Stock Reports Monday

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TOKYO (Reuters) - Japanese stocks were a tad higher by mid-morning on Monday, with Tokyo Electron Ltd and other techs snapped up after an upbeat outlook from chip giant Intel Corp helped push the U.S. Nasdaq up two percent.



But traders said gains were limited, with the market wary as Tokyo stocks had already risen in six of the last seven sessions and operators wanted to see details of a ministerial meeting during the morning to discuss stock-boosting measures. "Investors are taking a cautious stance as they wait for concrete details of what stock measures will be implemented and exactly how they plan to do it," said Tatsuyuki Kawasaki, director of equities trading at Kaneyama Securities.


"The round of buying in tech stocks at the start of trade seems to have run its course. It is unclear if it will dry up."


Government economic officials will meet on Monday morning to discuss proposals by ruling party politicians and other advisers on reviving Japan's sluggish stock market, but analysts are not expecting anything concrete during Monday trade.


Economics Minister Heizo Takenaka said on a TV program on Sunday that the government would not force semi-privatized Japan Post to buy more stocks with its ****** saving and insurance funds as has been proposed.


Still, investors were testing the water in the tech sector after encouraging outlooks from graphics chip designer Nvidia Corp and Intel pushed the Nasdaq up 2.04 percent and the Philadelphia semiconductor index up 3.83 percent.


Electronics conglomerate Hitachi Ltd jumped 3.2 percent to 452 yen, while chip equipment makers Tokyo Electron and Advantest Corp rose more than two percent.


In contrast, Softbank Corp tumbled 5.52 percent to 1,541 yen after the Internet services group said on Friday that its group net loss ballooned in the last business year to March 31 to 100 billion yen due to the rising cost of building and promoting Japan's largest broadband Internet service.

 

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NEW YORK (Reuters) - Stock investors will be taking the U.S. economy's pulse this week, searching for signs of a return to health and pondering prospects for corporate profits in the quarters ahead.

As the flood of corporate earnings reports slows to a trickle, Wall Street will find itself pelted by a barrage of economic data, including reports on retail sales, industrial production and inflation at the producer and consumer levels.


After a better-than-expected batch of first-quarter earnings, investors are now demanding proof that the economy is stabilizing, said John Forelli, portfolio manager at Independence Investments LLC.


"There are sprinklings of evidence that it's happening, but no one's convinced yet," Forelli said. "We should expect a better economy over the coming months just from the initial relief of getting the war behind us, but the question is the sustainability of that bounce back."


The Federal Reserve (news - web sites) last week left U.S. interest rates steady at four-decade lows, but warned of the potential for a significant drop in inflation, saying that meant the economy was in danger of weakness ahead.


It offered reasons to be optimistic, as well: The central bank hinted it will be willing to keep interest rates low until the economy shows clear signs of stabilization.


Still, with the Standard & Poor's 500 index (^SPX - news) up 16.6 percent from its 2003 trough hit in mid-March, investors are cautious.


"The equity market has obviously had a great run-up. To go further you need to show that the economy is coming out of its funk," said Jon Brorson, managing director at Neuberger Berman. "You can talk all you want about more cuts ... but big deal."


In coming weeks, the S&P 500 is likely to retest its 200-day moving average around 880, Brorson added.


So far this year, the S&P 500 is up close to 6 percent, the Dow Jones Industrial Average (^DJI - news) is up 3 percent, and the Nasdaq Composite Index (^IXIC - news) is up 14 percent.


EARNINGS TRICKLE, DATA FLOOD


Most S&P 500 companies have beaten earnings estimates for the first quarter, raising hopes corporate profits are on the mend. Now investors are hanging on every word corporate America offers on its forecasts for earnings and sales.


Quarterly scorecards from retail heavyweights Wal-Mart Stores Inc. (NYSE:WMT - news), Target Corp. (NYSE:TGT - news) and J.C. Penney Co. Inc. (NYSE:JCP - news) will grab the spotlight this week, particularly after they and many other marquee names in the sector reported unexpectedly soft April sales last week.


