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Stock Futures Steady After Costco Earns

Posted on: Thursday, 12 October 2006, 09:00 CDT

LONDON - U.S. stock market futures held steady Thursday as investors waited on the sidelines ahead of an uptick in earnings announcements and a Federal Reserve economic report, with retailer Costco also in the early focus after its earnings topped forecasts.

Among firms due to announce results, PepsiCo Inc. is expected to report third-quarter per-share income of 86 cents. Domino's Pizza Inc. said that earnings rose 21 percent in the third quarter.

Also due to report, Genzyme Corp. is expected to post income of 71 cents per share for the third quarter and Safeway is expected to come in with earnings of 39 cents for the quarter. Harley-Davidson Inc., with its new ticker symbol, is on the earnings calendar as well.

Dow Jones futures were recently up 5 points, S&P 500 futures were up 0.3 of a point, and Nasdaq futures added 1.2 points.

Stocks fell on Wednesday in a session marked by disappointment over the near-term interest rate outlook and an inauspicious start to earnings season - and spooked by an aircraft crashing into an apartment building in New York. The Dow Jones Industrial Average closed down 15.04 points, having pushed close to Tuesday's all-time high earlier in the session.

The Federal Reserve's Beige Book, a snapshot account of business conditions compiled from the 12 regional Fed banks, will be scrutinized later Thursday for any indicators on how the U.S. economy's reacting to lower energy prices and for possible signs of recovery in the housing market.

Trade-deficit figures are also due for release, with economists polled by MarketWatch expecting the deficit to have declined to $66.4 billion in August from a record $68 billion in July.

The dollar slipped against other major currencies ahead of the data, with the greenback dipping 0.2 percent against Japan's yen at 119.50.

Crude-oil prices continued to slide, with the November-dated light crude contract dipping 25 cents to $57.34 a barrel in electronic trading. A weekly update on U.S. natural gas in storage is due out later Thursday.

Among companies in focus, Costco Wholesale Corp. reported a 1 percent rise in fourth-quarter profit to $355.6 million, or 75 cents a share. Analysts polled by Thomson First Call had expected earnings of 73 cents a share. The club-membership retailer also said it doesn't expect to restate previous results after a review of its stock-options program.

Yum Brands Inc. late Wednesday reported a 20 percent rise in third-quarter earnings to $230 million, or 83 cents a share, thanks to strong growth in Chinese and other international markets.

Lam Research Corp. after Wednesday's close forecast revenue for the quarter ending in December will be in the range of $605 million to $625 million. Analysts' average view as compiled by First Call stands at $602 million.

Also late Wednesday, Healthways Inc. said it has agreed to pay $450 million to buy privately held Axia Health Management, a national provider of preventive health and wellness programs.

European markets moved broadly higher, with Germany's DAX 30 index adding 0.2 percent. Overnight in Asia, Japan's Nikkei 225 average pared moderate gains early in the session to end 0.2 percent lower.

Source: Associated Press/AP Online

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