Well you can always just "Lurk " in the room no need to have to take up your time with the mic ....just throw in an observation once in a while .
Investors eye rebound, seen lifting stocks
By Denise Duclaux
NEW YORK, May 6 (Reuters) - Investors are expected to nudge
the stock market higher this week in a bet that the sputtering
U.S. economy will gather speed by year's end.
"The market continues to show remarkable resiliency despite
disappointing economic news and earnings reports that leave a
lot to be desired," said Alan Ackerman, executive vice
president at brokerage Fahnestock & Co. "Money is moving in
from the sidelines."
Investors sent the market higher on Friday, even after the
government said the economy lost jobs in April at the fastest
rate in a decade. The technology-loaded Nasdaq composite index
<.IXIC>, which closed up 2.1 percent on Friday, has surged
almost 34 percent since hitting a two-and-half-year closing low
on April 4.
This week, investors will scour U.S. retail sales, an
initial reading on consumer sentiment and a handful of earnings
reports, including numbers out of Internet gear giant Cisco
Systems Inc. <CSCO.O>, to glean more clues on the economy's
health. But many are betting the Federal Reserve's four-deep
interest-rate cuts will spark an economic rebound by the second
half of the year. Most Fed watchers expect another cut on May
15.
"I would expect the market to move higher, but I wouldn't
expect it to launch into an uninterrupted trend that shoots
straight up like a rocket," said Paul Cherney, an analyst at
S&P Marketscope. "The bias is positive though."
ECONOMIC DATA GRABS SPOTLIGHT
Wall Street now is almost unanimous in forecasts that the
Fed will cut short-term rates by another half percentage point
to 4 percent at its policy-setting meeting on May 15, according
to a recent Reuters poll. Just 15 out of 25 dealers held this
view a little over two weeks ago.
Many felt Friday's unexpectedly weak jobs report virtually
guaranteed another steep cut. The Labor Department said
employers slashed 223,000 workers off their payrolls last month
after cutting 53,000 jobs in March.
The jobless rate jumped to 4.5 percent, the highest level
since October 1998, from 4.3 percent in March. April's payrolls
loss was the biggest since a drop of 259,000 in February 1991,
just as the last 1990-91 recession was coming to an end.
"The numbers basically guarantee that the Fed does 50 basis
points on May 15," said Anthony Chan, chief economist at Banc
One Investment Advisors.
Investors, confident that another deep cut is in the bag,
hope to see hints of economic strength. On Friday, the Commerce
Department is expected to report that retail sales perked 0.2
percent in April, after slipping 0.2 percent in March,
according to economists polled by Reuters. Excluding auto
sales, the number is expected to rise 0.4 percent versus a 0.1
percent decline in March.
"If the retail-sales number remains relatively strong --
and right now the consensus still looks for a relatively robust
number -- then I think that will probably boost the market,
because there will be hope the economy is going to miss a
recession," said Milton Ezrati, a senior economic strategist at
Lord Abbett & Co., which oversees about $40 billion in assets.
Also on Friday, the Labor Department is set to release the
Producer Price Index, a broad gauge of inflation. The PPI is
expected to rise 0.4 percent in April versus a decline of 0.1
percent in March, according to a Reuters poll. The core rate,
which strips out volatile food and energy costs, is expected to
tick up 0.1 percent, matching March's 0.1 percent rise.
"The PPI will be important if it would be out of the
envelope to the upside, then some concern would be created that
it would represent a stumbling block to aggressive Fed easing,"
Cherney said, explaining that an inflation uptick could cause
the Fed to hesitate before cutting rates.
Investors will also eye the University of Michigan's
preliminary survey on consumer sentiment on Friday, which is
expected to slip to a reading of 87.6 in May from 88.4 in
April. On Thursday, speeches by Fed Chairman Alan Greenspan and
Chicago Fed President Michael Moskow will be closely watched.
CISCO COULD OFFER DIRECTION
The rush of quarterly earnings reports is over, but Wall
Street is still waiting for results out of a handful of
corporate giants, including Nasdaq heavyweight Cisco.
Cisco will post quarterly results on Tuesday, but analysts
have their eyes on the future, looking to see if the company
offers signals on its outlook. The company already warned that
quarterly results will be far below forecasts.
"Really, it almost doesn't matter how ugly this quarter's
number is as long as they can give pretty decent forward
guidance," said Kevin Landis, portfolio manager with mutual
fund company Firsthand Funds.
Health insurance giant Aetna Inc. <AET.N>, and insurance
company MetLife Inc. <MET.N> were also to report quarterly
results this week.
(( -- Wall Street Desk, 212-859-1709 -- ))
REUTERS
*** end of story *** |