Also on tap are results from No. 2 personal computer maker Dell Computer Corp. (Nasdaq

ELL - news), software maker Computer Associates (NYSE:CA - news) and the world's biggest maker of semiconductor equipment, Applied Materials Inc. (Nasdaq:AMAT - news), as well as drugmaker Schering-Plough Corp. (NYSE:SGP - news)


The weakness of the dollar, which last week plunged to a four-year low against the euro, could be another factor keeping stock prices in check amid worries it signals foreign investors are losing confidence in U.S. assets, analysts said.


The government's retail sales report, due on Wednesday, will be among the week's highlights. One of Wall Street's biggest concerns throughout the economic slowdown has been that consumers -- whose spending powers two-thirds of U.S. growth -- will snap their wallets shut amid growing joblessness and geopolitical tensions.


Economists on average are expecting the data to show retail sales rose 0.4 percent overall and gained 0.1 percent excluding automobiles in April, according to a Reuters poll.





April reports on consumer and producer prices could have particular significance, given the Fed's comments. The U.S. Producer Price Index (news - web sites), due on Thursday, is expected to show a 0.6 percent drop overall and a 0.1 percent decline minus volatile food and energy prices in April. The Consumer Price Index (news - web sites), due on Friday, is forecast to show a drop of 0.1 percent overall, while its core rate is expected to gain 0.2 percent, the poll showed.

While investors may brush off any lackluster data as still tainted by the conflict in Iraq (news - web sites), the recent buying spree is probably over for now, said Jeff Kleintop, chief investment strategist at PNC Advisors.

"I'd be surprised to see the market continue its recent pace," Kleintop said. "All the big positives are behind us now and we're getting to into a seasonally weak period for the market."

 

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LONDON (Reuters) - The dollar spiralled lower on Monday, hitting its weakest level against the euro in over four years as traders jumped on comments from U.S. Treasury Secretary John Snow that a cheap dollar would help U.S. exports.

The U.S. currency fell one percent to beyond $1.16 per euro in early European trade, bringing its losses to almost 10 cents in the past month, and within sight of the euro's January 1999 launch rate around $1.1750.


The dollar also fell more than half a percent to below 116.60 yen and hit multi-year lows against the Australian and New Zealand dollars for a third straight session. Speaking on a U.S. television program on Sunday, Snow said: "When the dollar is at a lower level it helps exports, and I think exports are getting stronger as a result."


"Snow's comments poured petrol on the fire and reinforced the view that the Americans want a weaker dollar," said Neal Kimberley, senior foreign exchange manager at Bank of Tokyo Mitsubishi in London.


"The Americans are facing rising unemployment and are desperate to stimulate growth before the presidential elections."


The euro's gains against the dollar also lifted the single currency to a record high against the yen, at 135.50.


SNOWBALLING OUT OF CONTROL?


So far, euro zone policy makers have sounded relaxed about the euro's rise on the foreign exchanges but investors were keen to hear whether a meeting of the region's finance ministers on Monday and Tuesday would produce signs of disquiet at the pace of the move.


Data from the Commodity Futures Trading Commission's Commitments of Traders report, released on Friday, showed that speculators had extended their net IMM euro futures long position to the largest since November 12, 2002 during April 30 to May 6.


Though such growing euro positions raised worries about overshooting, many think there is room for further gains.


Dollar bears reckon the euro will likely edge toward the record high around $1.19 traded shortly after its launch in January 1999.


"The next target for the euro would be $1.1745, where it first traded. A break above that could spark a further rise to around $1.18 or even $1.20," said a trader at a Japanese bank.


Meanwhile, the yen's rise against the dollar kept traders wary that Japanese authorities could intervene to stem the yen's unwanted strength.


Japan's top financial diplomat, Zembei Mizoguchi, warned that the yen's rise against the dollar was not warranted when looking at relative economic fundamentals.


Japan admitted conducting covert intervention to weaken the yen earlier this year and many traders suspect this policy resumed last week.

 

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SINGAPORE (Reuters) - Asian stocks hit their highest levels in weeks on Monday, with investors upbeat about a recovery in the battered technology sector and signs the SARS (news - web sites) virus may be coming under control.





The dollar hovered at a more than four-year low against the euro, enhancing the allure of gold which leapt higher at the start of trade in Asia to approach the key $350 an ounce level.


Crude oil prices gained for a fourth straight session over expectations OPEC (news - web sites) was set to slash output to make room for a possible resumption of Iraqi exports.


