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'Sigh of Relief' After May Data Has Stocks Heading Higher

The PPI arrives in line with expectations, and retail sales aren't too strong.

Despite a bit more strength in May

retail sales

than economists expected, stocks look like they'll run higher at the open.

Retail sales rose 1%, beating expectations of a 0.8% gain. Excluding automobiles, sales were up 0.5%, as expected. The other report the market was watching, the

Producer Price Index

, gained 0.2%. It rose 0.1% excluding the volatile food and energy sectors, right in line with forecasts.

The market's ability to move higher on the reports can be ascribed to a couple of things, said Todd Clark, head of listed trading at

Charles Schwab

. First, there were fears in the bond market that sales would come in much stronger than they did, and second, for many investors the strength in Japanese

gross domestic product

iced a rate hike at the

Federal Open Market Committee

meeting at the end of the month. Now the focus is on if the


will boost rates by more than a quarter-point, of if the Fed is perhaps embarking on a series of tightenings. Today's numbers don't better the odds in either case.

"We got a sigh of relief here," said Clark. "Yesterday they were bracing for the worst."

At 9:15 a.m. EDT, the

S&P 500

TheStreet Recommends

futures were up 2, indicating a positive open. In volatile trading the 30-year Treasury was off 1/32 to 88 27/32, putting the yield at 6.07%.

Japanese stocks continued to move higher on yesterday's strong gross domestic product figures. The


added 95.93 to 17,198.55.

Hong Kong took back yesterday's loss and then some. The

Hang Seng

rose 153.55, or 1.2%, to 12,992.76.

European bourses remained in positive territory. In Frankfurt, the


was up 55.04, or 1.1%, to 5261.51. In Paris, the


was up 11.55 to 4392.54. And in London, the


was up 33.8 to 6437.2

Friday's Wake-Up Watchlist


Brian Louis

Staff Reporter

  • Boeing (BA) - Get Boeing Company Report said it will sell its Boeing Information Services subsidiary to Science Applications International. Boeing IS, which provides the federal government with information-and-systems integration services, employs about 1,200 people, with headquarters in Vienna, Va.
  • CMGI (CMGI) reported a third-quarter operating loss of 29 cents a share and a net loss of 30 cents. The First Call seven-analyst forecast called for a quarterly loss of 13 cents a share, reversing year-ago earnings of 9 cents.
  • Discount Auto Parts (DAP) said fourth-quarter sales rose 15% from a year ago to a record $140.8 million. Comparable-store sales, however, were flat.
  • Federal Signal (FSS) - Get Federal Signal Corporation Report, a safety and signaling products and emergency vehicle maker, warned it expects second-quarter earnings of around 30 cents a share, well below First Call's four-analyst estimate of 38 cents a share and about 14% below the year-ago period's earnings.
  • Ford (F) - Get Ford Motor Company Report said James D. Donaldson, head of its European operations, has been elected group vice president in charge of its global business development office, effective July 1. He'll be succeeded by Nick Scheele, who was senior vice president for marketing, sales and service in Ford's European operations.
  • Key Energy Services (KEG) - Get Key Energy Services, Inc. Report named Tom Grundman financial chief.
  • Lockheed Martin's (LMT) - Get Lockheed Martin Corporation (LMT) Report recent financial difficulties have created new problems in its struggle to acquire Comsat (CQ) , with Comsat officials mulling whether to renegotiate terms or even possibly reconsider the deal altogether, The Wall Street Journal reported. On Wednesday, Lockheed issued an earnings warning for the second quarter, full-year 1999 and full-year 2000. Meanwhile, the Journal reported that Lockheed and France's Aerospatiale Matra are in talks about developing military surveillance and refueling aircraft, the Journal reported, citing execs familiar with the discussions.
  • National Semiconductor (NSM) reported a fourth-quarter operating loss of 24 cents a share, on target with the 19-analyst First Call forecast and narrower than the year-ago loss of 42 cents.
  • In this week's Inside Wall Street column by Gene G. Marcial in Business Week, Nancy Tengler, chief investment officer at Global Alliance Value Investors, has bullish things to say about American Home Products (AHP) . She is quoted as saying AHP is ripe for either a takeover "by the likes of pharmaceutical giant Merck (MRK) - Get Merck & Co., Inc. (MRK) Report or for a merger of equals with Warner-Lambert (WLA) ." The column reports that Tengler thinks AHP already is in talks with suitors. Elsewhere, the column reports that CompUSA (CPU) could reinvent itself as a technology superstore or could be acquired by one of the big office-supply retailers. The column reports that one unnamed New York money manager thinks Staples (SPLS) will make a move to acquire CompUSA. The column also offers up a bullish piece on SPX (SPW) .