Market to Open Higher On Cooling Inflation Fears

by: SA Editors

At 8:35 AM EDT:

U.S. Futures

S&P 500: -1.20; 1,333.00
NASDAQ: +3.25; 1,655.75
DOW: +1.00; 11,650.00

International Indexes

NIKKEI 225: +0.05%; 15,874.28 (+7.35)
HANG SENG: -0.23%; 17,346.70 (-40.51)
S&P/ASX 200: -0.32%; 5,056.80 (-16.00)
BSE SENSEX 30: -0.84%; 11,970.47 (-100.83)

FTSE 100: -0.74%; 5,846.80 (-43.40)
CAC 40: -0.72%; 5,110.04 (-36.92)
XETRA-DAX: -0.69%; 5,885.49 (-40.84)

Commodity Futures (Reuters/Jefferies CRB)

Oil: +0.30%; $63.99 (+$0.19)
Gold: -0.89%; $587.50 (-$5.30)
Natural Gas: +2.19%; $5.05 (+$0.11)
Silver: -02.26%; $11.035 (-$0.255)

Asian Headlines (via

IMF Role Under Threat as Asia Strengthens Its Own Crisis Prevention Group The International Monetary Fund's decision to give China and South Korea more clout may not be enough to reverse a loss of influence in Asia.

China Should Allow the Currency to Gain 5 Percent a Year, Adviser Zhu Says China should allow the yuan to strengthen against the dollar at an annual pace of 5 percent to cut its trade surplus, a senior government adviser said before a visit by U.S. Treasury Secretary Henry Paulson.

Japan's Ashikaga Bank Attracts Bidders Including GE, Lone Star, People Say Ashikaga Bank Ltd., taken over by Japan's government three years ago because of mounting bad loans, may get bids from companies including U.S.-based General Electric Co. (NYSE:GE) and Lone Star Funds and Nomura Holdings Inc. (NYSE:NMR), people with knowledge of the matter said.

Asian Utilities Shares Slide After Oil Price Rises; Korea Electric Falls Asian utilities stocks dropped, led by Korea Electric Power Corp. (NYSE:KEP) and Chubu Electric Power Co., after oil prices rose the most in a month, renewing concern that higher fuel costs will erode profits.

Glaxo India Says Drug Sales Growth Will Trail Industry Average This Year GlaxoSmithKline Pharmaceuticals Ltd. (NYSE:GSK), the Indian unit of Europe's biggest drug maker, said drug sales growth will lag behind the industry average this year after some suppliers ran out of vaccines and imported medicines.

European Headlines (via

German September Investor Confidence Slumps to Lowest Level in Seven Years German investor confidence plunged to the lowest in more than seven years in September as higher interest rates and a planned tax increase dimmed the outlook for growth in Europe's largest economy.

IMF Chief Rato Says World Economy 'May Be Turning' Lower, Warns on Trade International Monetary Fund Managing Director Rodrigo de Rato said world economic growth "may be turning" down, prodding policy makers to revive stalled global trade talks.

European Stocks Drop, Led by UBS, Allianz, British Energy; Kazakhmys Rises European stocks dropped for the first time in six days after investor confidence in Germany, the region's largest economy, fell to the lowest since 1999.

DaimlerChrysler to Cut Production at Chrysler Unit by More Than Planned DaimlerChrysler AG (DCX), the world's fifth-largest car maker, is cutting second-half retail shipments at its U.S.-based Chrysler unit by at least 135,000 more cars and trucks than originally planned.

Henderson to Buy John Laing for $1.67 Billion to Add Building Management Henderson Group Plc's private- equity arm agreed to buy John Laing Plc for 887 million pounds ($1.67 billion), doubling its investment in lucrative government contracts to manage schools, hospitals and roads.

U.S. Headlines (via

U.S. August Housing Starts Decrease 6% to a 1.665 Million Pace Housing construction in the U.S. declined more than forecast last month to the lowest level in three years as waning demand left builders with a growing number of unsold homes.

U.S. Producer Prices Rise 0.1% in August; Core Rate Falls 0.4% Prices paid to U.S. producers rose less than forecast in August, and costs excluding food and energy fell by the most in three years, adding to evidence of a slowing in inflationary pressures.

Motorola to Acquire Symbol, Maker of Handheld Scanners, for $3.9 Billion Motorola Inc. (MOT), the world's second- largest maker of mobile phones, agreed to buy Symbol Technologies Inc. (SBL) for $3.9 billion in cash to expand into the market for handheld retail bar-code scanners.

Fed Confusion on Policy Impact May Increase Dangers for Economic Growth Good luck getting Federal Reserve officials to agree on how much the current level of interest rates is helping or hurting U.S. economic growth.

Stock-Index Futures Fall; General Motors, Pfizer and Oracle Shares Decline U.S. stock-index futures fell before government reports that may show prices paid by producers rose and housing starts dropped to a three-year low.

Carl Icahn Seeks Added ImClone Board Seats, New Chief at Annual Meeting Billionaire financier Carl Icahn is poised to gain control of one-third of the board of ImClone Systems Inc. (OTC:IMCL) and push to replace the biotechnology company's management.mets

Mets Clinch First NL East Division Title Since 1988 by Beating Marlins 4-0 The New York Mets clinched their first division title in 18 years with a 4-0 win over the Florida Marlins last night, as Jose Valentin hit two home runs and Steve Trachsel and three relievers combined on a five-hit shutout.

U.S. Wake Up Call (via


If the current futures indications hold up, the stock market will start the session on a negative note. There are some swing factors before the start of trading, however, that hold enough influence to change the current disposition - or to worsen it. Specifically, the market will be keying on the Producer Price Index and Housing Starts data for August at 08:30 ET.

Given the market's preoccupation with how developments in the housing sector will affect consumer spending and Fed policy, the Housing Starts report is apt to cause the most stir among traders. Economists are expecting a decline in starts to a 1.75 million annual rate from 1.795 million in the prior month.

The Producer Price Index can still make some waves, but its trading impact is apt to be diminished somewhat by the realization that we have already seen a favorable consumer price index and knowing that oil prices have come down further since the survey period, which should bode well for the September report. In all likelihood, it will take a notable surprise relative to consensus estimates for the PPI data alone to prompt a strong trading response. Economists are expecting a 0.3% increase in total PPI and a 0.2% increase, excluding food and energy.

In other developments, retailers are attracting some increased attention this morning for a variety of reasons. First, Target (NYSE:TGT) said it expects September same-store sales to be up 5.0%, which is at the high end of its prior guidance range. Secondly, AutoZone (NYSE:AZO) reported its fiscal fourth quarter results and topped the consensus estimate by $0.13. And third, the National Retail Federation has issued its holiday sales forecast, which calls for a 5.0% increase this year versus a 6.1% increase in 2005.

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