By Steve Goldstein, MarketWatch
Dec 28, 2005
U.S. stock market futures pointed toward a rebound Wednesday, ahead of
data expected to show a rise in December consumer confidence and as the
Treasury yield curve mostly flattened following an inversion in the previous
session.
Investor sentiment was also buoyed by a surge in Tokyo's benchmark stock
market index to a fresh 5-year high, which helped assuage concerns about a
prolonged weakness.
March S&P 500 futures rose 2.80 points at 1,266.80 and Nasdaq 100 futures
gained 3.5 points at 1,687.0. Dow industrials futures gained 23 points to
10,855.
On Tuesday, the Dow tumbled 105 points at 10,777, the Nasdaq Composite
fell 22 points at 2,226 and the S&P 500 ended 12 points weaker at 1,256 after
the two-year Treasury note yielded more than the 10-year note for the first
time in five years. Such an inversion typically points to a recession.
But in electronic trade, the yield curve flattened, giving investors hope
that the inversion was just brief, temporary occurrence.
Consumer confidence data for the U.S. in December is due to be released at
10 a.m. Eastern, with economists polled by MarketWatch looking for a rise to
102.4 points from 98.9 in November.
Elsewhere, the dollar was lower against both the euro and the yen, with
the euro in particular well bid after stronger-than-forecast German consumer
confidence data. One euro recently was worth $1.1918, up 0.65% from late
Tuesday.
Light sweet crude oil contracts rebounded, adding 24 cents at $58.40 in
electronic trade, while natural-gas futures bounced 8.3 cents at $11.105 per
million British thermal units after tumbling 10% on Tuesday.
Of companies in focus, Celgene garnered most of the pre-open interest,
rising 4.6% to $60.10 in Instinet after saying late Tuesday that the Food and
Drug Administration approved its drug Revlimid. The company also announced a 2
for 1 stock split and said its chief executive would retire in May.
Elsewhere, Covad Communications Group soared 24% to 83 cents in Instinet
after the company said it reached agreement with Verizon Communications to
settle all pending litigation. The companies also agreed to expand Covad's
existing commercial line sharing agreement to provide its xDSL services over
line being used by resellers of Verizon's voice services. Covad also said it
will be the preferred provider of local access and network services to MCI's
DSL business customers.
Linens 'n' Things shot up 8.7% to $26 in Instinet after the company said
in a regulatory filing late Tuesday that it expects to satisfy certain
conditions necessary to complete its acquisition by private-equity firm Apollo
Capital Management.
The home furnishings retailer will hold a special shareholders meeting on
Jan. 30 to vote on the proposed $28 a share cash acquisition.
The board of Albertson's still backs CEO Larry Johnston amid the collapse
of takeover talks last week, The Wall Street Journal reported, citing a letter
it received from independent directors.
Separately, J.P. Morgan upgraded Albertson's to neutral from underweight,
saying the "bungled" deal talks open the door for shareholder activists. The
stock edged up 4 cents to $20.86 in light trading in Instinet.
DaimlerChrysler agreed to sell its off-highway unit to EQT for 1.6 billion
euros ($1.9 billion). The unit was sold for 1 billion euros excluding assumed
debt and pensions, and the automaker said the deal will increase net profit by
300 million euros. DaimlerChrysler previously said it was looking to sell the
unit.
Also overseas, AstraZeneca agreed to its fourth deal in a month and will
pay up to $300 million in milestones to license an Alzheimer's disease-
treating drug in Phase II development, while the Sinopec Group will get a $1.2
billion one-off payment from the Chinese government to compensate for high oil
prices. Most of that $1.2 billion will go to the Sinopec listed on the New
York Stock Exchange.
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
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SOURCE Thomson Financial Corporate Group
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