Thursday: Stocks Sputter Before PPI Release

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By John J. Edwards III
Staff Reporter

It's almost here.

The next batch of amazingly crucial economic data, on the

Producer Price Index

and retail sales, come out tomorrow morning. In anticipation, the stock and bond markets have been moving in fits and starts for the last couple of sessions, with hardly anyone willing to commit money one way or the other without another clue to the

Federal Reserve's

likely policy moves.

"They really want to see tomorrow's numbers and they want to see next week's

Consumer Price Index," one trader said. "Moderate numbers in both of those would give a little more strength to the bull case that maybe

the Fed won't raise rates in May."

Ahead of those numbers, moderate or not, the

Dow Jones Industrial Average

bounced around yesterday's close before a late selloff left it down 23.79 at 6540.05. Nervousness about tech-industry earnings reports sent the

Nasdaq Composite Index

down 13.66 to 1235.77. The bellwether 30-year Treasury bond rebounded from early weakness to end flat at 7.10%.

Investors' romance with mutual funds seems a bit on the wane, with the

Investment Company Institute

estimating March net new fund inflow of just $8.5 billion. That would be the lowest figure since July 1996 -- the midst of the most recent serious downturn in stocks before this one -- when funds took in $5.75 billion. Actual February inflow was $20.62 billion.

Sears

(S) - Get Report

stood out on a day filled with other retailers reporting March same-store sales. The company admitted "flawed legal judgment" in the handling of certain consumer debt reaffirmations, which were not filed as required under bankruptcy laws. Sears saw the softer side of its stock price, losing 3 5/8 to 47 1/4.

Among other retailers reporting same-store sales,

Kmart

(KM)

gained 1/8 to 12 5/8 on a sales increase of 12.7%,

Wal-Mart

(WMT) - Get Report

slipped 1/4 to 28 3/8 on a 7.2% sales increase and

Sunglass Hut

(RAYS)

brightened 1 1/4 to 7 13/16 on a slight sales increase of 0.6%.

Compaq

(CPQ)

said it would buy remote-access company

Microcom

(MNPI)

for about $280 million in cash. Compaq lost 2 3/4 to 75 3/8 and Microcom shot up 5 5/8 to 15 15/16.

Supermarket chain

Safeway

(SWY)

sold off 4 1/8 to 43 7/8 on concerns about labor strife in its 73 Alberta, Canada, stores. The company reported first-quarter earnings of 51 cents per share, beating the

First Call

expectation of 50 cents and the year-ago 40 cents.

SPX

(SPW)

bounced 6 5/8 to 52 1/2 after the company announced a Dutch-auction repurchase of 2.7 million shares at $48 to $56 each.

Atmel

(ATML)

reported first-quarter earnings of 38 cents per share, a penny ahead of the First Call view. The company made 45 cents a year earlier.

Primark

(PMK)

said its first-quarter earnings would be about 15 cents per share, rather than the 25 cents First Call had expected. Its shares were pummeled, off 5 1/4 to 18 3/4.

Golf legend

Jack Nicklaus

had to endure a distraction from the

Masters

tournament as

Golden Bear Golf

(JACK) - Get Report

, largely owned by Nicklaus' family, said it would take a charge of 5 cents per share for severance expenses. The company also said it would suffer some negative short-term pressure on its results because of changes at two units. Golden Bear retreated 2 to 10 1/4.

Veeco

(VECO) - Get Report

said it plans to take a second-quarter charge of 35 cents to 45 cents per share, related to its acquisition of some assets of

Materials Research

, a

Sony

(SNE) - Get Report

and

First USA

(FUS)

, which plan to merge in a $6.6 billion deal announced in January, agreed to expand their credit-card processing pact with

First Data

(FDC) - Get Report

. First Data rose 1 1/4 to 34 on the news, while BancOne slipped 3/8 to 41 1/4 and First USA declined 3/8 to 46 1/4.

Informix

(IFMX)

fell 3/4 to 7 5/16 on a downgrade at Merrill Lynch. The firm cut its near-term rating to neutral from accumulate and lowered its long-term rating to accumulate from buy.

Carson

(CI) - Get Report

, a maker of black hair care products, said it expects its first-quarter earnings to be hurt by high advertising costs and infrastructure investments. Despite the company's announcement that it acquired the Let's Jam product line, expected to be immediately accretive to earnings, its shares plunged 2 3/4 to 8 5/8.