Stocks are going to give back a few of yesterday's points this morning.
"We're under pressure already," said Bill Meehan, chief market analyst at
. "It's not going to be a pretty picture, I don't think."
On some level, an opening dip would be purely reactionary, a signal of a range-bound market. But stocks will also have to work this morning against the weight of a bond market that seems to be having some second thoughts about yesterday's full-point rally, which puzzled some in light of the hot, prices-paid component of the
Chicago Purchasing Managers' Index
. The Chicago PMI rose to 71 from the previous month's 63.8, the first time it exceeded 70 since June 1995.
At 9:05 a.m. EDT, the 30-year Treasury was lately down 25/32 to 100 8/32, its yield rising to 6.106%. After sitting only fractionally lower for much of the morning, the
futures were lately taking the hint, down 9.7, about 7 points below fair value and indicating a negative open. The dollar had also recently lost nearly a half-point against the yen, sitting at 105.15 yen.
Today, with the Chicago PMI in mind and only three days until the
Federal Open Market Committee
meeting, the market will be looking anxiously toward the prices-paid element of today's
National Association of Purchasing Management
survey. In terms of the headline number, economists polled by
expect a NAPM index of 54.3 for September, up from last month's 54.2. Any reading above 50 signifies expansion in the manufacturing segment.
"The NAPM's going to call the tune today," Meehan said.
Elsewhere in the world of economic data, the
reported that personal consumption grew 0.9% in August, two-tenths of a percentage point higher than expected and up from last month's 0.4% clip. The consumption gain outstripped personal income, which rose 0.5%, a tenth of a point higher than forecast and up from July's 0.2% rate.
Hong Kong markets were closed for China's
holiday. But stocks were active and buoyant in Tokyo, with the
rising 107.1, or 0.6%, to 17,712.56, amid expectations that the
survey of business sentiment, which the
Bank of Japan
will release Monday, will not disappoint. Economists polled by the
Nihon Keizai Shimbun
expect the tankan to climb to a negative 22 reading from the June survey's negative 37.
The imminent tankan wasn't the only thing helping sentiment in Tokyo. The government reported that the unemployment rate unexpectedly fell to 4.7% in September from 4.9% the month before. And the
Nuclear Safety Commission
has told reporters that the nuclear reaction at a uranium-fuel processing plant yesterday in the Ibaraki Prefecture is under control. A total of 49 people are reported to have suffered radiation exposure so far.
Tankan optimism, equity interest, better-than-expected employment data and lessening fears of nuclear disaster -- everything was helping the yen regain some ground against the dollar, which Tokyo trading took below the 105.4 yen level, from a New York close of 106.3 yen.
Market participants are still watching closely for a possible BOJ policy relaxation. Despite pulling out some extra liquidity, added yesterday to accommodate the end of the fiscal half-year, the central bank still left a larger-than-usual 1.9 trillion-yen surplus in the money market today. But that's being seen as more of a gradual draining than a real policy shift.
Meanwhile, Ecuador made financial history last night by missing a $44.5 million interest payment on its Brady bonds, making it the first country ever to default on such a financial instrument.
Meanwhile, the euro continues its recent climb against the dollar, propped up today by a strong purchasing managers' survey for manufacturing activity and prices in the eurozone. The September eurozone purchasing managers' index rose to 54.7 from last month's 53.2 reading. The euro was lately quoted at $1.0753, its highest level since early August.
The big eurozone indices were lower early in the afternoon session, spurred by U.S. weakness and possibly by the inflationary implications of the PMI's prices-paid element, which rose to 63.2 from 57.6. Frankfurt's
was down 59.05, or 1.2%, to 5090.78, while the Paris
was off 58.50, or 1.3%, to 4532.92. London's
was down 29.9 to 5999.9.
Friday's Wake-Up Watchlist
has decided to pursue the sale of its worldwide Professional Products business and its noncore Latin American brands. Revlon said it is negotiating or in active talks with potential purchasers and anticipates concluding the sales by the end of the first quarter of next year for gross proceeds of more than $500 million. Revlon also said it has decided not to sell its remaining cosmetics, personal care, fragrances and skin treatment businesses.
Mergers, Acquisitions and Joint Ventures
said it was considering strategic options relating to its 58% interest in
. In response to rumors that
had been pinned as a possible buyer, AT&T said it has not forged any definitive deals.
for $24 a share, based on about 12.8 million shares outstanding, or $307 million, Kellogg said. Kellogg expects to complete the deal by year-end. Worthington manufactures and markets "vegetarian and other healthful foods."
Earnings/Revenue Reports and Previews
(Earnings estimates are from
First Call/Thomson Financial
said it expects first-quarter earnings per share to between 29 cents and 31 cents, above the current three-analyst estimate of 24 cents a share.
Service Corp. International
lowered its third-quarter earnings estimate to 10 cents to 13 cents a diluted share. The current eight-analyst estimate is for earnings of 22 cents a share.
Offerings and Stock Actions
said it planned to register to sell 13 million common shares.
said it will buy back 4.5 million class A shares in a Dutch auction. The company said it would also buy back 100,000 shares in a self-tender.
started coverage of
with an attractive rating.
PaineWebber initiated coverage of
with a neutral rating.
Morgan Stanley Dean Witter
to strong buy from outperform.
plans to spin off its auto-parts unit --
Visteon Automotive Systems
-- to shareholders and give wage and job guarantees to the division's factory workers,
The New York Times
reported, citing people close to the matter. The
reported that Ford pondered selling the unit to either
Delphi Automotive Systems
, but labor issues along with tax considerations persuaded Ford to spin off the unit. Delphi was spun off in May from
Competitive local-phone companies have caught the attention of buyout firms, including
Kohlberg Kravis Roberts
, which have already invested a total of $1.7 billion between them, the Heard on the Street column in
The Wall Street Journal
says. Small carriers that have a shot at grabbing some of the $100 billion local-phone business from the Bell telephone companies have seen an influx of cash, including
In the Inside Wall Street column in
, penned by Gene Marcial, one item says some analysts and big investors think that
is going toward 100. It closed yesterday 74 1/16.
The column also offers up a bullish item on
, a household appliances maker, which Peter Schaeffer, an analyst at
Donaldson Lufkin & Jenrette
, thinks will hit 40 in a year, and Doug Raborn, a money manager who heads his own investment shop
Raborn & Co.
, thinks the stock could go to 45.
Separately, Salton said it withdrew its 4.6 million share proposed stock offering because it doesn't think the company's future growth and current profitability are currently reflected in its stock price.
Also in the column,
Ballantyne of Omaha
is mentioned as a possible takeover target. Analyst Michael Legg of
, is cited in the column as saying that
may acquire Ballantyne outright or acquire the 26% stake in the company that