Asia's export-oriented markets shrugged off a weaker dollar, which makes their goods more expensive in their biggest market, and seized instead on signs the technology sector was rebounding.


The broad Morgan Stanley Asia-Pacific ex-Japan Free Index was up 1.63 percent by mid-afternoon, at its highest level since late January.


Japanese stocks closed at a five-week high after an upbeat outlook from U.S. chip giant Intel Corp helped spark a rally in semiconductor shares and as investors bet the government would implement a stock-buying plan.


The Nikkei average rose 0.85 percent to 8,221.12. The broader TOPIX index tacked on 0.7 percent to 829.26.


PLAYING CATCH-UP


"The Nikkei has been catching up after lagging the rises in New York a bit," said Tsuyoshi Nomaguchi, Japanese equity research strategist at Daiwa Securities.


"For it to go up much further beyond 8,200, though, we are going to have to see something like a clear sign of a U.S. recovery or more than just stock-boosting measures on the domestic front."


Tokyo Electron surged nearly five percent and Matsushita Industries jumped 3.82 percent.


Bank shares also rose after Chief Cabinet Secretary Yasuo Fukuda said the government would quickly draw up a list of measures that can be implemented to shore up the ailing market.


South Korea (news - web sites) stocks rose 1.93 percent to end at a four-month high, as talk of a rate cut added fuel to a tech-led rally. Samsung Electronics rose 3.15 percent.


Hong Kong shares were up one percent, as investors bet the World Health Organisation would soon lift a travel advisory that has crippled the local economy after the number of new cases of Severe Acute Respiratory Syndrome fell.


China's benchmark Shanghai composite index was up nearly one percent after a prolonged May Day holiday helped ease worries about SARS in China, the epicenter of global outbreaks of the flu-like virus.


Singapore stocks were up 1.51 percent to around a one-month high, with the market cheering signs that the doldrums in the tech sector and the SARS threat were both receding.


Taiwan ended 0.4 percent higher and Australia closed up 0.8 percent. The Australian market was helped by a strong debut for insurer Promina, which rose 10 percent after the world's biggest flotation this year.





SNOW SMOTHERS DOLLAR

U.S. Treasury Secretary John Snow helped propel the euro -- which has risen nearly 12 percent against the dollar this year -- saying on a U.S. television program on Sunday that a cheap dollar would help U.S. exports.

The euro rose as high as $1.1579 its highest level since shortly after its launch in January 1999, from about $1.1490 in late U.S. trade on Friday.

The dollar has been steadily weakening in recent weeks on doubts about the outlook for the U.S. economy and lower U.S. interest rates compared to those of other currencies.

The dollar slipped to 116.89 yen but was cushioned by fears Japanese authorities may intervene to stem the yen's rise.

U.S. light crude for June delivery rose 17 cents to $27.89, maintaining a rally sparked when OPEC President Abdullah al-Attiyah said in an interview published on Friday the cartel should adopt output cuts at it June 11 meeting. ((For the state of play of Asian stock markets please click on:

 

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NEW YORK (Reuters) - U.S. stocks were set to open little changed to fractionally higher on Monday before a flood of data this week that may help Wall Street to take the pulse of the world's largest economy.


After a better-than-expected batch of first-quarter earnings, investors are now demanding proof that the economy is stabilizing, analysts said.


As the corporate reporting seasons winds down, investors turn to various data for clues about the economy, with stocks up more than 15 percent from mid-March. The Federal Reserve (news - web sites) has hinted that earnings-eroding deflation may be a threat and stocks have since pared gains, though some key market gauges logged their fourth higher week in a row on Friday.


"The market is showing that the cup is half full. People expect things to get better. But you have to say that the open is scrambled," said Larry Wachtel, analyst at Prudential Securities. "As we move along, the economic data will have some influence. The market has an upward bias, but it's a little overextended."


Monday's session will see the Kansas City Fed manufacturing survey for April, due at 11 a.m. But later this week, investors will study retail sales, industrial production and inflation at the producer and consumer levels.


Equity index futures were indicating a flat to slightly higher Wall Street open. Standard & Poor's 500 stock index futures for June were flat at 932, while Nasdaq futures for the same month were up 3 points at 1,146.50 and Dow Jones Industrial futures were unchanged at 8,578.


