U.S. stocks seen ticking higher at open, retail sales loom
By Denise Duclaux
NEW YORK, March 13 (Reuters) - Stocks are expected to creep
higher at the opening bell on Tuesday as investors tiptoe back
into the market to pick up battered shares after a gruesome
session fueled by fears over corporate earnings growth and the
nation's economic health.
"We are looking at a steady open, but it will be a struggle
throughout the day," said Larry Wachtel, a market analyst at
Prudential Securities. "We are in crisis condition here. The
market has to bottom in its own way, and there is nothing that
you can introduce that is going to change the tide."
Indeed, tensions are running sky-high after the tech-rich
Nasdaq Composite spiraled below the key 2,000 mark, the
blue-chip Dow Jones Industrials Average notched its fifth-worst
point drop ever and the broad Standard & Poor's 500 hurtled
into bear territory with its sixth-largest point drop ever.
With more than an hour to go before the opening bell,
Nasdaq 100 index futures for June nosed up 11 points to
1,724.50, pointing to a modest gain of 0.6 percent in Nasdaq's
100 biggest stocks at the open. Standard & Poor's 500 index
futures edged up 2.50 points to 1,194.10. Dow Jones Industrial
futures gained 32 points to 10,315.
Wall Street will be scanning retail sales numbers before
the opening bell, hoping for more hints on the state of the
economy and the Federal Reserve's next interest-rate move.
Economists polled by Reuters forecast that U.S. retail
sales rose 0.4 percent in February after a surprisingly strong
0.7 percent gain in January. An in-line or weaker number for
February could bolster hopes the Federal Reserve would cut
interest rates by at least 50 basis points at its next
policy-setting meeting on March 20.
Many analysts, however, say that easing has already been
factored into the market. Last Friday, the jobs market showed
surprising resiliency in the face of the weakening economy and
deflated hopes for a hefty 75-basis-point cut.
Overseas markets weakened on Tuesday as concern mounted
that the U.S. slowdown may spread across the globe. The
pan-European FTSE Eurotop 300 <.FTEU3> fell 1.22 percent. The
Euro Stoxx 50 index <.STOXX50E> dropped 1.07 percent.
Tokyo's key index lurched below 12,000 for the first time
in over 16 years. The benchmark Nikkei average <.N225> shed
351.67 points or 2.89 percent to finish at 11,819.70, its
lowest close since January 28, 1985, on broad-based selling.
Another merger will grab Wall Street's attention on
Tuesday. Diversified manufacturing and services company Tyco
International Ltd. <TYC.N> before the market opened said it
would buy CIT Group Inc. <CIT.N> for about $9.2 billion in
stock to add a large financing component to its businesses.
In other corporate news, International Business Machines
Corp. <IBM.N> and Japan's biggest electronics maker Hitachi
Ltd. said on Tuesday before the open they will cooperate in
making and selling powerful business computers, semiconductors
and other computer gear.
Natural gas company Barrett Resources Corp. <BRR.N> said
Monday after the market closed its board would meet to consider
Royal Dutch/Shell Group's <RD.AS> <SHEL.L> $1.8 billion
takeover bid, and will make a formal recommendation on the
previously rejected bid within 10 business days.
The earnings warnings keep rolling in. Newspaper publisher
E.W. Scripps Co. <SSP.N> on Monday after the close trimmed its
first-quarter and full-year earnings expectations, the latest
company to be hit by the softer-than-expected advertising
market.
Electronic component maker Molex Inc. <MOLX.O> warned on
Monday after the close that it will miss fiscal third-quarter
estimates because of slow orders from the personal computer,
cellular phone and automotive markets.
Semiconductor supply maker Cabot Microelectronics Corp.
<CCMP.O> on Monday after the close warned that second-quarter
revenues would decrease from the first quarter due to a
slowdown in customer orders.
The tech-laden Nasdaq index <.IXIC>, which rose to a record
high of 5,048.62 a year ago on March 10, fell 129.40 points, or
6.30 percent, to 1,923.39 on Monday. It was the weakest Nasdaq
close since Nov. 19, 1998, when it finished at 1,919.68. The
last time the Nasdaq traded under the 2000 mark was Dec. 16,
1998.
The Dow <.DJI> plunged 436.37 points, or more than 4
percent, to 10,208.25, suffering its fifth-largest point drop
ever and hitting its lowest close since late October 2000.
The broader S&P <.SPX> fell 53.26 points, or 4.32 percent,
to 1,180.16. The S&P is now in bear territory, down 22.73
percent from its closing high of 1,527.46 reached on March 24,
2000.
((Wall Street Desk, (212) 859-1709))
REUTERS
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