Consumer spending isn't showing any signs of slowing, and so far the stock market isn't showing any signs of caring.
retail sales grew 1.1% in February, just a 10th of a percentage point above the increase expected by economists polled by
Core sales, which exclude autos, came in considerably above consensus. They gained 1% versus the expected 0.6%.
The numbers weren't exactly benign. But they weren't hot enough to put a dent in the stock futures, which have added to their earlier gains. At 9:05 a.m., the
futures were up 59.25 to 4581.75 and pointing toward a good bounce from yesterday's selloff. Meanwhile, the
futures were up 8.1, about 7 points above fair value and indicating some early strength for the broader market as well.
The futures contract has "been inching its way up," said Bob Basel, director of listed trading at
Salomon Smith Barney
. "Yesterday, sitting in this spot, we saw the market going to open down 200 points. The fact that we shook that off is a positive."
"The bigger picture is still the interest-rate environment," Basel said. "Any gains are probably going to be short-lived in the face of what Greenspan's got in store for us going down the road."
hasn't hidden his concern about what he sees as rampant spending, and a much hotter print in today's data could easily have knocked the market on its ear, especially given Greenspan's belief that spending is being at least partially goosed by stock-market gains. The Fed's latest quarterly flow-of-funds report shows stockholdings accounting for about 31.7% of U.S. household wealth, its highest reading ever.
There's little doubt that the
Federal Open Market Committee
will enact the latest in its series of interest-rate hikes when it meets next Tuesday. What the market could have hoped to glean from today's data wasn't so much whether the Fed will raise rates by 50 basis points -- there's been little talk to that effect -- but a sense of how far away the end of the tightening cycle is. Even a hint of a light at the end of the tunnel would help the beaten-down Old Economy sectors catch some long-deferred bids. But that light isn't looking much brighter now than it has been recently.
The bond market was little changed, with the 10-year note off 1/32 to 100 29/32 and yielding 6.374%.
The large European indices were higher in afternoon trading. London's
was up 58.9, or 0.9%, to 6525.8, while Frankfurt's
was up 40.19 to 7734.04. The Paris
was up 19.45 to 6356.38.
The euro was trading at $0.9633.
Headlines in Asia were dominated by news that
will merge to form a behemoth with assets of just under $1 trillion. That would make the resulting banking entity the second largest in Japan, behind the planned combination of
Dai-Ichi Kangyo Bank
Industrial Bank of Japan
, which collectively boast assets of around $1.3 trillion.
can claim a combined $1.25 trillion.
Japanese stocks couldn't put together much of a snapback from yesterday's big declines. The
fell 48.09 points to 19,141.81.
The dollar eased to 105.22 yen in Tokyo trading. It was lately trading at 104.83 yen.
In Hong Kong, the
fell 167.52, or 1.0%, to 16,929.16.
For a look at stocks in the preopen news, see Stocks to Watch, published separately.