Stock Futures up Ahead of Inflation Data

Posted 30 November 2006 @ 02:02 pm EET     Print     Reprint     E-Mail     Comments

LONDON (Reuters) - U.S. stock market futures advanced on Thursday as Microsoft rolls out an upgrade to its key operating system and before data likely to show declining inflation and a slower rate of retail sales growth.

S&P 500 futures rose 2.8 points at 1,405.00 and Nasdaq 100 futures advanced 3.5 points at 1,799.25. Dow industrial futures rose 24 points.

U.S. stocks closed sharply higher on Wednesday, with investors snapping up stocks after an upward revision to third-quarter economic data and as a rise in oil prices prompted buying of oil producers. The Dow industrials rose 90.3 points, the Nasdaq Composite rose 19.6 points and the S&P 500 rose 12.8 points.

Crude-oil futures continued to rise in electronic trade, up 11 cents at $62.57 a barrel. The dollar declined against major rivals, notably the British pound, falling to a 14-month low. Sterling rose as high as $1.9578.

Thursday's U.S. economic calendar includes the core personal consumption expenditure price index for October, a gauge of inflation that probably fell to 0.2 percent from 0.1 percent in September.

Also on the docket: October's personal income and consumer spending, weekly jobless claims and Chicago-area purchasing managers index. Companies meanwhile will be releasing same-store sales figures for November.

According to Thomson Financial, same-store sales in November probably rose 2.7 percent, below the 3.7 percent growth last year. Excluding Wal-Mart Stores Inc., however, same-store sales probably rose 4.8 percent, compared to 3.3 percent last year.

Costco Wholesale Corp., the Issaquah, Wash., warehouse retailer, reported November same-store sales rose 5% as total sales climbed 9 percent to $4.84 billion. A survey of analysts by Thomson First Call produced an average estimate of a 5.7 percent gain for November same-store sales.

Hot Topic Inc. may climb after the clothing retailer said November same-store sales dropped 4.3 percent, less than the 6.8 percent decline predicted by analysts.

Microsoft Corp. begins shipping its next-generation Vista operating system to corporate customers on Thursday. Sell-side analysts haven't been too enthusiastic about its launch.

"We believe that, all else being equal, Vista's contributions will affect earnings growth by less than 5 percent," wrote Bear Stearns analyst John DiFucci, who rates Microsoft shares peer perform.

Elsewhere, Merrill Lynch cut Internet company IAC InterActiveCorp (IACID) to neutral from buy, citing the recent strong rally in the shares, which it said was fueled in part by its addition to the S&P 500 index. The broker told clients it doesn't expect near-term results to drive meaningful multiple expansion from current levels.

The same broker upped Lazard Ltd. to buy from hold, citing meaningful improvement at its asset management unit. The U.K. Ministry of Defense has given a 6 billion-pound ($11.7 billion), 25-year contract to privatize the military's entire flight-training operations to a consortium led by British support services company VT Group and U.S. defense giant Lockheed Martin Corp., the British newspaper the Daily Telegraph reported on Thursday.

TiVo Inc. may decline after the digital video-recording firm predicted fourth-quarter sales below Wall Street's expectations.
Overseas, the Nikkei 225 climbed 1.2 percent in Tokyo, while the FTSE 100 edged 0.2 percent higher in London.