MARKET SNAPSHOT Stock futures flatten as CPI offsets tech optimism Rate fears fueled by core CPI rise; Goldman upgrades Intel and Boeing E-mail | Print | | Disable live quotes By Tomi Kilgore, MarketWatch Last Update: 9:06 AM ET Jun 14, 2006
NEW YORK (MarketWatch) -- U.S. stock futures flattened out Wednesday, erasing early gains, as a larger-than-expected rise in core consumer inflation heightened interest-rate fears and offset technology-sector optimism after several semiconductor companies were upgraded. Futures for the Dow Jones Industrials Average slipped 8 points to 10,769. They'd been up as much as 58 points before the inflation data were released. S&P 500 futures dipped 0.2 points to 1,232.2, while futures for the technology-rich Nasdaq 100 gained 2 points to 1,535. U.S. core inflation, which excludes food and energy costs, increased 0.3% in May, the Labor Department said, topping expectations of a 0.2% rise. The headline consumer-price index rose 0.4%, matching expectations. See Economic Report. "That was a pretty ugly CPI number," said John Hughes, managing director of Epiphany Equity Research. "The trend is not good and suggests we have another rate hike and more uncertainty." Following the release of the data, the federal-funds-futures market priced in a 100% chance that the Federal Reserve will raise its target for overnight rates by 0.25 percentage point to 5.25% following its policy-setting meeting on June 28-29. That compares with an 84% chance on Tuesday. The data also knocked bonds lower, with the yield on the benchmark 10-year Treasury note ($TNX : CBOE 10-Year Treasury Yield Index News , chart, profile, more Last: 50.11+0.50+1.01%
9:25am 06/14/2006
Delayed quote dataAdd to portfolio Analyst Create alertInsider Discuss Financials Sponsored by: $TNX50.11, +0.50, +1.0%) rising 0.04 percentage point to 5.001%. On Tuesday, stocks ended a seesaw session with a sharp late-day sell-off, with the Dow industrials ($INDU : Dow Jones Industrial Average News , chart, profile, more Last: 10,706.14-86.44-0.80%
4:30pm 06/13/2006
Delayed quote dataAdd to portfolio Analyst Create alertInsider Discuss Financials Sponsored by: $INDU10,706.14, -86.44, -0.8%) wiping out all its gains for the year and the Nasdaq Composite ($COMPQ : Nasdaq Composite Index News , chart, profile, more Last: 2,072.47-18.85-0.90%
12:19am 06/14/2006
Delayed quote dataAdd to portfolio Analyst Create alertInsider Discuss Financials Sponsored by: $COMPQ2,072.47, -18.85, -0.9%) suffering its second eight-session losing streak in a month. Traders expressed concern that a combination of higher inflation, rising interest rates and slowing economic growth would hurt corporate profits. Read more. "Another piece of bad news at the levels we're at could lead to further downside, but you also have to consider from a time standpoint that we're very, very close to putting in a tradeable low," said Epiphany Equity's Hughes. Still, some were skeptical that any potential rebound could be sustained, given the recent tendency for late-day selling. "We think it is still too early and too unclear to be aggressive on the long side for a short-term rally," said Philip Roth, chief technical market analyst at Miller Tabak. "Oversold is not enough; we need to see evidence that a new buying interest, one with staying power of more than a few hours, is developing." Outside of stocks, commodities markets were attempting to rebound. Gold futures were up $2.20 at $569 an ounce in electronic trading, after plunging $44.50, or 7.3%, to a three-month low on the New York Mercantile Exchange on Tuesday. See Metals Stocks. Crude oil for July delivery tacked on 7 cents to $68.63 an ounce in electronic trading ahead of weekly U.S. supply data. The price had tumbled $1.80, or 2.6%, to a two-month low on Tuesday. See Futures Movers. Analysts at Wachovia expect the Energy Department to report at 10:30 a.m. Eastern an increase in crude inventories of 500,000 barrels a day for last week. Motor gasoline supplies likely fell by 500,000 barrels, Wachovia said. Meanwhile, the U.S. dollar added to gains, after running up to a seven-week high against the yen on Tuesday. The dollar was last up 0.1% vs. the yen at 115.38 while the euro slipped 0.1% against the greenback to $1.2537. Cheap enough to buy Goldman Sachs analyst James Covello said he was less negative on the semiconductor-production-equipment sector given the recent sell-off in share prices. He therefore upgraded the sector to neutral from cautious. Covello also upgraded Dow component Intel (INTC : Intel Corporation News , chart, profile, more Last: 17.12+0.26+1.54%
9:10am 06/14/2006
Delayed quote dataAdd to portfolio Analyst Create alertInsider Discuss Financials Sponsored by: INTC17.12, +0.26, +1.5%) to outperform from in line, and recommended buying the stock after an imminent earnings disappointment given that margins have likely bottomed, market share is expected to gain and valuation is attractive. He also upgraded Intel's chief rival, Advanced Micro Devices, (AMD : Advanced Micro Devices, Inc. News , chart, profile, more Last: 24.39-1.29-5.02%
9:05am 06/14/2006
Delayed quote dataAdd to portfolio Analyst Create alertInsider Discuss Financials Sponsored by: AMD24.39, -1.29, -5.0%) to in line from underperform, as the stock has fallen to his fair-value estimate of $25. Applied Materials (AMAT : Applied Materials Inc News , chart, profile, more Last: 16.14-0.09-0.55%
9:10am 06/14/2006
Delayed quote dataAdd to portfolio Analyst Create alertInsider Discuss Financials Sponsored by: AMAT16.14, -0.09, -0.6%) was upgraded to in line from underperform on the belief that earnings will grow through expense controls and lower share counts. Covello upgraded SanDisk Corp. (SNDK : SanDisk Corporation News , chart, profile, more Last: 49.92-0.66-1.30%
9:10am 06/14/2006
Delayed quote dataAdd to portfolio Analyst Create alertInsider Discuss Financials Sponsored by: SNDK49.92, -0.66, -1.3%) to in line from underperform on valuation and the belief that the worst is behind the company. Goldman also upgraded aerospace giant and Dow component Boeing (BA : Boeing Co. News , chart, profile, more Last: 76.98-0.90-1.16%
9:05am 06/14/2006
Delayed quote dataAdd to portfolio Analyst Create alertInsider Discuss Financials Sponsored by: BA76.98, -0.90, -1.2%) to in line from underperform, citing an increased outlook for aircraft deliveries. Analyst Richard Safran's raised delivery outlook prompted him to lift his earnings estimate to $3.50 a share from $3.35 in 2006, to $4.50 a share from $4.15 in 2007 and to $5.15 a share from $4.50 in 2008. Elsewhere in the aerospace sector, shares of EADS, parent of Boeing competitor Airbus, plunged as much as 34% in European trading after Airbus warned that deliveries of its new A380 superjumbo aircraft would be delayed up to seven months because of a production problem. See full story. Tomi Kilgore is a reporter for MarketWatch in New York.
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