By Steve Goldstein, MarketWatch
Last Update: 8:38 AM ET Dec. 20, 2005
U.S. stock market futures on Tuesday got a lift from a
bigger-than-forecast decline in wholesale level inflation as well as
better-than-forecast earnings from Morgan Stanley.
The data helped S&P 500 futures to rise 3 points at 1,270.5 and Nasdaq 100
futures climb 4.5 points at 1,684.0.
On Monday, the Dow industrials finished 39 points in the red at 10,836,
the S&P 500 declined 7.4 points at 1,259 and the tech-heavy Nasdaq
Composite lost 29.7 points at 2,222.
U.S. prices of raw materials and other producers' inputs fell 0.7% in
November, the Labor Department reported Tuesday. This is the largest
monthly decline since April 2003. Excluding food and energy costs, the
core PPI rose 0.1%. Economists were expecting the PPI to fall 0.3% and the
core rate to rise 0.2%.
The dollar gains on the euro and the yen extended after the data, with the
euro recently down 0.56% at $1.1945 and the dollar up 0.42% at 116.60 yen.
Morgan Stanley also provided a boost, up 2.7% in the pre-open, after
posting earnings well ahead of forecast, earning $1.79 billion, or $1.68 a
share on revenue of $6.96 billion, against consensus forecasts of $1.08 a
share on revenue of $6.5 billion, according to Thomson First Call.
Separately the bank said it's buying the Goldfish credit card operations
from U.K. bank Lloyds TSB for $1.76 billion.
Also on the M&A front, Japan's Mori Trust confirmed a report in the Nihon
Keizai Shimbun that it's in talks to sell a central Tokyo property to
American International Group. The newspaper report said the deal could be
worth more than 400 billion yen ($3.4 billion).
And Tyco International is near a deal to sell its plastics unit to private
equity group Apollo Advisers for around $1 billion, The Wall Street
Journal reported.
Elsewhere, Wal-Mart Stores Inc., which had previously disclosed a criminal
probe into its handling of hazardous waste, revealed a new criminal probe
over possible violations of the Resource Conservation and Recovery Act.
The U.S. Attorney in Los Angeles says the company should have shipped
hazardous waste directly to a certified disposal facility using a
certified hazardous waste carrier, rather than sending certain returned
merchandise to its return centers before sending them to a waste disposal
facility.
Wal-Mart shares fell about 0.8% in pre-open deals.
Toyota Motor Corp forecast a 10% production increase for 2006 that may
allow the Japanese company to overtake General Motors as the world's top
automaker. Honda Motor Co. meanwhile said overseas sales should rise in
2006.
Also in Tokyo, the Nikkei 225 ended higher, buoyed by real estate
companies on the AIG report, while European equities were a touch lower
after pricing in weakness in technology sector.
Front-month crude oil futures rose 10 cents at $57.44 a barrel.
Broker calls
Sprint Nextel was downgraded to neutral from buy at Merrill Lynch on a
lackluster start since the merger closure. "Based on our fourth quarter
2005 store visits, we believe that Sprint has not gained substantial
momentum during its rebranding campaign, which could pressure execution
heading into 2006," the broker said.
Lehman Brothers upgraded Electronic Data Systems to overweight from
equal-weight, saying that while everything is not perfect, it believes the
momentum has turned for the company. The broker told clients that near
term, recent checks indicate that tech trends in the U.S. are favorable
for information technology services companies. Lehman said that bookings
are back on track, up 20%.
This MarketWatch update is provided 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
Thomson Financial visit us on-line at http://www.thomsonfinancial.com. For
more financial information at your fingertips, please visit
http://www.irchannel.com.
SOURCE Thomson Financial Corporate Group
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