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Wall St. on earnings watch
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July 15, 1999: 6:47 a.m. ET
Traders also tracking inflation with eye on Consumer Price Index
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NEW YORK (CNNfn) - Investors prepared for a deluge of earnings reports Thursday from blue- chip companies including Coca-Cola, Boeing and Gillette, while also awaiting a reading on the June Consumer Price Index, a key inflation gauge.
Early indications suggested that U.S. stocks were set to open higher. S&P futures on the Globex exchange system were down 0.70 of a point at 1,408.50. That's about five points above fair value for the S&P futures -- a formula that takes into account interest and dividend effects -- which was estimated by London traders at 1,403.70. Typically, one point of difference between the futures index and fair value equals eight points on the Dow Jones industrial average as trading begins.
On Wednesday, the Dow industrials lost 26.92 points to close at 11,148.10. But the technology-heavy Nasdaq composite rallied 39.66 points, or 1.4 percent, to a record 2,817.89 as investors bought technology stocks amid a bullish earnings outlook for the sector. The S&P 500 index rose 4.61 points to 1,398.17.
In Asia on Thursday, technology stocks were the major beneficiaries after the strong performance of the Nasdaq composite in the U.S. The benchmark Nikkei 225 average in Japan finished up 0.4 percent, or 74 points, at 18,431.86, its highest close since Sept. 10, 1997. In Hong Kong, the Hang Seng finished up 1.35 percent, or 183.32 points, at 13,758.89.
In morning trading in Europe, bourses made weak to modest gains ahead of the U.S. economic data due out later in the day. In London, the FTSE 100 gained 44.3 points, or 0.68 percent, to 6,517.4. Investors in Frankfurt were more cautious, with the Xetra Dax up about 13 points at 5,624.31.
In overnight trading on the Treasury market, the price of the benchmark 30-year bond fell 3/32, bringing up the yield to 5.91 percent.
In the currency markets, the dollar fell slightly to 120.61 Japanese yen, and stood at $1.0214 against the euro.
Before U.S. markets open, the Commerce Department will report on Consumer Price Index, which measures inflation in goods ranging from clothing to airline tickets. Economists surveyed by Reuters predict the rate will rise by 0.1 percent, after staying flat in May. The index's core rate of inflation, excluding volatile food and energy prices, is expected to have risen 0.2 percent, up from a 0.1 percent boost in May.
Investors also will get their first chance to react to a number of earnings reports released after Wednesday's closing bell.
Apple Computer Inc. (AAPL) beat expectations for its third quarter as demand rose for its popular iMac PCs. Apple also said it plans to buy back up to $500 million of its own stock -- about 5 percent of its diluted shares outstanding, at current prices -- a sign that company executives see the current stock price as a bargain, analysts said.
"There's no doubt that they have made a tremendous turnaround, and I think the momentum is really with them," Patricia Chadwick, director of U.S. equities at Invesco, told CNNfn's "Business Day" early Thursday.
Apple earned $203 million, or $1.20 a diluted share, almost double year-earlier profits. Excluding an $89 million one-time gain, Apple's profits would have totaled $114 million, or 69 cents a share, still above the 64-cent estimate by analysts polled by the First Call Corp.
Meanwhile, shares of Advanced Micro Devices (AMD) could be active after the chipmaker posted a second-quarter operating loss of $162 million, or $1.10 per share, which was better than the $1.26 loss analysts predicted. AMD president and chief operating officer Atiq Raza also announced his resignation..
Also late Wednesday, software designer Inktomi Corp. (INKT) beat expectations, losing $5.2 million, or 10 cents per share, in the third quarter, compared with a loss of $6.3 million or 15 cents per share in the prior year. The latest results beat Wall Street forecasts by 2 cents per share.
EarthLink Network Inc. (ELNK) also reported better-than-expected results. The Internet service provider lost $6.9 million in the second quarter, or 21 cents per diluted share, beating First Call's loss estimate of 22 cents per share. The company lost $4.8 million, or 20 cents a share, a year earlier.
In other news, shares of McKesson HBOC could be active after the medical supply company revised its fiscal 1999 earnings downward for the third time this year. The company late Wednesday also announced that the federal government has launched an investigation into a possible cover-up of the company's financial problems.
McKesson also said its earnings for the recently completed first quarter would fall short of the consensus estimate of 49 cents per share.
Also, investors will be watching shares of media company Ziff-Davis Inc. (ZD), publisher of "PC Magazine." The company said late Wednesday it plans to explore strategic alternatives, including a possible sale, alliance or merger. The move follows a decision by Tokyo-based Softbank Corp., Ziff-Davis's biggest shareholder, to focus exclusively on Internet investments.
In earnings results expected Thursday, Coca-Cola Co. (KO) is expected to earn 38 cents per share in the second quarter, down from 47 cents a year ago. Analysts revised their estimates downward after Coke warned a few weeks ago that profits would be lower than anticipated in part because of a major product recall in Europe.
Gillette (G), which also has seen trouble in its overseas markets, is expected to have earned 26 cents per share in the second quarter, down from 33 cents a year earlier. The company has warned that profit would be disappointing because of slow sales of its toiletries and paper goods businesses and problems in several key markets abroad.
Analysts predict that the Boeing Co. (BA) earned 48 cents per share in the second quarter, up from 26 cents in the corresponding period in 1998. Also, Delta Air Lines (DAL) is expected to have earned $2.30 per share for its fourth quarter, up from $2.26, amid a difficult quarter for the airline industry.
In the high-tech sector, disk driver maker Seagate Technology (SEG) is expected to post profits of 34 cents per share for its fourth quarter, compared with 11 cents a year ago, while digital and wireless company Nextel Communications Inc. (NXTL) is expected to have lost $1.35 per share, compared with a negative $1.45 in the 1998 period.
In the financial sector, BankBoston (BKB) is expected to have earned 77 cents per share in the second quarter, down from 80 cents; Capital One Financial (COF) is predicted to have earned 41 cents per share in the second quarter, up from 32 cents; and analysts forecast that Fifth Third Bancorp (FITB) earned 58 cents per share in the second quarter, up from 50 cents.
Also, the Maytag Corp. (MYG) is expected to have earned 97 cents for the second quarter, up from 71 cents.
On the initial public offering front, Efficient Networks Inc. is expected to debut on the Nasdaq at the top of its price range. The Dallas based digital subscriber line provider is offering 4 million shares, priced at $15 apiece. Its ticker symbol will be "EFNT." 
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