MARKET SNAPSHOT
Investors pile into tech shares
PPI up 0.6%; retail sales up 0.5%
By Julie Rannazzisi, CBS.MarketWatch.com
Last Update: 9:54 AM ET Jul 14, 2000 NewsWatch
Latest headlines
NEW YORK (CBS.MW) -- U.S. shares are bracing for a nice pop at the open Friday on the heels of news that wholesale inflation remained tame in June.
In the meantime, investors will also continue to digest earnings releases, which thus far have generated a great deal of buying interest in technology issues.
The Dow Jones Industrial Average edged up 2 points to 10,790 at 9:53 a.m.
The Dow's upside leaders included J.P. Morgan, Wal-Mart and Citigroup.
The Nasdaq Composite climbed 40 points, or 1.0 percent, to 4,215 while the Nasdaq 100 Index tacked on 49 points, or 1.3 percent, to 4,006.
The Standard & Poor's 500 Index gained 0.4 percent while the Russell 2000 Index of small-capitalization stocks added 0.1 percent.
Volume stood at 91.1 million on the NYSE and at 183 million on the Nasdaq Stock Market. Winners beat losers by 12 to 7 on the NYSE and by 16 to 12 on the Nasdaq.
Separately, equity funds had inflows of $1.1 billion in week ended Wednesday compared with inflows of $7.5 billion during the prior week, Trim Tabs said.
Equity funds that invest primarily in U.S. stocks had inflows of
$1.1 billion compared with inflows of $6.6 billion during the prior
week.
Inside PPI, retail sales
The June producer price index rose by an as-expected 0.6 percent while the closely-watched core rate, which excludes food and energy components, slipped by 0.1 percent compared to expectations for a 0.1 percent increase. See full story.
"The core PPI number was well-behaved. There's really no evidence of pipeline inflation or broadening price pressures here," said Peter Kretzmer, senior economist at Banc of America Securities. But oil prices will continue to put upward pressure on the headline numbers for the next months, he added.
In the meantime, consumer spending remained healthy in June, with retail sales climbing 0.5 percent compared to expectations for a 0.3 percent increase. Excluding autos, retail sales rose 0.2 percent, less than the expected 0.3 percent increase. And May retail sales were upwardly revised to show a 0.3 percent rise from the previously reported 0.3 percent decline. Read the story.
"The consumer spending numbers were modestly bearish. The degree of the slowdown in the second quarter was a little milder than previously expected," Kretzmer said.
For the Fed, this has to raise some doubts as to whether a slowdown has taken hold in a material way, Kretzmer concluded.
In other economic news, June industrial production rose 0.2 percent compared to the expected 0.3 percent increase while capacity utilization came in at 82.1 percent, as expected. View Economic Preview, economic calendar and forecasts and historical economic data.
Sector movers
The chip sector lifted on the heels of Altera's better-than-expected earnings news. The Philadelphia Semiconductor Index ($SOX: news, msgs) rose 3.6 percent.
Altera put on 13 15/16, or about 13 percent, to 125. After the close Thursday, Altera (ALTR: news, msgs) posted second-quarter earnings of 49 cents a share, surpassing the First Call estimate of 44 cents a share. The company also declared a 2-for-1 stock split. See full story.
But PMC-Sierra lost 7 3/4 to 221 3/16. Late Thursday, the company (PMCS: news, msgs) checked in with a second-quarter profit of 23 cents a share compared to the First Call estimate of 19 cents a share and 9 cents a share in the year-ago period.
And Vitesse Semiconductor (VTSS: news, msgs) said after the close Thursday that it made 17 cents in its third quarter, matching the First Call estimate. The company earned 8 cents a share in the same period last year. The stock dropped 9 3/8 to 77 5/16. Read the story.
In the computer hardware arena, Gateway lost 2 1/8 to 68 3/8. The Goldman Sachs Computer Hardware Index ($GHA: news, msgs) added 0.6 percent.
The company (GTW: news, msgs) reported second-quarter earnings of 37 cents after the close of trading Friday, which compared to the First Call estimate of 36 cents a share and 28 cents in the year-ago quarter. See story.
Treasury focus
Bond markets slipped -- with short issues again lagging the long end of the curve -- after posting short-lived gains immediately after the morning's dose of economic news was released.
Kretzmer believes Friday's economic data will cause the front end of the Treasury curve to price in a slightly higher chance of a 25-basis-point tightening at the August 22 FOMC meeting.
The 10-year Treasury note shed 11/32 to yield 6.05 percent while the 30-year bond lost 1/8 to yield 5.83 percent. See Bond Report.
In the currency arena, dollar/yen edged up 0.3 percent to 108.32 while euro/dollar fell for the fourth consecutive session, losing 0.3 percent to 0.9340. See latest currency rates.
In the commodity market, August crude lost 17 cents to $31.30 while the Bridge CRB index dropped 1.02 to 221.58.
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Julie Rannazzisi is markets editor for CBS.MarketWatch.com. |
