Stocks Remain Nonplussed by This Morning's Retail Sales Figures

Sumitomo Bank and Sakura Bank announce the latest huge alliance in Japan's rapidly consolidating banking industry.
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Today's retail sales figures aren't giving stocks any clear direction this morning.

The headline number gained 0.1% overall, above the consensus estimate in the

Reuters

poll for an unchanged figure. The core rate, which excludes auto sales, gained 0.6%, three-tenths of a percentage point above expectations.

Bonds and stock futures moved lower on the news. At 9:03 a.m. EDT, after having been up as much as 7 points earlier in the morning, the

S&P 500

futures were up 3.5, about 2 points below fair value and indicating a bit of program selling at the open. The 30-year Treasury was down 11/32 to 97 20/32, putting its yield at a sizeable 6.302%

"It doesn't look like it's going to prompt anyone to change their mind," said Todd Clark, head of listed trading at

Volpe Brown & Whelan

, of the sales report.

Despite the weakness in the futures, technology is looking considerably stronger this morning after

Apple's

(AAPL) - Get Report

upside report last night, which may have displaced some of the extremely negative sentiment that

Intel's

(INTC) - Get Report

earnings' shortfall brought over the sector.

Still, with the bonds still sagging, traders remain wary. "I'd hesitate to chase a higher open this morning, particularly given the backup in the bond market," he said. "I really thought we'd see some demand around the 6.25% yield level, but that has yet to materialize."

For its part, Intel is back on the acquisition track, setting plans to buy

DSP Communications

(DSP)

for about $1.6 billion in cash.

Meanwhile, the earnings train rolls on. Dow component

General Motors

(GM) - Get Report

is the biggest name on the upside this morning.

In Tokyo, stocks were able to overcome yesterday's extreme selling on Wall Street, thanks to an oversold condition and word of another possible tie-up in Japan's consolidating banking industry. The

Nikkei

rose 25.77 to 17,780, with bank stocks getting a boost from news that

Sumitomo Bank

and

Sakura Bank

were discussing an alliance of some sort, described by the

Nihon Keizai Shimbun

as a "broad alliance certain to lead to a merger" within two years.

Sumitomo and Sakura confirmed that report after the market close. The combined companies are expected to be the world's second-largest bank in term of assets, behind only the planned combination of

Industrial Bank of Japan

,

Dai-Ichi Kangyo Bank

and

Fuji Bank

. Along with the IBJ group and last week's tie-up between

Asahi Bank

and

Tokai Bank

, the Sumitomo-Sakura deal is the third major Japanese banking alliance announced in the past two months.

The dollar moved above the 107-yen level in Tokyo trading before tailing off a bit. The greenback was lately quoted at 106.89 yen.

In Hong Kong, the

Hang Seng

managed to eke out its first gain in the past five days, inching 10.95 higher to close at 12,486.82. The benchmark index had to rally hard in the session's closing minutes, having been knocked into negative territory after an afternoon government land auction drew lower prices than expected.

The big European indices were lower in early afternoon trading. London's

FTSE

was down 4.7 to 6108.7, while the Paris

CAC

was down 9.57 to 4593.28. Frankfurt's

Xetra Dax

was down 29.66 to 5265.77.

Thursday's Wake-Up Watchlist

By

Eileen Kinsella

and

Brian Louis

Staff Reporters

Intel

(INTC) - Get Report

is buying

DSP Communications

(DSP)

for around $1.5 billion in cash. Intel is paying $36 a share for DSP, a beefy premium over DSP's closing price of 28 yesterday.

Apple

(AAPL) - Get Report

after the close posted fourth-quarter earnings of 51 cents a share, beating the downwardly revised

First Call/Thomson Financial

17-analyst estimate of 45 cents, but down from the year-ago 68 cents.

General Motors

(GM) - Get Report

posted third-quarter earnings of $1.33 a share, beating the First Call/Thomson Financial 13-analyst estimate of $1.24.

Earnings/revenue reports and previews

(Earnings estimates are from First Call/Thomson Financial.)

AlliedSignal

(ALD)

posted third-quarter operating earnings of 68 cents a share, in line with the 14-analyst estimate and up from the year-ago 58 cents.

Bausch & Lomb

(BOL)

reported third-quarter earnings of 78 cents a share, well above the 10-analyst estimate of 63 cents and up from the year-ago 64 cents.

Champion International

(CHA) - Get Report

posted third-quarter earnings of 80 cents a share, which excludes a charge of 2 cents, well above the 13-analyst estimate of 63 cents and up from the year-ago 32 cents.

Deluxe

(DLX) - Get Report

posted third-quarter earnings of 65 cents a share, in line with the four-analyst estimate.

First Union

(FTU)

reported third-quarter operating earnings of 84 cents a share, in line with the 24-analyst estimate, but down from the year-ago $1.02.

Greenpoint Financial

(GPT)

posted third-quarter earnings of 63 cents a share, above the 14-analyst estimate of 58 cents, and up from the year-ago 57 cents.

McGraw-Hill

(MHP)

posted third-quarter earnings of 96 cents a share, beating the 10-analyst estimate of 92 cents.

Polaroid

(PRD)

reported third-quarter operating earnings of 50 cents a share, in line with the nine-analyst estimate and up from the year-ago 40 cents.

Schwab

(SCH)

posted third-quarter earnings of 15 cents a share, in line with the 10-analyst estimate and up from the year-ago 12 cents.

Unisys

(UIS) - Get Report

reported third-quarter earnings of 40 cents a share, above the 11-analyst estimate of 36 cents a share, and up from 25 cents a year ago.

USFreightways

(USFC)

reported third-quarter earnings of $1.07 a share, well above the nine-analyst estimate of $1 and up from a year-ago 74 cents.

Westinghouse Air Brake

(WAB) - Get Report

posted third-quarter earnings of 48 cents a share, in line with the five-analyst estimate and up from 42 cents a year ago.

Westpoint Stevens

(WPSN)

reported third-quarter earnings of 67 cents a share, in line with the 11-analyst estimate and up from a year-ago 57 cents. The company said weather problems reduced income by about $700,000, or 1 cent a share.

Miscellany

priceline.com

(PCLN)

filed suit in federal court against

Microsoft

(MSFT) - Get Report

and its

Expedia

unit, claiming that

Expedia.com's

recently introduced hotel service infringes on priceline.com's patent. Separately, Microsoft formed an alliance with

British Telecommunications

(BTY)

to combine resources to develop handheld wireless devices using

Windows CE

as the operating system.

Tyco International

(TYC)

, whose stock fell sharply amid chatter of accounting irregularities yesterday, said rumors of potential accounting problems at the company "are false, unfounded and malicious." The company said it's asking the "

SEC

and the

NYSE

to identify the source of these false rumors and take appropriate action."

(BEARX) - Get Report

Prudent Bear fund manager David Tice, in a report in a recent issue of his

Behind the Numbers

newsletter, expressed concerns about Tyco's accounting. Herb Greenberg delved into the issue in a

column last night.