(Updated from 9:30 a.m. EDT)
Stocks shoot higher at the open this morning following some benign economic data, an upgrade on software top dog
Morgan Stanley Dean Witter's
Chuck Phillips and several positive analyst comments on
Chase Manhattan Bank
Chase had plummeted after its plans to acquire U.S. brokerage powerhouse
were confirmed yesterday.
Meanwhile, a slight recovery in the euro is giving a boost to Old Economy stocks today.
Nasdaq Composite Index jumped 68 to 3961 in early trading. The
Dow Jones Industrial Average gained 9 to 11,190. And the
S&P 500 moved 6 higher to 1491.
Futures bucked higher after the 8:30 a.m. release of the
Producer Price Index. The PPI, which measures wholesale prices, fell in August, helped by the drop in energy prices. The cooler PPI reassured the market that the economy is indeed headed for a "soft landing" and that the Fed likely won't tamper with interest rates any more this year. The headline PPI dropped 0.2% in August vs. expectations of a 0.2% increase, while the core number, ex-energy and food, came in at a 0.3% rise vs. and expected 0.2% increase.
retail sales, meanwhile, came in pretty much in-line with expectations. The headline number was at a 0.2% rise, and the core number -- which doesn't include automobiles -- hit 0.3%. Both had been expected to come in at a 0.3% rise. Retail sales measures the pace of consumer spending. And weekly jobless claims rose modestly to 324,000 for the week ending Sept. 9; they were 311,000 the previous week.
"The PPI just tells you that we are achieving a soft landing," said Pat Dwyer, trader at
. "You haven't had the jobless claims jump up. There isn't going to be any big drop-off in the economy.
"The problem is, the market has been a little volatile of late," he said. "It has been such a day-to-day marketplace. One day, things look better -- the next day, a company misses earnings, whether it's an industry thing or company-specific thing. We saw that yesterday with SCI systems.
"But the market will probably hold its gains today because of the weakness in recent days," Dwyer added.
Meanwhile, the upgrade is on Oracle is great news for tech as the company kicks off this quarter's earnings season after today's close. Investors were already feeling optimistic about the report, according to
, which said Wall Street expects Oracle to beat analyst consensus estimates of 13 cents per share by a penny. Oracle jumped 5% higher in early trading.
Finally, a nice -- if meager -- recovery in the euro this morning should help relieve some recent earnings worries. The
European Central Bank
has promised to buy 2.5 billion euros with the interest it earns on foreign-currency reserves. The euro was lately trading up three-quarters of a cent at 87 so far.
A slew of companies have warned that weakness in the euro could take a bite out of earnings recently, the latest being big-Mac food chain
. The company told analysts last night that the sliding euro could slash its year 2000 earnings by up to 7 cents. The stock was tumbling in extended-hours trading.
also fell prey to the euro after
cut its earnings estimates Monday, citing weakness in the European currency, while
was battered by a similar concerns last week.
Also this morning, watch for earnings from retail powerhouses
, which are scheduled to report earnings today.
Elsewhere in the news,
said it would appeal Europe's ruling to block its $115 billion purchase of
The Wall Street Journal
reported. An appeal wouldn't probably get the deal back on its feet, but might help WorldCom complete other deals, the story said.
should get a boost after its announcement last night that it plans to spin off its Internet business. The company was rising in off-hours trading.
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Today's economic reports were uniformly tame. August retail sales were more or less in line with expectations, while the August PPI rose less than expected.
Retail sales rose 0.2% compared to an average forecast of a 0.3% gain. Excluding autos, sales rose 0.3%, in line with expectations. However, July's results were revised upward, making the August results appear somewhat weaker than they actually are.
Meanwhile, the PPI fell 0.2% vs. an average forecast that it would rise by that amount. The core PPI, which excludes food and energy prices, rose 0.1%, a tenth less than expected. The August PPI does not capture the more recent rise in oil prices, which is expected to show up in the September report. Energy prices fell 0.2% in the August PPI, while food prices fell 0.7%, their largest drop in at least a year.
Also today, initial jobless claims rose to 324,000, their highest level since January 1999, from 311,000 the previous week, indicating continued slackening in the labor market and possibly a slowing rate of job growth.
The 10-year Treasury note was rallying on the data, lately up 6/32 at 100 10/32, and yielding 5.706%.
Bond prices rallied nicely yesterday, thanks to another decline in oil prices and growing optimism about the monetary policy outlook.
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European markets were racing higher this morning.
was turning around a weeklong losing streak on gains in tech, media and telecom stocks. It was lately 86.30 higher to 6564.50.
Across the channel, the
in Paris was up 52.14 to 6621.03, and the
in Frankfurt was 51.80 higher to 7058.06.
The embattled euro was lately trading higher at $0.8636.
Asian markets were mixed overnight.
Traders were busy closing out positions before a long weekend in Tokyo, but the mood was upbeat as the market started to focus on the expected jump in fiscal first-half profits of many large technology firms.
index rose 22.76 to close at 16,213.28,
The greenback edged higher against the yen to buy 107.13. in Tokyo trading. The dollar was lately trading at 107.10 yen.
index edged 234.35 points lower, or 1.4%, to close at 16,395.43. Action was largely profit-taking in property shares.
was flat at HK$96.75 ($12.41), while
New World Development
slid 0.15, or 1.2%, to 12.05.
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