Among the handful of key earnings this week are retailers such as Wal-Mart Stores Inc. (NYSE:WMT - news) and J.C. Penney (NYSE:JCP - news) on Tuesday. Computer maker Dell Computer (Nasdaq

ELL - news), chip equipment maker Applied Materials (Nasdaq:AMAT - news) also report this week.


"The market will focus on this week's earnings which include many retailers. In addition, major economic data will be eyed, namely retail sales and housing starts," said John Person, head analyst with Infinity Brokerage Services. "These reports are important as they would reflect April's time period which was when the war with Iraq (news - web sites) was winding down."


Person said the market is also taking its cue from remarks over the weekend by Treasury Secretary John Snow, who said the dollar was helping U.S. exporters and who called the U.S. economy "soggy."


The greenback on Monday fell to its weakest level against the euro in more than four years as markets doubted the United States' determination to maintain its "strong dollar" policy.


Shares of Siebel Systems Inc. (Nasdaq:SEBL - news) fell to $9.26 from a Friday close of $9.53. Late on Friday it said it received a Securities and Exchange Commission (news - web sites) inquiry about a possible violation of a regulation aimed at preventing companies from selectively doling out important financial information.


Stocks rose on Friday, with the S&P 500 and Nasdaq chalking up their first four-week winning streak since October, as forecasts from Nvidia Corp. (Nasdaq:NVDA - news) and Intel Corp. (Nasdaq:INTC - news) lured investors back to the market after two days of declines.


The Dow Jones industrial average (^DJI - news) rose 113.38 points, or 1.34 percent, at 8,604.60. The Standard & Poor's 500 Index (^SPX - news) added 13.14 points, or 1.43 percent, to 933.41. The tech-laced Nasdaq Composite (^IXIC - news) rallied 30.46 points, or 2.04 percent, to 1,520.15

 

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- Stocks to watch: REGIS CORP (NYSE:RGS - news)




-- Regis Corp., the world's largest chain of hair salons, on Monday said it is buying 286 salons from its chief rival, Opal Concepts Inc., for $10.4 million to expand in the U.S. West and Southwest. Shares ended at $28.25 on Friday.


HARTFORD FINANCIAL SERVICES (NYSE:HIG - news)


-- Insurer Hartford Financial said on Monday it will take a $1.7 billion charge in the first quarter for an addition to its reserves for asbestos claims and announced it will cut 1,500 jobs. Shares ended at $43.62 on Friday.


KANA SOFTWARE (Nasdaq:KANA - news)


-- WR Hambrecht said on Monday it was raising its price target on Kana Software to $8 from $6. Shares of Kana ended on Friday at $5.72.


SYNAVANT INC. (Nasdaq:SNVT - news)


DENDRITE INTERNATIONAL INC. (Nasdaq

RTE - news)


-- Synavant, a technology company that sells products to the pharmaceutical industry, said late on Friday its board had accepted a sweetened takeover offer of $2.83 a share from Dendrite International.

 

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NEW YORK (Reuters) - U.S. Treasuries rose on Monday for the sixth consecutive session as the growing conviction that the Federal Reserve (news - web sites) will keep interest rates low inspired buying.

Those hopes were fostered when the Fed hinted in a statement last week it would keep interest rates low to keep disinflation from turning into deflation. Bond prices, which move in the opposite direction to yields, soared following the statement and gave the 10-year benchmark Treasury note yield its biggest percentage weekly decline since 1998. "The main thing going on is that the chitter-chatter about deflation continued over the weekend," said Ethan Harris, chief U.S. economist at Lehman Brothers. "You go to meetings and that's all people want to talk about. Even though the Fed called it a minor risk, just raising deflation as an issue is resonating in the market so we're seeing a continuation of the rally from last week."


Ten-year yields hovered near two-month lows.


Economists at Lehman expect the Fed to cut interest rates by 50 basis points in June and not to begin raising them again until the middle of 2004.


"We think on Friday we'll get a flat core reading on consumer prices for April which would be the second month in a row when consumer prices remained flat and would mean a year-over-year inflation rate of just 1.5 percent, about half the inflation rate of a year-and-a-half ago," Harris said.


Lehman is not forecasting that inflation will continue to unwind at such a pace, but if it did, it would bring about deflation in a couple of years, Harris said.


