Updated Market News--The Washington Post:>>>U.S. Stocks Seen Opening Higher
By Margaret Webb Pressler
Washington Post Staff Writer
Tuesday , June 13, 2000
After yesterday's rally was erased by a late-day sell-off, investors were bullish after this morning's weaker-than-expected retail sales figures for May--the first of several important economic reports to be released this week.
This morning's report showed retail sales declined 0.3 percent in May. Economists had expected that the figure would would have risen 0.1 percent last month. Today's report also said that retail sales for April were revised downward to show a decline of 0.6 percent from the 0.2 percent decrease reported earlier. The decline in May's figure will add support for the growing view that the Federal Reserve will decide not to raise interest rates again when it meets again later this month.
Shortly after 8:30 a.m., the S&P futures index is trading more than ten points above fair value, suggesting the market could move sharply higher at the opening bell. Typically, each point of difference between the futures index and fair value represents about eight points of the Dow Jones industrial average. Nasdaq futures are also trading higher this morning.
But the market is in a quandary these days: on one hand, it wants to see signs of a slowdown, because it does not want the Fed to push interest rates higher. On the other hand, if the economy slows too much, it could hurt corporate profits. The retail sector has already been hurt in recent weeks by fears that consumer spending is tightening--and scattered reports from some chains that their profits are falling.
In addition to walking this tightrope between excessive growth and weaker profits, the market has also been whipped lately by the wide variation in financial results from the nation's companies. Yesterday, for example, the market's early optimism was derailed by a couple of reports from technology firms that their earnings would be below expectations. Investors had to weigh that news against a statement from fiber optic company Corning that its results would come in well above Wall Street estimates. In the end, the bears won out.
Today could just make the mix of good news and bad news even harder to sort out. In addition to scouring the Commerce Department release on retail sales, today investors will be weighing earnings reports from consumer electronics chain Best Buy and home retailer Pier One Imports.
Overseas, markets in Europe turned higher, with stocks rising in London, Paris and Frankfurt. In Asia, most major markets fell today, though the decline was modest in Tokyo. The Nikkei 225 lost 65.66 to close today at 16,914.95.
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