeffrey Frankel, Bureau of Economic Research
"Over the preceding four years the average growth rate was very strong"
 real 28k

Wednesday, 27 June, 2001, 08:12 GMT 09:12 UK
Investors await US rates decision
Trader on the floor of the New York Stock Exchange
US traders: unnerved by Merrill Lynch's announcement
Global investors are standing firm against the latest round of stock market jitters ahead of the US interest rate decision due at 1915 BST (1815 GMT) on Wednesday.

The US central bank, the Federal Reserve, has already cut interest rates five times this year in an attempt to jumpstart the flagging economy.

It is widely expected to cut again, by at least 0.25%, as corporate profits continue to slide despite earlier rate cuts.

Ahead of the decision, markets in the US and Asia avoided the worst of earlier gloom, helping set up positive starts in London, Paris and Frankfurt.

After nearly an hour of trading on Wednesday London's FTSE 100 index was 20.4 points higher at 5,576, Germany's Dax was down 6.9 points at 5,841 and the Paris Cac was 6.8 points higher at 5,097.

That came despite a profits warning from Bayer and news that Alcatel was planning to sell or close the majority of its factories as the economic slowdown continues to hurt European businesses.

Tokyo and Europe

On Wednesday in Tokyo, shares had held steady for most of the session before the benchmark Nikkei index dipped to close down 149.8 points at 12,823. Hong Kong's Hang Seng was largely unchanged.

This performance belied a weak performance on Tuesday particularly by European technology stocks, which were dragged lower by Cap Gemini's statement.

Cap Gemini shares fell 23% on the Paris Stock Exchange, with its peers in London also taking a hammering.

Logica closed 9% lower, CMG 6.25% down, Misys lost 3.9% helping the FTSE 100 index to close 106 points lower.

And US shares were hit by Merrill Lynch's decision to cut its revenue and profits forecast for the second quarter, and give a gloomy assessment of prospects for recovery in its sector.

But the broad ranging Dow Jones industrial average ended just 0.13% lower, and the tech-heavy Nasdaq reported a small rise.

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The Markets: 9:29 UK
FTSE 100 5760.40 -151.7
Dow Jones 11380.99 -119.7
Nasdaq 2243.78 -28.9
FTSE delayed by 15 mins, Dow and Nasdaq by 20 mins


Analysis
See also:

26 Jun 01 | Business
Fed meets to decide on rates
26 Jun 01 | Business
Techs lead European share slump
26 Jun 01 | Business
US consumers remain upbeat
26 Jun 01 | Business
Cap Gemini warns of lower profits
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