"That's enough to add a lot of fuel to the Treasury market," he said.


Treasury prices were bolstered not so much by the expectation of imminent interest rate cuts but by the longer-term outlook for persistently low rates, Harris said.


"People are looking more and more closely at what the Fed said last week which implied not so much that they're going to cut rates, but that they will keep monetary policy easy for a very long time; they're not going to tighten until they've seen growth that's strong enough to start to raise inflation," Harris said. "That's a message that whatever tightening we eventually get from the Fed is a long way off; and that's filtering into the curve as well."


Mortgage-related buying also spurred gains, traders said.


"The mortgage guys don't want to buy, but they're hooked," said Gib Clark, head trader at Zions First National Bank Capital Markets. "Another wave of refinancing is forcing them into the market to buy Treasuries to lengthen duration."


"You have the green light from the Fed, with the market taking the view that the Fed won't raise interest rates for six months to a year, you have the mortgage (-related) buying, last week's profitable Treasury refinancing auctions. and European and Asian buying," said John Spinello, fixed-income strategist at Merrill Lynch Government Securities.


Foreign investors are comfortable with the Fed's emphasis on deflation and so far have not been deterred from buying U.S. securities by dollar weakness, he said.


Spinello said low yields were prompting another round of refinancing, forcing mortgage portfolio managers to buy Treasuries to lengthen their average portfolio durations.


At 11:30 a.m. (1530 GMT), the 10-year note was up 10/32, taking yields to 3.65 percent, versus 3.68 percent at Friday's close and 3.93 percent a week ago Friday.

 

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NEW YORK, May 12 (Reuters) - U.S. stocks rose more than 1 percent in midday trading on Monday with technology stocks leading the way, boosted by a positive brokerage call on Cisco Systems Inc. (NasdaqNM:CSCO - News)


Cisco, the biggest maker of equipment that directs Internet traffic, jumped about 5 percent on the Nasdaq where it was the most actively traded issue, helping to boost other stocks in the networking sector.

"(Cisco) definitely helps. Cisco is a big company and it's heavily weighted in a lot of indexes. If it goes up, it pulls up a lot of major indexes up with it," said David Memmott, head of listed block trading at Morgan Stanley. But he, like others, said he was a little surprised by Monday's gains.

"My only concern is that this market has been very earnings driven and after this week we've pretty much finished off major earnings reports," he said. "It will be interesting to see the next catalyst in this marketplace."

As the flow of corporate scorecards thins to a trickle, the Street turns its sights to a torrent of reports this week on the world's largest economy. Investors welcomed news Monday that the Federal Reserve Bank (News - Websites) of Kansas City's monthly manufacturing index rose to 15 in April from 11 in March. This week, investors will also study data on retail sales, industrial production and producer and consumer inflation.

The technology-laced Nasdaq Composite Index (NasdaqSC:^IXIC - News) rose 20.52 points, or 1.35 percent, to 1,540.67. The blue-chip Dow Jones industrial average (CBOT:^DJI - News) rose 103.78 points, or 1.21 percent, to 8,708.38 and the broader Standard & Poor's 500 Index (CBOE:^SPX - News) was up 10.41 points, or 1.12 percent, at 943.82.

More than two stocks rose for each decliner on the New York Stock Exchange (News - Websites) and the ratio was 3 to 2 on the Nasdaq. Trading was active with 656 million shares traded on the Big Board and 945 million on the Nasdaq.

Earlier, stocks were weaker, partly in line with a big decline in the U.S. dollar, traders said. Wall Street also was pausing for breath after a rally of more than 15 percent over the past eight weeks, as investors now want proof that the economy is indeed on the mend.

The dollar weakened after remarks on Sunday by Treasury Secretary John Snow, taken by the market to mean that the United States was abandoning its "strong dollar" policy. The greenback on Monday fell to its weakest level against the euro in more than four years. But stocks soon shed their losses.

"You are still overbought and you still have the weaker dollar issue ... It's helpful for exporting companies but it hurts foreign companies investing in the U.S.," said Larry Wachtel, analyst at Prudential Securities.

CISCO RISES

Cisco rose 75 cents to $16.70. Lehman Bros. said it raised its rating on Cisco to "overweight" from "equal weight."

