A weaker-than-expected July
Producer Price Index
is putting a shine on stocks this morning.
The PPI gained 0.2% in July, against a forecast of 0.3% in the
poll. The core rate, which excludes the food and energy sectors, was flat. Economists had expected a gain of 0.1%.
Treasuries and stock futures jumped on the report and its suggestion that the
may not tighten beyond the expected 25-basis-point hike at its Aug. 24 meeting.
The question on everybody's mind, though, is whether today's opening rally will hold.
"At first glance, it looks very good," said Paul Rich, a trader at
. "Anything at this point will help this market. I kind of think we will sustain it."
Rich said he remains skeptical as to whether Tuesday's selloff might have signaled a bottom, though. "I haven't seen a lot of independent selling -- the selling has been very orderly, not panicky, so I don't see it bottoming yet," he said.
"But a couple of anti-inflationary reports like this, and we'll be in great shape," Rich continued. "We'll see this thing take off like a rocket."
At 9 a.m., the
futures were up 11.3, putting them nearly 13 points above fair value and indicating a strong open. The 30-year Treasury was lately up 24/32 to 99 28/32, putting the yield at 6.13%.
While looking westward to today's PPI, Tokyo markets were greeted by an upward revision of Japan's January-March GDP growth rate, to 2% from the initial 1.9%. The news wasn't totally unexpected,
Economic Planning Agency
boss Taichi Sakaiya having said Tuesday that the revision could go either up or down. The report sent the yen higher against the greenback, muting any buying the revised data might have inspired, as investors sold export-oriented stocks. The Nikkei gained 12.20 to 17,435.17.
Bank of Japan
said it will stick to the easy-money policy it formulated on Feb. 12, which means trying to keep the unsecured overnight call rate as low as possible. That's meant a rate of about 0.03% since early April.
For the first time in a while, Sino-Taiwan tensions and worries over a possible devaluation of the yuan are not the reasons being given for the latest decline in Hong Kong stocks. The
fell 171.57, or 1.4%, to 12,608.18 after
Morgan Stanley Capital International
said it would rebalance its benchmark international indices. If the rebalancing happened today, Hong Kong's weighting would fall to about 26% from the current 33%, according to an MSCI executive director, John Fildes.
After opening flat to lower, the big European bourses were running up on the friendly PPI number. London's
was up 29.3 to 6182.6, while the Paris
was up 44.67, or 1%, to 4410.33. Frankfurt's
was up 64.25, or 1.3%, to 5191.68.
Friday's Wake-Up Watchlist
Mergers, acquisitions and joint ventures
will sell its
magazine division, which includes
Women's Wear Daily
magazines, as well as many trade publications,
The New York Times
reported, citing execs involved in the deal. There are two bidders for the titles:
Conde Nast Publications
. S.I. Newhouse Jr., the chairman of Conde Nast, has offered $650 million for the Fairchild group, the
reported, citing the Disney exec.
Falcon Building Products
is selling its air power tools division,
DeVilbiss Air Power
for $460 million.
, a privately held developer of Internet access routers for wide-area networks, for about $246 million in stock.
Two top execs of a proposed three-way aluminum merger refused to rule out a potential counterbid for
, for which
bid earlier this week,
reported. The execs were from Canada's
. Alcan, Pechiney and
earlier this week set a three-way merger.
have suspended plans for a television network aimed at women, only two months after announcing an ambitious strategy to combine their cable assets and women's content,
The Wall Street Journal
Earnings/revenue reports and previews
The world's largest household appliance maker, Sweden's
, forecast higher 1999 profits.
to buy from attractive.
attractive from neutral.
to buy from outperform.
to near-term neutral from near-term accumulate and the firm downgraded it to long-term accumulate from long-term buy. After the close Stewart warned it expects to earn 25 cents to 27 cents a share in the third quarter, lower than the current three-analyst estimate of 29 cents a share; and 17 to 19 cents a share in the fourth quarter, below the current nine-analyst estimate of 25 cents a share.
to attractive from buy.
stock may have been unfairly pounded by sky-high expectations for toy sales related to
Star Wars Episode I -- The Phantom Menace
, and now some think the stock is a bargain, the Heard on the Street column in the
said it's cutting 2,500 jobs worldwide, about 1,100 more than it planned when it unveiled a cost-savings program late last year.
The Inside Wall Street column in
, penned this week by Jeffrey M. Laderman, offers up a bullish article on
. Elsewhere in the column, William S. Brennan of
Pacific Growth Equities
U.S. Plastic Lumber
and has a target on the stock of 16 within the next 12 months. It closed yesterday at 8.
In another item in Inside Wall Street, Andrew Stephens, portfolio manager of the
Artisan Mid Cap Fund
, the dominant maker of bar-code printers, will reach 60 to 65 in the second half of next year. It closed yesterday at 46 7/8.