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Stocks Seen Opening Flat to Higher

Posted on: Friday, 30 July 2004, 06:00 CDT

NEW YORK - U.S. stocks are seen opening flat to slightly higher Friday as investors await the second quarter GDP report.

Dow Jones futures fell 9 points recently, Nasdaq futures were down 1.50 points, and S&P futures dropped 0.50 points.

In London, the FTSE 100 slid 3.20 to 4415.50 recently with Royal & Sun Alliance Insurance Group PLC up 1.2 percent after it announced the sale of its U.K. life operations while Lloyds TSB Group PLC was off 0.7 percent after reporting in line first-half results. Mining stocks continue to post gains as do oil stocks, buoyed by overnight hike in crude to fresh highs.

In Japan, the benchmark 225 Stock Average ended up 208.94 points, or 1.9 percent, at 11325.78 on another day of gains on Wall Street, robust quarterly earnings from Japanese companies, including a first-half profit upgrade from Matsushite Electric Industrial Co. Meanwhile, Sumitomo Mitsui Financial Group, Japan's third-largest bank by assets, said it's considering a rival bid for the nation's No. 4 bank, UFJ Holdings, which was in merger talks with the No. 2 bank Mitsubishi Tokyo Financial Group.

Germany's largest bank, Deutsche Bank, reported a lower-than-expected increase in second quarter profits Friday as investment-banking revenue fell.

In U.S. corporate news, Intel Corp. said after the market close Thursday that it won't meet a high-profile milestone for improving chip performances this year, the latest in a series of miscues and schedule changes that recently prompted an angry message from the company's chief executive.

Target Corp. announced it would sell its struggling Mervyn's discount department-store chain to a group of private-investment firms for about $1.65 billion.

Gilead Sciences Inc.' shares rose 4 percent Thursday after the biopharmaceutical company's second-quarter results rose, driven mainly by sales of its Viread, Hepsera and Emtriva drugs.

Multimedia Games Inc.'s stock dropped 23 percent Thursday, after the company, which makes gaming machines for casinos, issued disappointing fiscal third-quarter results, and lowered its outlook for the second time.

Intersil Corp. shares added 7 percent Thursday after it swung to a second-quarter profit, thanks to strong margins and a 15 percent sales growth.

Meanwhile, Atari Inc. fell 15 percent after reporting a 69 percent decline in first fiscal quarter earnings.

Netgear Inc. shares surged 16 percent in late trading, despite a decline in net earnings, as revenue climbed 28 percent while American Power Conversion Corp.'s shares fell 13 percent after reporting that second-quarter net income fell 19 percent on higher costs despite a surge in revenue.

Another of Thursday's top decliners was THQ Inc., which fell 11 percent after the company posted a wider first-quarter loss on weaker sales.

For Friday, analysts expect American Electric Power Co. to post a second-quarter profit of 43 cents a share when the company reports before the bell Friday, and are also looking for $1.59 from Anadarko Petroleum Corp.

Meanwhile, Wall Street is projecting a profit of $2.73 a share for ChevronTexaco Corp.'s second quarter, due for release before market open and expects a profit of $8.32 a share from Washington Post Co. when it reports second-quarter earnings some time in the morning.

Also slated to report are Constellation Energy Group Inc., Public Service Enterprise Group Inc., Archer Daniels Midland Co. and Milacron Inc.

Wall Street will be watching for the advance second quarter GDP report the Commerce Department is due to release at 8:30 a.m. EDT Friday. Economists are looking for GDP growth to slow to a 3.5 percent annual rate from 3.9 percent in the first quarter. In addition, they look for an acceleration in the inflation rate as measured by the chain-weighted price index to an annual rate of 3.0 percent from 2.9 percent in the first quarter. Benchmark revisions back to the first quarter of 2001 will be released with this report.

Also expected Friday, the University of Michigan will release its final reading of its consumer sentiment index for July to subscribers only around 9:45 a.m. EDT Friday. Economists look for consumer sentiment to edge up to a reading of 96.0 from 95.6 in the final June reading and unchanged from the preliminary July reading.

Markets will be watching the Chicago National Association of Purchasing Management's July reading of the purchasing managers index at 10:00 a.m. EDT on Friday. Economists look for the index to increase to a reading of 60.0 from 56.4 in June.

The Dow Jones Industrial Average climbed 12.17, or 0.12 percent, to 10129.24 while the Nasdaq Composite Index finished the session up 22.80, or 1.2 percent, to 1881.06. The Standard & Poor's 500 Index climbed 5.01, or 0.5 percent, to 1,100.43.

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