Retail Sales Look Good
By
Justin Lahart
Staff Reporter
May was cold, and while that wasn't good news for people hoping to get an early tan, it's great news for Wall Street.
May Retail Sales
showed a 0.1% decline. Consensus median estimates had been for an increase of 0.1%.
"It looks higher," says one trader of the market post sales report. "The bonds are up big."
The weak retail sales numbers aren't the only thing giving the bonds a boost. Mr. Yen is at it again. The dollar is higher after
Japanese Finance Minister Eisuke Sakakibara
said the
Prime Minister Hashimoto
told him to act on the yen's sharp ascent. The dollar is up nearly three yen to 114.02. The 30-year Treasury bond is up 28/32 at 98 4/32, pushing the yield down to 6.77%.
The
S&P 500
futures are up 4.65. Last night they closed at fair value, so that puts them well into buy territory and signals a sharply higher open.
IBM
(IBM) - Get Report
CFO Richard Thoman is leaving Big Blue to become the COO of
Xerox
(XRX) - Get Report
. No more working in Sweet Lou's shadow. Traders say that IBM will be under pressure today, as Thoman was a pretty popular guy with investors.
Other tech stocks could suffer on word that
Goldman Sachs
lowered its earnings estimates for
Intel
(INTC) - Get Report
. Wall Street may read overall weakness in the PC sector into the revised numbers, according to traders. Goldman cut
Cyrix
(CYRX) - Get Report
from its recommended list.
German-based
Thyssen
announced that it will acquire
Giddings & Lewis
(GIDL)
in an all-cash transaction for $675 million, or $21 a share.
Harnischfeger's
offer of $19 a share for the Fond du Lac machine tools maker had been repeatedly spurned, with Giddings unwilling to remove its poison-pill clause.
Polo Ralph Lauren
(RL:NYSE), the latest celebrity IPO, was priced at $26 a share last night. It could run up to as high as 35, according to traders.
Tele-Save's
(TALK)
could be under pressure on a report from the
San Francisco Chronicle's
Herb Greenberg on concerns over the company's accounting.
Yellow
(YELL)
, a less-than truckload transportation company, says that it expects to meet or beat
First Call
consensus estimates of 25 cents a share for the second quarter.
Japan stocks moved higher with exporters, which book a lot of dollar profits, benefiting from the weaker yen.
Sony
,
Canon
,
Toyota
and
Mazda
were among the global blue-chips posting gains. Banks were also higher. The
Nikkei
closed up 274.53 at 20,564.56.
Hong Kong stocks were sharply lower on news that
Merrill Lynch
and
Credit Lyonnais
recommended that clients reduce weightings in the territory's market. Red-chips are under continued pressure, with the
World Bank's
resident economist in Beijing weighing in with the latest warning on the issues yesterday. The
China Enterprises Index
, which tracks mainland-based companies, fell 63.22, or 6.3%, to close at 938.32. The
Hang Seng
fell 497.18 to close at 13,924.34.
The Street
pointed out the problems highflying Hong Kong stocks could face ahead of the handover in a recent
article.
Germany's cars and chemicals, which benefit from the stronger dollar, are among the stocks that moved higher in Frankfurt today. The
DAX
closed up 30.56 at 3707.99.
London stocks took a hop on the U.S. retail sales figures. The
FTSE
is up 19.90 at 4744.70.
