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Strategies & Market Trends : the Women of SI -- Ignore unavailable to you. Want to Upgrade?

To: Rainy_Day_Woman who wrote (969)	5/11/2000 8:36:00 AM
From: Rainy_Day_Woman	Read Replies (1) \| Respond to of 1691

NEW YORK, May 10 (Reuters) - U.S. stocks on Thursday were seen taking their cues from an April retail sales report with any numbers showing consumers remain on a spending spree likely to pressure the central bank to keep raising borrowing costs Analysts said a decisive 50-basis point hike by the Federal Reserve at its Tuesday meeting is already factored into the market but that a stronger-than-expected retail sales report could open the door for more hawkish fed action down the road. ``Retail sales will definitely give us some guidance,'' said Bryan Piskorowski of Prudential Securities. ``Basically investor psychology is against us right now. A 50-basis-point increase is already in the market. We are looking beyond that.'' The Standard & Poor's 500 index futures for June was up 0.90 of a point at 1,388.70 while the Nasdaq 100 index futures gained 1.50 points to 3,254. Analysts said the mildly positive index futures reflected the potential for a bounce at the open after Wednesday's sell-off marking the third straight down session for technology. The retail sales report, to be released at 8:30 a.m. EDT (1230 GMT), is expected to show that consumer spending pushed up 0.4 percent in April, matching last month's increase. The core rate, which strips out auto sales, is seen showing a rise of 0.3 percent compared with last month's 1.4 percent spike. Evidence of strong consumer spending, a main factor in the longest economic expansion in U.S. history, could strengthen the Fed's resolve to fight inflation with many Wall Street pros already betting on a 50-basis points hike next week. A basis point is a hundredth of a percentage point. A big move would be a departure from the inflation-fighting Fed's usual policy of raising rates in gradual increments of one-quarter of a percentage point at a time. The Fed has made five such moves since last June in an effort to curb inflation. Arthur Hogan, chief market analyst at Jefferies & Co., downplayed the importance of the retail sales figures, saying there was little that could change the direction of the market before the Fed meeting. Signalling the market's precarious state, Applied Materials Inc. (NasdaqNM:AMAT - news) dropped in pre-open trading despite the fact that the world's biggest maker of computer chip-making equipment reported second-quarter profits that more than tripled. ``We have Applied Materials hitting the numbers on all screws, but that's not good enough,'' said Hogan. ``You can't just be good. You have to be terrific in this current market.'' Last on the week's slate of key economic data is Friday's release of April's Producer Price Index, which is a gauge of inflationary pressures at the whole sale level. indicates prices at the wholesale level. The PPI is expected to register a decline of 0.2 percent at the headline level. When volatile food and energy prices are stripped out, the wholesale inflation yardstick is seen showing an increase of 0.1 percent. In other economic news, several Federal Reserve officials are set to speak on Thursday with Wall Street watching out for any clues about the Fed's plans for interest rates. Federal Reserve Bank of New York President William McDonough is scheduled to receive an honorary degree from New York University in New York City at 10:00 am. EDT (1400 GMT). In Phoenix, Ariz., Federal Reserve Gov. Edward Kelley is to talk about ``The Federal Reserve and the Payment Systems'' at 10:30 a.m. EDT (1430 GMT). And at 12:30 p.m. EDT (1630 GMT), Federal Reserve Vice Chairman Roger Ferguson speaks on ``Building a World-Class Economy.'' In early trading, the U.S. Treasury 10-year note gained 3/32, with the yield falling to 6.41 percent from Wednesday's close of 6.44 percent. The U.S. Treasury 30-year bond strengthened 3/32 with the yield flat with Wednesday's close of 6.15 percent. On Wednesday, the tech-driven Nasdaq composite index (^IXIC - news) shed 200.28 points, or 5.59 percent, to 3,384.73. Technology's swoon brought the Dow Jones industrial average (^DJI - news) down 168.97 points, or 1.60 percent, to 10,367.78. Broader market measures also reflected investors' fear of rising rates. The Standard & Poor's 500 index (^SPX - news) fell 29.09 points, or 2.06 percent, to 1,383.05. Among some of the other stocks expected to move on Thursday, Fox Entertainment (NYSE:FOX - news) reported third-quarter earnings Wednesday that beat Wall Street estimates, driven by strong growth in cable TV operations and Leonardo DiCaprio's box-office hit ``The Beach.'' The stock closed at 27-1/8. France's Publicis has continued to hold talks about buying advertising company Young & Rubicam (NYSE:YNR - news) even though the New York-based company has reached agreement in principle to be acquired by WPP Group (quote from Yahoo! UK & Ireland: WPP.L), the Wall Street Journal reported. Young & Rubicam closed at 46-1/4. Retailer Gap Inc. (NYSE:GPS - news), the parent of Gap, Old Navy and Banana Republic stores, reported first quarter earnings per share of $0.27 on Thursday. Its stock closed at 33-1/16.