Wall Street Seen Higher as Oil Dips
October 01, 2004 09:07:00 AM ET
By Michael Flaherty
NEW YORK (Reuters) - U.S. stock futures rose steadily throughout the morning, pointing to a higher market open on Friday, as sliding oil prices were a welcome sign for investors on the opening day of the fourth quarter.
Shares of software company PeopleSoft Inc. (PSFT) rose in pre-market trade after the company said its board had decided to remove Craig Conway as president and chief executive immediately.
TiVo Inc. (TIVO) shares also jumped higher in pre-market trade after the television recording technology company announced a development deal with online movie rental company Netflix Inc. (NFLX).
Among the chatter on Wall Street was talk of the presidential debates on Thursday night in Miami. Wall Street widely regards President Bush's re-election as good for the stock market, and all eyes were on the president to see how he matched up against his opponent, John Kerry. Barry Hyman, chief investment strategist at Ehrenkrantz, King, Nussbaum said that part of the positive market sentiment this morning may be due to last night's presidential debate.
``Last night's debate did not indicate a clear winner,'' Hyman said, indicating a positive sign for President Bush.
Oil prices slid on Friday, giving some relief to the market, as rising energy costs and their impact on corporate profits have remained a key focus for investors.
U.S. light crude (CLc1) slid 32 cents to $49.32 a barrel, holding below the psychologically sensitive $50 level. Earlier in the week, crude prices hit a record high of $50.47 on supply concerns stemming from Nigeria.
S&P 500 futures were up 4.60 points, above fair value accounting for dividends, interest rates and time to expiration on the contract, indicating the market would open higher.
Dow Jones industrial index futures were up 39 points, while Nasdaq 100 futures rose 12.50 points.
``The market trades off of crude,'' said Daniel Fox, a trader at First Albany Corp., indicating that lower oil prices were boosting stocks.
Investors may get some direction from economic data expected during the session. The University of Michigan's U.S. consumer sentiment survey is due at 9:45 a.m. EDT (1345 GMT) with economists surveyed by Reuters expecting a slight rise.
The ISM survey of U.S. manufacturing and U.S. construction spending data are scheduled for 10 a.m. EDT. Economists surveyed by Reuters expect the survey to show a dip of 1 point on the ISM compared to the previous month.
On Thursday, the Dow Jones industrial average closed down 55.97 points, or 0.55 percent at 10,080.27, dragged down by Merck & Co Inc. (MRK). The company announced a global withdrawal of a key company drug, sending its stock down 26 percent. Shares of the company rose 1.5 percent in pre-market trade on Friday.
The Standard & Poor's 500 Index ended a hair down while the technology-heavy Nasdaq Composite Index ended higher for the third consecutive day.
``Even with the announcement from Merck, the markets were reasonably firm yesterday,'' said Mike Lenhoff, chief strategist & head of research, Brewin Dolphin Securities Ltd.
U.S. stocks may also be riding the coat tails of climbing European and Japanese shares. Britain's FTSE 100 share index rallied more than 1 percent to just shy of a two-year high, led by gains from bank, telecom and oil stocks.
© 2004 Reuters
