8:41 AM ET Jan 13, 2006
LONDON (MarketWatch) -- Stock futures eased Friday, but were off their worst
levels as favorable economic data helped ease investor concerns over warnings
from Lucent Technologies and Tyco International.
S&P 500 futures dipped 0.90 of a point to 1,292.7 and Nasdaq 100 futures were
off 3.50 points at 1,760.50. Dow industrials futures slipped 3 points to
11,009.
On Thursday, the Dow fell 81 points for its first substantial loss of 2006 (it
lost less than a point on Tuesday), amid tension about the resumption of
Iran's nuclear research program and downgrades for Dow members Coca-Cola and
J.P. Morgan Chase .
The Nasdaq Composite dropped 14.67 points at 2,316 and the S&P 500 eased 8.12
points to 1,286. .
Retails sales rose a seasonally adjusted 0.7% in December, the Commerce
Department said, and increased 0.2% excluding the gain in auto sales. Taking
revisions for October and November sales into account, retail sales were
slightly stronger than the 0.9% gain expected by economists.
U.S. prices of raw materials and other producers' inputs jumped 0.9% in
December, the Labor Department reported Friday. This is the largest gain since
September. Excluding food and energy costs, the core PPI rose a modest 0.1%.
Economists were expecting the December PPI to rise 0.5% and the core rate to
rise 0.2%.
Among companies in focus, Lucent Technologies was knocked 7% lower to $2.52
in Instinet pre-open trading after lowering its revenue outlook for fiscal
2006, citing expectations for a sequential decline in revenue in the first
quarter due to lower sales in the U.S. and China.
Tyco International Ltd. slumped 7.8% to $27.95 in Instinet after the company
lowered its first-quarter forecast for earnings from continuing operations.
The company's board also approved a plan to separate the company's current
lineup of businesses into three separate entities, each of which will be
publicly traded. One-time transaction costs are expected to total about $1
billion.
Dow member General Motors was a bright spot, rising 1.6% to $21.30 after the
automaker said it expected to see improved results in 2006, and further
progress in 2007. The company said it was still exploring a sale of a
controlling stake in its General Motors Acceptance Corp. finance operations.
Separately, GMAC said it would take a fourth-quarter non-cash charge of $450
million for goodwill impairment. The charge relates to GMAC's 1999 acquisition
of Bank of New York's commercial finance business.
American International Group Inc. is expected to pay more than $1 billion to
settle civil-fraud investigations by state and federal authorities, according
to a media report Friday.
And after Thursday's closing bell, International Business Machines Corp. said
the Securities and Exchange Commission has launched a formal probe of how the
technology giant disclosed earnings and expenses for stock options.
In M&A news, Boston Scientific Corp. increased its bid for Guidant Corp. to
$73 a share in cash and stock.
Guidant previously said it had agreed to be acquired by Johnson & Johnson in
a cash-and-stock deal worth $68.06 a share. Boston Scientific's previous bid
was $72 a share. Boston Scientific said its offer will expire Friday.
Elsewhere, chip equipment makers Applied Materials and KLA-Tencor slipped
1.3% and 1.2%, respectively, after South Korean electronics giant Samsung's
projection for 2006 capital spending was below forecasts.
Outside of equities, front-month crude shed 59 cents at $63.35 a barrel in
electronic trade, as Iran concerns continued to unsettle markets.
The dollar eased 0.2% vs. the euro to $1.2070.
European markets were lower on Friday, stung by broker downgrades and falling
energy stocks. The Nikkei ended flat and Asian shares ended mixed.
Turning to broker action Deutsche Bank downgraded Advanced Micro Devices Inc.
to sell from hold, saying it expects the fourth quarter of 2005 to be the last
quarter of strong momentum as the semiconductor firm faces increased
competition.
This MarketWatch news update is provided to you courtesy of Thomson
Financial. The information herein is believed to be true and accurate. We take
no responsibility for inaccurate information and reserve the right to update
our reports. If you have any questions please e-mail James Sang at
james.sang@thomson.com or call 646.822.6233. For more information about
Thomson Financial visit us at http://www.thomson.com/financial.
SOURCE Thomson Financial Corporate Group
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