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Wall Street eyes retailers
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November 26, 1999: 6:55 a.m. ET
Launch of holiday shopping season likely to focus attention on retail stocks
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NEW YORK (CNNfn) - The traditional start of the holiday shopping season will likely spur attention toward retail stocks Friday as investors gauge potential profit among U.S. retailers and how that will filter down into the bottom line.
Early indications suggest U.S. stocks will open higher in what is expected to be a quiet, holiday trading session. U.S. stock markets will close at 1 p.m. ET due to the Thanksgiving holiday.
S&P futures on the Globex trading system were up 4.00 points at 1425.50. That's 4.62 points above fair value for the futures -- a formula taking into account interest and dividend effects -- which was estimated by London traders at 1420.88. 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 Wednesday, the Nasdaq composite rallied 77.63 points, or 2.3 percent, to 3,420.50, its 15th record close in 19 sessions. The Dow Jones industrial average rose 12.54 points to 11,008.17, and the S&P 500 index advanced 12.44 points to 1,417.08. All U.S. markets were closed Thursday for the Thanksgiving holiday.
In Asia Friday, Tokyo blue chips led a broad rally across most of the region, led by Japanese technology and telecommunications shares. The Nikkei 225 closed 1 percent higher at 8,914.50, a gain of 193 points, as an afternoon rally more than made up for a downbeat start to the session.
In Europe, stocks retraced earlier gains, despite a flurry of merger activity in the U.K. banking and media sectors.
In London, the FTSE 100 slipped 7 points to 6,675.8, as a broad-based sell-off undermined early gains prompted by a 7.8 billion pound ($12.6 billion) merger in the media sector and an increased offer from Bank of Scotland in its hostile attempt to acquire larger rival NatWest.
Overnight In the Treasury market, the benchmark 30-year bond dropped 12/32 of a point in price, raising the yield to 6.24 percent, compared with a closing yield of 6.20 percent in the prior session. The U.S. bond market was closed Thursday for the Thanksgiving holiday and will wind down at 2 p.m. ET today.
In the currency markets overnight, the euro weakened against the U.S. dollar, slipping to record low territory at $1.0096 from $1.0187 Thursday. Against the yen, the dollar was also weaker at 104.07 yen from 104.35 yen Thursday.
Retail stocks will likely grab some of the spotlight Friday as American shoppers officially begin their frenzied search for holiday gifts. Black Friday -- named for the time of year retailers' books move into the black -- is one of the five busiest U.S. shopping days of the year.
That could spur attention towards prominent retailers such as Gap (GPC), Sears (S), Wal-Mart Stores (WMT), JC Penney (JCP), Federated Department Stores (FD) and others as investors gauge potential profits gleaned from what is expected to be a record shopping season.
Microsoft Corp. (MSFT) could also garner some attention after the New York Times reported Thursday that the software company and government officials are being summoned to Chicago next Tuesday to discuss a possible settlement of the company's highly publicized antitrust case.
AT&T Corp. (T) could also grab some of the spotlight after press reports suggested the company is planning to create a tracking stock to mirror the performance of its hot wireless business. Such an offering could be the largest IPO ever in the U.S., raising as much as $8 billion to $10 billion for a stake of 10 percent to 15 percent of the wireless business, the Wall Street Journal said Friday.
Japanese video game maker Sega Enterprises may also gain attention after announcing plans to turn its video game software and arcade operations into separate companies and take some of the units public. The separate companies would have stocks listed in both New York and Japan by next April, a company official told Reuters.
Banking stocks could also gain some attention from Wall Street following the Bank of Scotland's decision to raise its hostile takeover offer for National Westminster Bank Friday to 25.6 billion pounds ($41.2 billion). The increased offer comes just one day after the government gave the green light to the original offer.
The focus is now on other possible bidders, notably Royal Bank of Scotland, which has indicated it is watching the situation closely. Analysts told CNNfn.com the revised offer is unlikely to be a knockout blow, although it might represent the last throw of the dice as far as Bank of Scotland is concerned.
Only one economic release is slated for Friday -- the Commerce Department's tally on personal income and spending in October. Analysts polled by Reuters expect personal income to have risen 0.6 percent in October after ringing in unchanged in September, while consumption was likely to have risen 0.3 percent after gaining 0.4 percent a month before.
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