Wall Street Looks for a Sideways Day
While its European cousins bask in the glory of their central bank's
rate cut yesterday, Wall Street looks set to begin the day in a humbler fashion.
That's only right -- unlike their continental counterparts, U.S. investors got a chance to react to the
European Central Bank's
move, which came after the European close. Now, with all the major averages at new highs, the debate on Wall Street is whether the best thing to do is take profits going into the weekend or to keep on buying in expectations that the earnings season kickoff next week will go well. That sets the market up for a sideways-looking open.
"I think you'll have a sort of neutral day," said Doug Myers, vice president of equity trading at
Interstate/Johnson Lane
. The downside looks pretty limited to Myers, but after yesterday's move he doesn't think "there will be a big-time rally -- that would be expecting too much."
At 9 a.m. EDT, the
S&P 500
futures were off 2.8, fractionally below fair value and indicating a basically flat open.
Internet stocks may fare better than the broader market on the back of
theglobe.com's
(TGLO)
split announcement
last night. It seems odd for a company to split at 59, but investors apparently don't care. theglobe.com was up 18 5/8, or 31.9%, to 77 in preopening trade.
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The March
Producer Price Index
came in somewhat weaker than expected. The headline PPI gained 0.2%, while the core, which excludes the volatile food and energy sectors, was unchanged. Economists had expected the headline to rise 0.3% due to the recent increase in oil prices. The 30-year Treasury bond was up 13/32 to 97 17/32, dropping the yield to 5.42%.
Tokyo stocks closed the week with nary a day of declines, but after a big run-up, today's gains ended up being rather muted. After adding as much as 319 points before profit-taking kicked in, the
Nikkei
finished up 8.94 to 16,855.63. Meanwhile, over-the-counter stocks are still on a tear. The
Jasdaq
closed on a high of 48.47, up 1.74, or 3.7%. For the year, it's added 72%.
The ECB rate cut and Wall Street's good performance yesterday helped get things going in Hong Kong. With foreign buyers in the market in force, the
Hang Seng
gained 186.26, or 1.6%, to 11,914.10.
European markets were running higher on the back of yesterday's rate cut. In Frankfurt, the
Dax
was up 71.47, or 1.4%, to 5140.16. In Paris, the
CAC
was up 48.04, or 1.1%, to. Meanwhile, London's
FTSE
was up 12.1 to 6450.
Friday's Wake-Up Watchlist
By
Brian Louis
Staff Reporter
IBM
(IBM) - Get International Business Machines Corporation Report
plans in May to set up a new Web site to sell its entire line of personal computer products directly to small businesses and consumers, according to a
Business Week e-biz
report.
Genentech
(GNE) - Get Genie Energy Ltd. Class B Report
said it is in talks with the
U.S. Attorney for the Northern District of California
in an effort to resolve the government's investigation into Genentech's promotion of human growth hormone during the late 1980s and early 1990s. Genentech is discussing a settlement in which it would pay a criminal fine and restitution of $50 million.
In other news:
- Hardinge (HDNG) , a machine tools maker, expects first-quarter net income to be between 21 cents a share and 23 cents. The
First Call two-analyst estimate calls for earnings of 40 cents. The company said the early weeks of the quarter saw very weak demand, with improvement as the quarter progressed.
Some analysts and investors are suggesting that
J.C. Penney (JCP) - Get J. C. Penney Company, Inc. Report, the nation's fifth-largest retailer, should split into two or even three pieces, the Heard on the Street column in the
Journal reports.
Monsanto (MTC) - Get MMTec, Inc. Report said it is selling
NSC Technologies, a pharmaceutical intermediates and bulk active chemicals business, to
Great Lakes Chemical (GLK) for $125 million.
The Inside Wall Street column in
Business Week reports
e.spire Communications (ESPI) has been the subject of takeover talk. Frank Murphy of
First Union Capital Markets says he doesn't think a deal is imminent, but the stock's current valuation has been discounted so much that "its potential as a takeover target has become justifiable," the column quotes him as saying.
Topping the list of concerns rumored to be interested in buying e.spire is
Qwest (QWST) , the column says.
AT&T (T) - Get AT&T Inc. Report,
MCI WorldCom (WCOM) ,
British Telecom (BTY) and
Cable & Wireless (CWP) could also be looking at e.spire, Murphy says, according to the column. An e.spire spokeswoman declined comment, the column says.
Big Flower Holdings (BGF) and
Kushner-Locke (KLOC) both garner positive mention in Inside Wall Street this week.
