• E-mail
• Print
• Comment
• Font Size
• Digg
• del.icio.us
• Discuss article

Stock futures point slightly higher; data eyed

Posted on: Friday, 6 January 2006, 07:14 CST

By Ellis Mnyandu

NEW YORK (Reuters) - Stock futures pointed to a flat to slightly firmer open on Wall Street Friday, but caution was evident ahead of employment data expected to shed more light on when Federal Reserve interest rate hikes may end.

Economists polled by Reuters expect U.S. payrolls to show a gain of 200,000 new jobs in December after adding 215,000 new jobs in November. The unemployment rate is expected to hold steady at 5.0 percent. The data are due at 8:30 a.m.

Payrolls are among economic indicators followed closely by the Fed to determine the state of the U.S. economy and the direction of interest rates.

On Tuesday, minutes from a December 13 Fed policy-setting meeting suggested rates were near a peak.

But while the minutes featured a statement saying that "additional firming steps required probably would not be large," they also said that "future action would depend on the incoming data."

"The jobs data should tip the scales one way or another," said Andre Bakhos, president of Princeton Financial Group in Princeton, New Jersey.

"As long as the jobs data is construed as benign to the interest rate picture, the market should continue in its new year's uptrend. However, if it comes in threatening continued rate hikes, that could indeed reverse the sanguine outlook that the market took from the Fed minutes," he added.

Standard & Poor's 500 index futures were up 0.5 points, above value, a mathematical formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract.

Nasdaq 100 index futures were up 0.5 points, and Dow Jones industrial average futures were up 5 points.

With a reported rating downgrade on Dow component Microsoft Corp. and a plan by International Business Machines Corp. to move away from a traditional pension plan to save money, the technology sector will be in the spotlight.

Credit Suisse First Boston cut its rating on Microsoft to "neutral" from "outperform," MarketWatch reported on its Web site.

In other research news tied to the technology sector, Goldman Sachs raised its 2005 earnings estimate on Internet search firm Google Inc. to $5.75 a share from $5.68.

The brokerage also raised its 2006 and 2007 profit estimates for Yahoo Inc., the world's largest Internet media site.

IBM said after the market close on Thursday that changes to its U.S. pension plans and changes under consideration in other countries would save $450 million to $500 million in 2006 and $2.5 billion to $3 billion in the years 2006 through 2010, based on year-end 2005 pension assumptions.

On Thursday, the Dow Jones industrial average ended up 2.00 points, or 0.02 percent, at 10,882.15. The Standard & Poor's 500 Index was up 0.02 points at 1,273.48. The technology-laced Nasdaq Composite Index was up 13.41 points, or 0.59 percent, at 2,276.87.

It was the highest close for the Nasdaq since May 2001.

Source: REUTERS

More News in this Category