Stocks Again Look to Push Record Levels

Futures are strong as talk of auto linkups pushes stocks in Europe.
Author:
Publish date:

Stocks are set to head higher at the opening bell following positive announcements from a wide variety of companies. At 9 a.m. EST, the

S&P

futures were up 4.2 points, about 5 points above fair value.

"Obviously, AOL's addition to the S&P will continue to keep the flames fueled in cyberland," said Bill Meehan, chief market analyst at

Cantor Fitzgerald

. "Also, what could bode well is for the

Dow

to play catch-up" to other indices.

The only question is whether major indices such as the S&P and

Nasdaq Composite Index

can sustain their near-record levels heading into next year. Decliners outpaced advancers yesterday on the S&P. "Liquidity will drive this higher into January," Meehan said.

Intel

(INTC) - Get Report

should move higher on news that

Merrill Lynch

analyst Tom Kurlak upgraded his near- and long-term rating on the stock to accumulate from neutral. In premarket trading Intel was up 6 9/16 to 125 9/16.

Shares of

America Online

(AOL)

are expected to rise as a result of their addition to the S&P 500 index, replacing

Venator

(Z) - Get Report

. The change will take place at the end of trading Dec. 31, but index managers are likely to pour into the stock today. AOL was the most actively traded stock on the NYSE yesterday, adding 21 to close at 138.

Auto stocks, led by

Ford

(F) - Get Report

, look to open strongly on rumors that the car maker will set a cooperative effort with

Volvo

(VOLVY)

or another European manufacturer.

Asian markets were mostly down overnight. The

Nikkei

was closed for a holiday, but that didn't deter

Standard & Poor's

from cutting ratings on six large banks, including

Daiwa

and

Sumitomo

. The

Hang Seng

lost 163.81, or 1.6%, in a quiet day.

European stocks rose, led by a 2.5% gain in Germany's

Dax

on talk of potential auto deals. The Dax added 120 to 4945. Paris'

CAC

index rose 36, or 1%, to 3857 despite economic reports indicating that France's economy is slowing more than expected. Business confidence fell to an 18-month low, according to published reports, and consumer spending rose just 0.1% during November. In Britain, the

FTSE

added 34 to 5877.

The 30-year Treasury bond was down 9/32 to trade at 101 18/32, yielding 5.15%. Bonds crumbled in the last two trading sessions, following the downturn of Japanese bonds.

    Compaq

    (CPQ)

    will dissolve its standalone networking division by Jan. 1,

    The Wall Street Journal

    reported.

    Ingram Micro

    (IM)

    said it expects fourth-quarter earnings to fall short of the 12-analyst

    First Call

    estimate of 56 cents a share. The company expects to earn between 48 and 50 cents a share.

    Reebok

    (RBK)

    shares will be under pressure this morning after the company set a fourth-quarter charge that will cut earnings by as much as $10 million, or 18 cents a share.

    Hooper Holmes

    (HH)

    declared a 2-for-1 stock split and said it expects to meet 1998 earnings expectations. Shares rose 3/16 yesterday to close at 26 15/16.

    Exabyte

    (EXBT)

    forecast a fourth-quarter loss of 18 to 24 cents per share and a 1998 loss of 8 to 13 cents a share due to sluggish sales.

    Lockheed Martin

    (LMT) - Get Report

    said it expects fourth-quarter earnings to fall by as much as 10% on a diluted basis.

    Diamond Offshore

    (DO) - Get Report

    said it will end a drilling pact with the

    BP Exploration

    unit of

    British Petroleum

    (BP) - Get Report

    due to technical problems.