By Steve Goldstein, MarketWatch
Dec 9, 2005
U.S. stock market futures traded slightly higher Friday, but the outlook
was still uncertain given Intel's lackluster mid-quarter update, a
downgrade of technology giant International Business Machines and further
rises in energy futures contracts weighing on sentiment.
S&P 500 futures were up 2.90 points at 1,267.70 while Nasdaq 100 futures
were up 1.5 points at 1,705.50. Dow futures were last up 16 points at
10,834.
On Thursday, climbing energy futures contracts weighed on the indexes,
with the Dow industrials sliding 55.8 points at 10,755, the Nasdaq
Composite losing 5.6 points at 2,246 and the S&P 500 ended 1.5 points
lower at 1,255. Energy futures climbed again in early morning electronic
trade on Friday, with natural-gas contracts trading up 23.4 cents at
$15.228 per million British thermal units, off a record high of $15.52
reached earlier in the session, and crude-oil futures up 37 cents at
$61.03 a barrel. A U.S. cold snap and declining inventories have reignited
concerns over winter heating-fuel supplies.
Markets on Friday will be looking to a poll of December consumer
sentiment, to be released after the market open, that's expected to climb
to 85.9 from 81.6 in November, according to economists polled by
MarketWatch. Data on wholesale inventories also is due.
February gold futures shot up to more than 20-year highs. The contract was
last up $3.80 at $526.50 an ounce in electronic trading, after reaching a
high of $529.00 earlier in the session. The euro was down 0.2% at $1.1789
ahead of the data, while the dollar was steady on the yen at 120.46 yen.
Of companies in focus, Dow component Intel, the world's largest maker of
computer chips, declined 2.1% to $25.15 in Instinet pre-open trading,
after it forecast sales between $10.4 billion and $10.6 billion, as
compared with the previous range of $10.2 billion to $10.8 billion.
Analysts polled by Thomson First Call estimate that the company will rack
up revenue of $10.6 billion. Ahead of the update, Intel's stock had lost
6.3% since closing at a 4-month high on Dec. 2.
Also in technology, Dow component International Business Machines slipped
1% to $86.60 in Instinet after it was downgraded to neutral from buy at
UBS, with the broker noting the share price is approaching its $100 price
target. "While we believe solid hardware sales and restructuring benefits
should provide significant help through 2006, headwinds from currency and
pension keep us from raising our estimates," it said.
Fellow Dow component Merck & Co. was down 2.5% at $28.95 in Instinet after
the New England Journal of Medicine said that a key study it published on
the safety of the drugmaker's recalled pain reliever Vioxx was flawed.
According to an editorial published on the NEJM's Web site on Thursday, a
Vioxx study it published in 2000 failed to mention three cases of heart
attacks among patients who took Vioxx.
Drugmaker Eli Lilly and Co. said that, after eliminating charges, it
expects fourth-quarter and full-year 2005 adjusted earnings per share will
be at the top of its guidance range of 73 cents and 79 cents and $2.80 to
$2.86, respectively. The stock was up 2.5% at $53.50 in light trading.
Elsewhere, Alltel said it's spinning off its local telecom division into a
new unit that will merge with Valor Communications Group in a $9.1 billion
deal. Alltel holders will get one share of the remaining wireless
division, and 1.05 Valor shares in the tax-free debt.
Viacom Inc. unit Paramount Pictures is planning to make an offer for
DreamWorks, the movie studio that's currently in bid talks with General
Electric Co.'s NBC Universal, The Wall Street Journal reported.
Overseas, the Nikkei 225 climbed despite a downward revision to Japanese
GDP, while European equities were pressured by weakness in technology
stocks such as ASML and Infineon Technologies.
Oil giant BP also was pressured in London after the government of Kuwait
trimmed its stake by selling 185 million shares.
This MarketWatch news update is provided to you courtesy of Thomson
Financial.
This is Thomson Financial's Market Commentary, which is issued three times
daily; Pre-Open ( 9:00 a.m.), Post-Open (10:15 a.m.), and Close (5:00
p.m.). 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@tfn.com or call 646.822.6233. For more information about
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SOURCE Thomson Financial Corporate Group
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