Morning Watch, Feb. 21
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February 21, 2008
Stocks are set to open steady Thursday morning, with strength in the tech sector following an analyst upgrade of Cisco Systems (CSCO). Thirty minutes before the opening bell on Wall Street, stock index futures indicated that the Dow Jones Industrial Average ($INDU) might open 50 points higher. The NASDAQ Composite Index ($COMPQ) could gain 15 or 20.
Cisco Systems shares rose 70 cents to $23.90 after Citigroup analysts raised the rating on the stock to “buy” from “hold”. The firm cited compelling valuations and the possibility that the company will weather the slowdown in consumer spending better than companies in other industries.
Research in Motion (RIMM) is rallying after the mobile device maker raised its estimates for future subscriber growth. RIMM gained $9.00 to $106.91 on the news. Analog Devices (ADI) and JC Penney (JCP) are set to open higher after posting strong earnings for the most recent quarter. Shares of the gold mining companies are expected to continue their recent run northward after the precious metal set another record high, up $10.00 to $948 an ounce early Thursday.
In economic news, the latest weekly jobless claims came in a bit worse than economist forecasts. According to the Labor Department, the number of flings for jobless benefits fell by 9,000 to 349,000 in the week ended February 16. Economists were looking for a decline to 345,000.
The list of economic indicators is due out at 10:00 a.m. Eastern time. Economists predicting that the index will fall .1 percent in January, which follows a .2 percent drop the month before. The Philadelphia Fed Survey has a bit more market moving punch, however. The report, also slated for 10:00, is forecast to print at -10.00, up from -20.9 the month before.
Bonds are bid ahead of the news. The benchmark ten-year Treasury bonds rose 6/32nd and the yield is now 3.86 percent. Meanwhile, the buck is lower, to 108 on the yen and to 1.473 on the European currency. Crude oil is down 60 cents to $99.10 a barrel ahead of weekly inventory data due out at 10:30. The weekly stats are released a day later than usual because of the President’s day holiday earlier this week.
In the equity market, the news thus far should help the major averages add to yesterday’s gains. In a volatile session, the Dow finished the day up 90 points. Today, Cisco and RIMM should lead the techs higher early and build on those gains. However, trading might remain somewhat cautious in early trading ahead of the economic data and the energy inventory stats due out later this morning.
Frederic Ruffy
Senior Writer
Optionetics.com ~ Your Options Education Site
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