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Wall St. waits for jobs data
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September 3, 1999: 6:51 a.m. ET
Investors also watching reports of possible CBS-Viacom link, Microsoft-Sun rivalry
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NEW YORK (CNNfn) - Investors early Friday nervously awaited the August employment report, whose clues on the strength of the U.S. economy and its impact on the future of interest rates looked set to dominate Wall Street's mood.
Early indications suggested that U.S. stocks will open flat, but the release of the Labor Department data at 8:30 a.m. ET could change everything. Trading is expected to be light Friday ahead of the three-day Labor Day holiday.
S&P futures on the Globex exchange system were up 0.90 at 1,321.10 early Friday. That's little changed from fair value for S&P futures -- a formula that takes into account interest and dividend effects -- which was estimated by London traders at 1,320.97. Typically, a point of difference between the futures index and fair value equals eight points on the Dow Jones industrial average as trading begins.
On Thursday, the Dow industrials slid 94.67 points to 10,843.21, after strong retail sales data and anxiety over the jobs report rekindled concerns that inflation and higher interest rates are once again looming in the distance. The Nasdaq composite fell 16.56 points to 2,734.24, and the S&P 500 index declined 11.96 points to 1,319.11.
In Asia, most of the region's markets lost ground Friday following Wall Street's slide. Tokyo's Nikkei 225 closed just inside the minus column, down 1 point at 17,629.99. Hong Kong's Hang Seng index shed 252 points, or 1.9 percent, to trade at 13,115.60.
In Europe, London's FTSE 100 gained 24.4 points in midday trading at 6,220.0, a gain of 0.4 percent, lifted by the prospect of a $17 billion deal in the financial sector. National Westminster Bank confirmed Friday it was in talks to buy insurer Legal & General. Germany's Xetra Dax was up about 22 points at 5,212.00, a rise of 0.43 percent.
In overnight trading in the Treasury market, the benchmark 30-year bond was up 1/32 of a point in price for a yield of 6.12 percent, unchanged from Thursday's close.
In the currency markets, the dollar rebounded a bit overnight against the strong Japanese yen, gaining 0.75 to 109.87, and dipped slightly to 1.0692 against the euro.
The August jobs report is expected to show a slight drop in the unemployment rate, signaling the already-tight labor market is getting tighter. Economists polled by Reuters predict the rate to dip to 4.2 percent from 4.3 percent a month earlier. Non-farm payrolls are predicted to rise by 220,000. Hourly earnings are expected to rise 0.4 percent, compared with 0.5 percent in July.
In corporate news, stocks in CBS Corp. (CBS) and Viacom Inc. (VIA) could be on the move Friday amid reports that the two media companies have held recent talks on possible cooperation, even a potential merger. The two companies have talked about ways to take advantage jointly of new federal rules relaxing TV station ownership rules, the New York Times reported Friday. CBS shares lost 3/8 to 47-1/4 Thursday; Viacom edged down 1/16 to 42-3/16.
In the tech sector, Microsoft Corp. (MSFT) plans to offer its top-selling office software as a separate Internet service, the Financial Times reported Friday. Earlier this week, rival Sun Microsystems Inc. (SUNW) announced it will offer word processing, spreadsheets and other office applications on the Internet for free. Microsoft stock slipped 3/16 to 91-13/16 Thursday. Sun, trading near its 52-week high, lost 3/16 to 79-9/16.
Shares of Ford Motor Co. (F) could be active after the No. 2 automaker reported a nearly 20-percent jump in August car sales. The report helped propel the U.S. vehicle industry to its strongest monthly selling rate in 33 years. Ford stock slipped 15/16 to 50-15/16 Thursday.
Drug maker Eli Lilly & Co. (LLY) has announced that it has withdrawn a request that the Food and Drug Administration approve its schizophrenia drug Zyprexa as a treatment for psychosis associated with Alzheimer's disease. A company spokesman told Reuters late Thursday that the FDA is reviewing how it evaluates drugs to treat the condition. Shares in Lilly lost 1/2 at 74-7/8 Thursday.
Meanwhile, online retailer Amazon.com 's (AMZN) vice president for logistics is retiring, amid signs that the company's warehouse expansion plans are running into problems, the Wall Street Journal reported Friday. Jimmy Wright, 45, joined the company in July 1998 after serving as a logistics expert at Wal-Mart Stores Inc. An Amazon.com spokesman told the newspaper that Wright's departure was amicable. Amazon added 17/32 to 60-1/16 Thursday.
In other management changes, the president and chief operating officer at Lockheed Martin 's (LMT) space and strategic missiles sector is resigning to head specialty metals manufacturer Allegheny Teledyne Inc (ALT). Thomas Corcoran, 55, is resigning effective Oct. 1. Lockheed stock lost 1/16 to 36-13/16 prior to the announcement Thursday. Allegheny added 5/8 to 18-3/4.
In other news, No. 2 soft drink maker PepsiCo Inc. (PEP) announced late Thursday that it expects its North American unit to report lower operating profits in the third quarter because of price pressures, but that better-than-expected results at its Frito-Lay and Tropicana divisions will drive overall earnings higher. Shares slipped 5/16 to 33-9/16 Thursday.
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