U.S. stocks open lower; PPI in focus

U.S. stocks open lower; PPI in focus

By Leslie Wines, MarketWatch Sep 13, 2005

U.S. stocks opened lower Tuesday, although investor sentiment was bolstered by news that wholesale prices rose less than expected last month and that the U.S. trade gap unexpectedly narrowed during July. Stocks have been on the rise since this month, and the selling pressure early Tuesday may signal only a small pullback.

The Dow Jones Industrial Average was down 51 points at 10,631, the S&P 500 down 4.93 points at 1,235, and the Nasdaq composite down 8.66 points at 2,174.

Before the opening, the Labor Department reported that wholesale prices increased 0.6% in August, beneath the 0.7% advance expected by analysts polled by MarketWatch.

Core prices, which strip out food and energy prices, were unchanged. MarketWatch had forecast a 0.1% gain in the core rate.

Separately, the Commerce Department said that a record amount of U.S. goods and services sold overseas helped narrow the U.S. trade gap in July despite the record high cost of foreign oil, the government reported Tuesday.

The nation's trade deficit narrowed in the month by 2.6% to $57.9 billion, the Commerce Department said. The MarketWatch forecast was for the deficit to widen to $59.5 billion.

The Treasury market rallied after news of the tamer-than-expected increase in wholesale inflation. The benchmark 10-year Treasury note last was up 9/32 at 100-28/32 with a yield of 4.142%. In closing trade on Monday the yield on the 10-year note rose to a two-week high of 4.17%.

The dollar, benefiting from news of the narrower trade gap, last was up 0.4% at 110.76 yen, while the euro fell 0.04% to $1.2272.

In premarket electronic trade, the October oil future contract closed up 36 cents at $63.70 a barrel. Crude futures this week have fallen from recent historic highs due to expectations for lower demand growth and improving output in the Gulf of Mexico.

The December gold contract last was down $4.60 at $449.10 an ounce. On Monday gold futures logged an eight consecutive higher close, continuing to benefit from indications of strong demand.

Stocks in motion Shares of Ford Motor Co. increased 8 cents to $10 after the car maker proposed buyouts for 5,000 United Auto Workers union members.

Ford and parts maker Visteon also said they reached a definitive agreement to transfer 17 auto parts plants and six other offices to a new Ford-managed entity. Late Monday Ford said it will sell the Hertz rental car unit to private investors for $15 billion.

Shares of mobile phone maker Nokia were 4.4% higher at $16.78. The company lifted third-quarter earnings and sales guidance, noting strong phone device sales volume and only a mild decline in average selling prices.

Nokia's good news lifted the share price of its big supplier, Texas Instruments, which jumped up 1.2% to $33.51.

Supermarket chain Kroger rose 1.2% to $20.49 after the company turned in a sharp rise in second-quarter profit that matched Wall Street's target.

Best Buy shares dropped 7.6% to $46.52 after the nation's largest consumer-electronics retailer said higher costs caused second-quarter profit to fall short of Wall Street's target and will also hurt upcoming earnings.

Shares of Knight-Ridder fell 4% to $62.34 after the company warned that third-quarter earnings from continuing operations will be about 20% below year-earlier levels. The publisher cited a disappointing August, newsprint hikes and unfavorable year-ago comparisons.

Delta Air Lines was down 8% at 78 cents after J.P. Morgan slashed its rating on the carrier to underweight from overweight, predicting that a bankruptcy filing is likely.

This is Thomson Financial's Market Commentary, which is issued three times daily; Pre-Open ( 9:00 a.m.), Post-Open (10:15 a.m.), and Close (5:00 p.m.). The information herein is believed to be true and accurate. We take no responsibility for inaccurate information and reserve the right to update our reports. If you have any questions please e-mail James Sang at james.sang@tfn.com or call 646.822.6233. For more information about Thomson Financial visit us on-line at http://www.thomsonfinancial.com/. For more financial information at your fingertips, please visit http://www.irchannel.com/.

PRNewswire -- Sept. 13

Source: Thomson Financial Corporate Group

Web site: http://www.thomsonfinancial.com/

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