<FONT COLOR=BLUE>MARKET SNAPSHOT--Tame data fuels market's fire
PPI off 0.2%; retail sales up 0.2%
By Julie Rannazzisi, CBS.MarketWatch.com
Last Update: 9:55 AM ET Sep 14, 2000 NewsWatch
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NEW YORK (CBS.MW) - With the help of a batch of benign economic numbers, the major averages flexed their muscles Thursday, led by technology issues.
The producer price slipped 0.2 percent, much less than the expected 0.2 percent rise. The core, which excludes the volatile food and energy components, added 0.1 percent, also less than the projected 0.2 percent increase. The PPI has risen 3.3 percent in the past 12 months while the core rate is up 1.5 percent. See full story.
And the market got more confirmation that retail spending in on the wane. Retail sales edged up 0.2 percent versus the 0.4 percent rise expected by economists with consumers witnessing some temporary relief from higher gasoline prices in the month of August. Excluding autos, retail sales edged up 0.3 percent. See full story.
The Dow Jones Industrials Average ($DJ: news, msgs) edged up 13 points, or 0.1 percent, to 11,196.
McDonald's (MCD: news, msgs) fell $1 below Wednesday's official NYSE close to $27.31. After the close Wednesday, Dow-component McDonald's (MCD: news, msgs) said that weaker foreign currencies would have an adverse effect on its earnings, reducing per-share estimates by as much as seven cents. First Call had expected McDonald's to earn $1.51 per share in 2000.
The Nasdaq Composite ($COMPQ: news, msgs) rallied 72 points, or 1.8 percent, to 3,965 while the Nasdaq 100 Index ($NDX: news, msgs) climbed 81 points, or 2.2 percent, to 3,822.
The Standard & Poor's 500 Index ($SPX: news, msgs) advanced 0.5 percent while the Russell 2000 Index ($RUT: news, msgs) of small-capitalization stocks gained 0.7 percent.
In earnings news, Bear Stearns (BSC: news, msgs) said it earned $1.32 a share in its third quarter, well ahead of the First Call estimate of $1.19 a share and the $1.19 earned in the same quarter last year. Shares added $1.25 to $70.25 after dropping 3.7 percent on Wednesday.
Separately, volume checked in at 79.6 million on the NYSE and at 142 million on the Nasdaq Stock Market. Market breadth was slightly positive, with winners outpacing losers by 10 to 8 on the NYSE and by 19 to 9 on the Nasdaq.
Soft landing in store?
The economic data continue to support the accepted notion that the U.S. economy is heading for a soft landing -- with less torrid, more sustainable growth that will keep inflationary pressure under wraps.
The soft landing scenario is, of course, the best one for stocks and bonds. One cloud on the horizon, however, is the swelling price of oil, which could seep into the core rate of inflation and pressure the Fed to hike rates down the road. So far, however, the inflation gauges have remained remarkably tame in the face of higher oil prices. Thursday's numbers reinforce the view that the Fed can stay on hold for the remainder of the year.
Treasury focus
Treasury prices were mixed after a short-lived positive reaction to the morning's batch of positive economic news.
The 10-year Treasury note added 5/32 to yield ($TNX: news, msgs) 5.71 percent and the 30-year Treasury bond shed 5/32 to yield ($TYX: news, msgs) 5.74 percent. See Bond Report.
In the meantime, the bond market will be processing a heady $5 billion offering from Spain's Telefonica, which launched late Wednesday.
In other news, weekly jobless claims added 13,000 to 324,000. See Economic Preview, economic calendar and forecasts and historical economic data.
In the currency sector, dollar/yen (C_JPY: news, msgs) eked out a 0.1 percent gain to 107.07 while euro/dollar (C_EUR: news, msgs) rallied 0.5 percent to 0.8644. As expected, the Bank of Japan opted to leave short-term rates unchanged following August's move to put an end to its zero-rate policy.
The euro rallied after the European Central Bank disclosed it would sell foreign currency reserves in the order of euro 2.5 billion to buy euros. However, the central bank stressed the move did not correspond to an intervention to support the beleaguered currency but was just ordinary reserve management. In other news, the ECB left interest rates steady at its policy-setting meeting Thursday.
Julie Rannazzisi is markets editor for CBS.MarketWatch.com. |
