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Wall St. eyes economy
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November 12, 1999: 6:56 a.m. ET
Investors await two key reports in effort to determine Fed's move next week
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NEW YORK (CNNfn) - Investors will turn their attention back to the economy Friday as jitters over the Federal Reserve's interest rate policy meeting next week continue to dominate Wall Street.
Early indications suggest U.S. stocks will open slightly higher, though that may change after the government releases reports on third-quarter productivity and October retail sales.
S&P futures on the Globex trading system were up 3.80 points at 1391.40. That's slightly below fair value for the futures -- a formula taking into account interest and dividend effects --which was estimated by London traders at 1391.90. Typically, one point of difference between the futures index and fair value equals about eight points on the Dow Jones industrial average as trading opens.
On Thursday, the tech-heavy Nasdaq ended the day at another record, its ninth in the past 10 sessions, while the Dow industrials wavered on concern about the direction of interest rates. The Nasdaq composite advanced 41.33 points, or 1.3 percent, to 3,197.29, while the Dow Jones industrial average slipped 2.44 points to 10,595.30. The S&P 500 index rose 8 points to 1,381.46.
In Asia Friday, stocks ended the day with mild losses following Thursday's 225-point drop in Japan's Nikkei 225 index. The Nikkei fell 69 points, or 0.4 percent, to end at 18,258.55. In Europe, stocks were mixed to slightly higher Friday ahead of the U.S. economic data, due out later this morning.
In the Treasury market, the benchmark 30-year bond rose
10/32, lowering its yield, which moves in the opposite direction from the price, to 6.06 percent from 6.09 percent Thursday. In the currency markets the dollar gained against the euro overnight, strengthening to $1.0360 from $1.0414 Thursday. It was little changed at 104.67 yen.
The attention-grabber on Wall Street Friday will be the Labor Department's quarterly tally of non-farm productivity gains - its measurement of worker productivity. Analysts polled by Reuters believe productivity surged 3 percent in the third quarter after languishing at the 0.6-percent level in the April-June period.
The productivity reading is one of the final pieces of economic information Federal Reserve policy makers will receive before meeting next Tuesday to discuss whether to raise interest rates.
The Federal Open Market Committee, which decides the direction of U.S. monetary policy, left rates unchanged at its Oct. 5 meeting, though the committee warned that members were leaning towards lifting them again in the near future, should inflation appear to be threatening the near-record economic expansion.
Also Friday, the Commerce Department will release retail sales figures for October. Analysts polled by Reuters anticipate flat sales last month following a 0.1 percent rise in September.
In corporate news, Dell Computer (DELL) should garner some attention from investors after the No. 1 direct seller of computers and systems reported third-quarter profits in line with Wall Street's expectations. At the end of New York trading, before the announcement, Dell closed up 2 at 43-7/16. In after-hours trading Thursday Dell was quoted at 44-7/8.
U.S. defense giant Lockheed Martin Corp. (LMT) could also grab some attention Friday after it said it's considering selling or shutting down some of its key satellite and military-aircraft operations as part of a broader overhaul in the wake two high-level executive departures late last month, according to a published report Friday. The Bethesda, Md. company had already been considering a range of measures to reverse a slump in its balance sheet when it announced the early retirement on Oct. 29 of two top executives, according to the Wall Street Journal.
Rite Aid Corp. (RAD) may glean some interest after the Wall Street Journal reported that the troubled drug-store chain is considering selling all or most of its 1,000 West Coast retail stores. Rite Aid acquired the stores three years ago through the purchase of a company called PayLess Holdings Inc.
Lands' End (LE) could also be in the spotlight again Friday after the direct marketer's stock plunged more than 33 percent Thursday following a fourth-quarter sales warning to investors. Lands' End reported third-quarter profits Thursday that met analysts' forecasts, but warned investors that its sales might drop in the fourth quarter - the height of the holiday shopping season. Lands' End stock plunged 27-3/16 to 56-1/8.
And Nordstrom Inc. (JWN) may enter investors' radar screens after the retailer missed Wall Street's third-quarter earnings expectations by 2 cents Thursday as more stringent control over its inventory levels failed to offset slower sales at the upscale Seattle-based chain.
Finally, CKE Restaurants Inc. (CKE)'s stock may garner attention after the company announced plans late Thursday to lay off roughly 150 employees and consolidate the majority of its Hardee's Food Systems Inc. subsidiary's corporate functions into its Anaheim headquarters. CKE also announced its third-quarter earnings will be as much as 73 percent lower than Wall Street's expectations.
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