NEW YORK, March 23 (Reuters) - U.S. stocks were seen opening flat to higher on Friday as momentum from the previous session's rally was expected to overpower the urge to cash in on the big run-up.
Wall Street remains in buying mode with strong first-quarter corporate earnings predicted, but concerns that interest rates may go higher still to ward off inflation may temper the upbeat outlook, analysts said.
The Standard & Poor's 500 futures index for June rose 2.50 points to 1,546.50 while the Nasdaq futures index for June was up 37.50 points at 4,770.00.
``On the positive side, we are expecting strong earnings,' said Peter Coolidge, senior equity trader at Brean Murray & Co. ``But on the heels of yet another strong day, I would be looking for some profit-taking at some time. It just depends when it happens. It is hard to get in the way of momentum.'
One piece of news that could weigh on markets came from the minutes of the Feb. 1-2 meeting of the Federal Reserve's rate-setting Federal Open Market Committee, which took interest rates higher on Tuesday for the fifth times since mid-1999.
According to the minutes released on Thursday, members agreed to raise short-term borrowing costs modestly, even as some of them argued for more forceful increases to keep inflation under control in the booming U.S. economy.
On the economic news front on Friday, Wall Street was expecting durable goods orders for February to show a 0.2 percent decline, but economists warned not to assume the predicted decline necessarily means a slowdown in manufacturing activity. The figures were due out at 8:30 a.m. EST (1330 GMT)before the market opens.
``I do think the overall trend is still bullish but you are going to get some bouts of profit-taking,' said James Volk, co-director of institutional trading at D.A. Davidson & Co. ``The markets are getting a little complacent. We may be setting ourselves up for a correction down the road.'
Oil prices, which swung higher in London on Friday as the United States made a last-ditch effort to persuade OPEC to agree to a big output hike at a cartel gathering next week, could also affect stock trading, analysts said.
In early trade, the 30-year U.S. Treasury bond slipped 4/32, driving the yield up to 5.92 percent from Thursday's close of 5.91 percent.
On Thursday, the Dow Jones industrial average (^DJI - news) soared 253.16 points, or 2.33 percent, to close at 11,119.86. The rally put the Dow above 11,000 for the first time in six weeks.
The broader Standard & Poor's 500 Index (^SPX - news) gained 26.71 points, or 1.78 percent, to 1,527.35, improving on Wednesday's record finish.
The Nasdaq composite (^IXIC - news) rose 75.86 points, or 1.56 percent, to 4,940.61.
Among the stocks expected to move on Friday, Wit Capital Group Inc. (NasdaqNM:WITC - news), the parent of online investment banking group Wit Soundview, said Thursday it expects first-quarter results to ``significantly' exceed analyst estimates on the strength of market conditions and its recent merger. The stock closed at 16-9/16.
Eye care company Bausch & Lomb Inc (NYSE:BOL - news) on Thursday offered to buy Wesley Jessen VisionCare Inc (NasdaqNM:WJCO - news), the No. 1 maker of tinted contact lenses, for about $600 million three days after Wesley Jessen agreed to buy a separate contact lens rival. Bausch & Lomb closed at 55-5/8 while Wesley Jessen closed at 33-7/16.
Xircom Inc. (NasdaqNM:XIRC - news), which makes products that enable computers to connect to networks, said on Friday it sees its quarterly earnings falling short of Wall Street expectations, due in part to the Y2K issue. The stock closed at 41.
The president of U.S. toymaker Mattel Inc. (NYSE:MAT - news), Ned Mansour, told staff he would leave his post at the end of this month, the Wall Street Journal reported in its online edition on Friday. The stock closed at 10-1/2. |
