All Eyes on Economic Data
Unknown Comtex Source - June 01, 2000 08:27
New York, Jun 01, 2000 (123Jump via COMTEX) -- The Labor Department is set to release employment data at 8:30 a.m. this morning. Investors are waiting to see the jobless claims and the National Association of Purchasing Management's nationwide survey of May manufacturing activity. These numbers, which will indicate the direction of the U.S. economy, are a major factor in the Federal Reserve's decision-making process for hiking interest rates.
Initial jobless claims for the week ended May 27 are expected to total 280,000, compared with 284,000 in the prior week. Construction spending for April, to be released at 10:00 a.m., is expected to fall 0.5%, compared with March's 1.4% climb.
Investors are currently waiting for any clues that may indicate an end to the Federal Reserve's rate-raising spree. A series of rate hikes by the Fed, eight increases since last June, had a dampening impact on the stock and bond markets. However, in the last few days, economic data has shown some signs of a cooling U.S. economy. A few more positive indicators may change the sentiments on Wall Street, potentially triggering another bull run.
In corporate events, a ruling in the Microsoft (MSFT) case is expected sometime Thursday. U.S. District Judge Thomas Penfield Jackson, who ruled in April that Microsoft violated federal antitrust laws, will issue the finding. The software giant filed its final arguments Wednesday against the proposed breakup of the company and requested a 12-month delay if there is any split. Government regulators are proposing a four-month period.
Yesterday, technology stocks closed lower but not as low as was expected. Blue chips posted modest gains. In the end, the Nasdaq Composite Index, which gained 7.94% on Tuesday, gave back 1.69%, or 58.57 points, to 3400.91. The Dow Jones Industrial Average ended the day almost unchanged, edging lower by just 4.80 points, or 0.05%, to 10522.33.
The market outlook indicates that stocks may open slightly positive early Thursday. The S&P future on the Globex trading system was up 3.80 points to 1426 slightly before 7:30 a.m. That's 2.15 points above fair value for the futures, which was estimated by London traders at 1423.85. Nasdaq futures were up 28 to 3353; that's 19.67 points above fair value of 3424.01.
Globally, stocks were led into positive territory by tech issues. The Nikkei 225 Index surged 361.85 points, or 2.2%, to 16694.30. Hong Kong's Hang Seng Index advanced 227.33 points, or 1.6%, to 14941.19, while Singapore's Straits Times Index was up 42.13 points, or 2.4%, to 1837.26. European stocks are also trading modestly higher mid-morning Thursday.
Stocks to Watch
Direct mail marketing services company Advo Inc. (AD) is expecting its third-quarter sales and per-share earnings to come in well ahead of analysts' consensus estimates of 68 cents per share.
Aetna (AET) may sell its financial services and international business divisions in part or whole to ING Group. Aetna currently is working with ING on its new proposal to buy these businesses. Aetna shares closed up 4 1/4, or 6.5%, at 66 3/4.
After the markets closed, Comverse Technology Inc. (CMVT), a seller of messaging systems to phone companies, said it had net income of 33 cents per share in its first quarter ended April 30, beating the 31-cent average estimate from analysts polled by First Call.
ExciteAtHome (ATHM) announced a strategic alliance with Akamai Technologies (AKAM) to improve the content and applications delivery over ExciteAtHome's network. ExciteAtHome expects that the alliance would help solve two major Internet bottlenecks.
Gap Inc. (GPS) posted sales of $930 million in May, up 19% over the comparable period last year. Same-store sales for the period fell 2%, compared to an 8% increase in May 1999.
Gemstar International Group (GMST) posted better-than-expected earnings in the fourth quarter. The company said net income rose to $43.2 million, excluding a charge of 17 cents per share and surpassing consensus estimates by 3 cents.
Net2Phone (NTOP) recorded a net loss of $11.4 million, or 21 cents per share, in the fiscal third quarter. However, the company doubled its quarterly sales to $18.9 million from last year's $9 million.
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