The American Stock Exchange networking index (AMEX:^NWX - News) rallied 3.7 percent, as Cisco rivals such as Juniper Networks (NasdaqNM:JNPR - News), up 46 cents to $12.46, or 3.8 percent, also gained.

Shares of Siebel Systems Inc. (NasdaqNM:SEBL - News), the No. 1 provider of customer service software, fell 25 cents to $9.28, or 2.6 percent. Late on Friday Siebel said it received a Securities and Exchange Commission (News - Websites) inquiry about a possible violation of a regulation aimed at preventing companies from selectively doling out important financial information.

Among Dow issues, Altria Group Inc. (NYSE:MO - News) gained $1.36 to $33.06, or 4.3 percent. A report in this week's Barron's said Altria's stock price could surge more than 26 percent by year's end if it gets favorable legal decisions, resumes its stock buyback program and demonstrates the viability of the domestic tobacco industry. (Additional reporting by Rachel Cohen, Doris Frankel)

 

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NEW YORK (Reuters) - Stocks climbed sharply on Monday as investors betting on better economic times ahead snapped up shares of technology companies like Cisco Systems Inc. (

The rally pulled the Nasdaq Composite Index (^IXIC - news) to its highest level in about 11 months and hoisted the Standard & Poor's 500 index (^SPX - news) to its highest close since August.


Cisco, the biggest maker of equipment that directs Internet traffic, jumped more than 4 percent following a positive brokerage call and helped to boost other stocks in the networking sector. Sun surged nearly 9 percent.


"Today we are willing to look on the bright side ... and say that the Fed's not going to be inclined to raise rates too quickly, and there are some signs the economy's going a little better," said Charles White, president of investment firm Avatar Associates.


Traders also said short-covering was fueling some of the market's gains. As the market climbed, short-sellers -- investors who sell borrowed stock, hoping to buy it later at lower prices -- were forced to buy back shares in order to stem losses.


The technology-laced Nasdaq Composite Index (.IXIC) climbed 21.25 points, or 1.4 percent, to 1,541.40, its highest close since June. The Dow Jones industrial average (^DJI - news) climbed 122.13 points, or 1.42 percent, at 8,726.73, and the broader Standard & Poor's 500 Index (.SPX) gained 11.7 points, or 1.25 percent, to 945.11.


Trading was active with 1.4 billion shares traded on the Big Board and 1.8 billion on the Nasdaq. More than two stocks rose for every decliner on the New York Stock Exchange (news - web sites) and the ratio was better than 5 to 3 on the Nasdaq.


Investors may be fearful of missing out on a rally that has driven the Standard & Poor's 500 index (.SPX) up 18 percent since mid-March, analysts said, but some Wall Street experts cautioned that the market might soon run out of steam.


CISCO, SUN SAIL HIGHER


Cisco rose 72 cents to $16.67, or 4.5 percent. Lehman Bros. said it raised its rating on Cisco to "overweight" from "equal weight."


The American Stock Exchange networking index (^NWX - news) rallied 3.45 percent, as Cisco rivals such as Juniper Networks (Nasdaq:JNPR - news), up 53 cents to $12.53, also gained.


Sun Microsystems, the Nasdaq's most actively traded stock, jumped 34 cents, or 8.8 percent, to $4.21. Analysts cited persistent rumors of a possible takeover as part of the reason behind the sharp move.


Retailers were another bright spot as the S&P retail index (^RLX - news) rose 2.28 percent. Prudential Securities raised its rating on the softlines, or clothing, retail sector as well as its rating on AnnTaylor (NYSE:ANN - news), which jumped $1.65, or 7 percent, to $24.92.


Among Dow issues, Altria Group Inc. (NYSE:MO - news) gained $1.40, or 4.4 percent, to $33.10. A report in this week's Barron's said Altria's stock price could surge more than 26 percent by year's end if it gets favorable legal decisions, resumes its stock buyback program and demonstrates the viability of the domestic tobacco industry.


As the flow of corporate earnings reports thins to a trickle, investors are turning their focus to the health of the world's largest economy. On Monday, the Federal Reserve (news - web sites) Bank of Kansas City said its monthly manufacturing index rose to 15 in April from 11 in March. Still ahead this week are reports on retail sales, industrial production and inflation