U.S. Stocks Set for Steady Open
September 24, 2004 07:01:00 AM ET
NEW YORK (Reuters) - U.S. stocks looked set for little change at the open on Friday as losses in previous sessions were seen leveling off, but high oil prices and their possible effect on corporate profits and consumer spending remain a worry for investors.
Software major Oracle Corp. (ORCL) might grab attention on market talk it is likely to win clearance from the European Commission for its hostile $7.7 billion takeover of rival software firm PeopleSoft Inc. (PSFT).
In other corporate news, Smith Barney raised its rating on shares of Marathon Oil Corp. (MRO) to ``buy'' from ``hold'' and increased its price target to $45 per share from $39.
U.S. blue chips slumped to near a five-week low on Thursday after a sharp drop a day earlier as oil flirted with last month's record high and a key gauge of future economic activity fell for the third straight month.
S&P 500 futures were up a point, about even with fair value accounting for interest rates, dividends and time to expiration on the contract, indicating the market would open little changed.
Dow Jones industrial index futures rose 7 points, while Nasdaq 100 futures inched down a point.
``The futures suggest a steady, rather than a bright start, with the Dow up and the Nasdaq a tiny bit off. With the Dow, you had a 135 point loss on Wednesday, 70 points yesterday, so I think you'll see a little bit of a pull back today, with investors saying 'that's enough for the time being,''' said David Buik, head of business strategy at spread-betting firm Cantor Index.
``But if the durable goods figure is really awful,'' the market will take a hit, Buik said.
U.S. durable goods figures are due out at 8:30 a.m. EDT, with economists predicting the same 1.6 percent increase as last month. Existing home sales numbers come out at 10 a.m. EDT, with economists estimating a slight decrease from a month earlier.
Oil prices held steady above $48 as the U.S. government said it would lend refiners crude from the Strategic Petroleum Reserve (SPR), but traders deemed the loan too small to have a lasting impact.
U.S. light crude (CLc1) shed 25 cents to $48.25 a barrel in electronic trading, after trading as high as $49 on Thursday, 40 cents below the $49.40 record set on Aug 20.
Semiconductor stocks, which provided some support to the Nasdaq on Thursday, may sag after Philips predicted a significant slowdown for the semiconductor industry next year and cut forecasts for its closely watched chip unit.
Drug maker Pfizer Inc. (PFE) may get a lift after the U.S. government refused to allow a nonprofit company to sell cheaper, generic versions of a blockbuster Pfizer drug for treating glaucoma.
Elsewhere, Iomega Corp. (IOM), the maker of ``Zip'' portable storage devices, will be eyed after it cut 145 employees, or 25 percent of its work force, as part of a restructuring that will result in a charge of $5 million to $7 million in the second half of 2004.
Shares in PalmSource Inc. (PSRC) fell about 10 percent to $22.57 after the closing bell on the electronic brokerage INET on Thursday after the developer of operating system software for handheld devices reported quarterly results and said its forecast is clouded by Sony Corp.'s withdrawal from the U.S. handheld computer market.
© 2004 Reuters
