Consumer Price Index
is out, and it's not turning many heads on Wall Street today.
The headline CPI gained 0.2% overall, matching the
poll consensus estimate of 0.2%. The core rate, which excludes food and energy prices, gained 0.2%, also in line with expectations.
At first, stock futures and bonds didn't budge an inch from their modest morning lows. They've since weakened a bit further. At 9:05 a.m. EST, the
futures were down 7 to 1424, about a point below fair value and indicating a mixed open.
The bond market isn't looking helpful this morning, extending yesterday's pullback and being bothered by another spike in crude oil. The 30-year Treasury was lately down 26/32 to 100, putting its yield at 6.124%.
Crude futures had lately broken through the $26-a-barrel level, up from $25.70 in early trading.
Though normally the
ne plus ultra
of economic data, the CPI is proving a bit anticlimactic after yesterday's
Federal Open Market Committee
meeting, which resulted in a 25 basis-point rate hike and a move to a neutral bias. It's pretty safe to assume that the Fed has already seen these numbers and factored them into yesterday's decision, for one thing.
Meanwhile, it's about time that the market came to terms with an old friend, the trading range. The phenomenal
Nasdaq Composite Index
notwithstanding, a host of major proxies are challenging the top end right now: The
nosed above its July high yesterday, closing at 1420.03. And it's not just the big-caps that are testing resistance now. The
S&P MidCap 400
finished just two-tenths of a point below its July high, and the
S&P SmallCap 600
are each just 1% and 1.8% off theirs, respectively.
"Yesterday we made new closing highs on both the S&P 500 cash and
December futures," said Charles Farra, president of
Global Trading LLC
. "That's pretty good, and this isn't much of a pullback at all. We're basically making a breakout here and should be able to see the market continue to make its way higher, although we may have a little profit-taking along the way."
On the downside, Farra said he sees strong support in the 1414-to-1418 range. "We spent quite a bit of time trading between those 4 points. I think if we do try to press the thing down today, it's not going below there. We still have the mentality out there of people trying to buy dips."
Starting in Asia overnight, world markets have pretty much followed the same script thus far: Incited by Wall Street's positive reaction to yesterday's Fed hike, stocks erupted to the upside in early action, though profit-taking pared those gains considerably later in the session.
advanced more than 300 points higher in early trading before faltering and falling back into negative territory. A late surge, underpinned by constituent
, helped the benchmark index gain 15.02 to 14,704.48.
Things went better in Tokyo, where, after having been up more than 350 points, the
finally closed up 119.68, or 0.7%, to 18,274.82.
For most of the Tokyo session, the yen stayed close to the level at which it traded in New York late yesterday. It firmed early this morning in London, the dollar sinking from the 106-yen level to 105.1 yen. The greenback was lately quoted at 105.54 yen.
This morning, all the big European indices have fallen into the red after jumping higher at the open. Frankfurt's
was down 42.34 to 5867.18, while the Paris
was off 37.02 to 5153.99. London's
was down 41.3 to 6541.7.
The euro took off like a rocket when trading started in London, moving quickly from $1.031 to the $1.0425 level. Press reports are focusing on comments by
European Central Bank
Chief Economist Otmar Issing, who told Swiss paper
that the ECB shouldn't forget "the influence of the slip in the external value of the euro on price developments" when looking at eurozone inflation.
But the euro's protracted weakness has also made it ripe for a bounce. Also, the yen's simultaneous rally this morning could recast the euro's strength as more a case of dollar weakness. The euro was lately trading at $1.0405.
Wednesday's Wake-Up Watchlist
Mergers, acquisitions and joint ventures
in a stock swap valued at $138.7 million.
, in a deal valued at $250 million.
will sell tickets for the three major airlines it does not already serve,
, and will take a one-time $1.1 billion charge related to the move. United is a unit of
-- while American is a unit of
said it will increase its bid for Germany's
, in what could potentially be the biggest takeover ever,
The Wall Street Journal
reported. The newspaper, citing people familiar with the situation, reported that Vodafone is pondering a bid valued at between 220 euros and 230 euros a share, which would value Mannesmann at as much as 116.7 billion euros, or $120.59 billion. Earlier this week, Vodafone offered to buy Mannesmann; however, Mannesmann said no thanks.
Earnings/revenue reports and previews
(Earnings estimates are from
First Call/Thomson Financial
posted a third-quarter loss of 55 cents a share, narrower than the three-analyst estimate of a 57-cent loss and the year-ago 56-cent loss.
posted first-quarter earnings of 25 cents a share, in line with the 12-analyst estimate but down from the year-ago 42 cents.
posted a third-quarter loss of 14 cents a share, narrower than the 14-analyst estimate of a 17-cent loss and the year-ago 15-cent loss.
posted third-quarter earnings of 33 cents a share, missing the 13-analyst estimate of 38 cents, but up from the year-ago 47-cent loss.
President Kurt Hellstrom warned that problems in increasing handset output made it difficult for the company to meet its forecasted operating margins for 1999. According to
, Hellstrom said during a briefing in London that the output is probably in the low end of its projected range but "within what we consider normal."
Goody's Family Clothing
reported third-quarter earnings of 5 cents a share, in line with the four-analyst estimate but down from the year-ago 10 cents.
posted third-quarter earnings of 63 cents a share, beating the 13-analyst estimate by a penny and the year-ago 40 cents.
Offerings and stock actions
is selling 6.6 million shares at a price of $135 per share in a public offering.
22.3 million-share IPO above-range at $13.41 a share.
Credit Suisse First Boston
analyst Mark Wolfenberger resumed coverage of
with a strong buy rating and a 12-month target price of 75.
First Boston analyst Harry DeMott III, reinstated coverage of
with a buy rating and a 12-month target price of 77.
upped its rating on
to strong buy from neutral.
announced that it has selected
as its preferred Internet filtering provider.
are ratcheting up consumer rebates on some of their most profitable light trucks, the
said it has hired
to explore "strategic alternatives" regarding its
JLK Direct Distribution
unit, including selling it. Also, the company said it will incur special charges of about $25 million to $30 million in the quarter ended Dec. 31. The company plans to close, consolidate or downsize several warehouses, offices and plants and cut 400 to 500 jobs.
said Thomas J. Falk has been named president and chief operating officer and will join the company's board of directors.
The Heard on the Street column in the
takes a look at
defensive maneuvers to protect its merger pact with
American Home Products
and fend off an unfriendly bid from
, reporting that some legal and financial specialists say that some of the moves by Warner may be legal but that does not necessarily mean they are fair to shareholders.