AG ALERT FOR WEDNESDAY.
(COMTEX) B: US Equities Pre-opg: Dow seen flat to up 20; bond yields
B: US Equities Pre-opg: Dow seen flat to up 20; bond yields creep higher
Sep. 7-MAR--
[B] US Equities Pre-opg: Dow seen flat to up 20; bond yields creep
higher By Tom Wolf, Bridge News
New York--Sep 7--US stocks are set to open flat to slightly higher as
the strong rally in technology issues Friday appears ready to take a
rest. The yield on the 30-year Treasury bond crept higher to 6.03%,
which is seen tempering any further rally.
* * *
S&P 500 futures were recently unchanged at 1362, with fair value at
1359. Nasdaq 100 futures were off 6 at 2514. Fair value is at 2511.
US Dec Treasury bonds were recently down 6/32 at 114 6/32.
A tame August jobs report sent the major averages sharply higher and
bond prices climbing Friday as investors and traders saw less of a need
for the Fed to raise rates at its October meeting. The technology-heavy
Nasdaq 100 soared to a record closing high of 2506.69. The previous
intraday top was 2468.62, set in July.
"The rally is probably going to carry over into this week," said Jim
Benning, a trader at BT Brokerage. "If the upcoming economic numbers
are good, I could see us going to new highs."
Another big hurdle comes Friday, with the producer price index for
August. The August consumer price index will be released Sep 15.
In addition to inflation in goods and services, the Fed also is now
watching stock market levels and the effect of employee stock options
on consumer spending in determining monetary policy. But so far, the
market isn't concerned about it.
"To try to do something about that with interest rates isn't a precise
weapon," Benning said. "They'll end up throwing the economy into
recession before they can get the market to go down.
"I think they'll try to talk it down, but they won't change policy
because of the stock market," he said.
Investors will hear from Federal Reserve Board Chairman Alan
Greenspan Wednesday as he gives a luncheon address at Grand Valley
State University in Grand Rapids, Mich., as part of a lecture series on
"The American Century."
In merger news this morning, CBS (CBS) and Viacom (VIA) agreed to
merge in a deal valued at $80 billion. Sumner Redstone will be chief
executive of the combined company.
Hilton Hotels (HLT) intends to buy 55% of Promus Hotel (PRH) for
$38.50 a share in cash and the remainder in stock. Federal Realty (FRT)
plans to spin off its Main Street retail operations and is in talks to
sell its shopping center assets.
On the earnings front, Zale Corp. (ZLC) reported a fourth-quarter
profit of 23 cents a share, or 2 cents above the First Call estimate.
Overseas, France's second-quarter 1999 gross domestic product rose
0.6%, up from a 0.4% first-quarter gain and above analyst forecasts. In
Japan, second-quarter capital spending tumbled 13.4%, causing a
downward revision in growth forecasts and pushing the yen down versus
the dollar. Leading the market higher Friday were biotechnology,
Internet and semiconductor issues. Gold and metal mining stocks were
the only losers among major sectors.
Among S&P groups, 10 finished at their daily tops. Housewares,
specialty services healthcare and gold mining ended most off their
highs in percentage terms.
Volume was elevated for housewares, cellular and wireless, and home
furnishing textiles. Containers, metals mining and chemicals saw
relatively light trade.
In options trade, Electronics Data Systems (EDS) call options were
active for a second day as 1,000 Oct 55 contracts changed hands at 4
1/4,
up 1/4 on the day. Previous-day open call interest was 10 contracts.
EDS common shares rose 1 1/16 to 57 1/4.
In Asia, Hong Kong's Hang Seng index added 10.93, or 0.08%, to
13396.09. In Japan, the Nikkei 225 index fell 49.01, or 0.28%, to
17707.50.
In Europe, the UK's FTSE 100 index was last down 12, or 0.1%, at 6363.
In France, the CAC-40 was up 47, or 1.0%, to 4715. In Germany, the
Xetra/DAX was higher by 22, or 0.4%, to 5423.
The US dollar was last higher against the euro.
Provided by market sources:
SEP S&P 500 FUTURES SEP DJIA FUTURES
Based on 5.38% Libor rate
1.64 premium 14.46 premium
BUY-PROGRAMS: 2.45 premium 24.45 premium
SELL-PROGRAMS: 0.85 premium 4.45 premium
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ON THE ECONOMIC CALENDAR:
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- --1000 ET: The Federal Reserve Board holds an open meeting to
discuss the Board's proposed 2000-01 budget and the proposed 2000-01
budget for the Office of the Inspector
--About 1330 ET: Treasury announces results of its auction of $14.0
bln in 13- & 26-week bills; (Previous: 13-week accepted rate 4.875%,
26-week 4.990%)
--1500 ET: Aug Treasury strips report on government securities
(tentative); (Jul: -$1.067 bln to $223.077 bln)
--1600 ET: American Petroleum Institute's weekly US oil statistics for
week ended Aug 27
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- For daily technical analysis on the Dow Jones Industrial average and
the S&P 500 index, see Story .306
For our daily corporate summary, see Story .1305
For today's earnings calendar, see Story .1301
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End Bridge News, Tel: (212) 372-7568 More to follow...
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