EUROPEAN MIDDAY BRIEFING FROM DOW JONES NEWSWIRES
29-08-2008 13:02:00
AMERICAN MARKETS OUTLOOK: U.S. stocks are likely to retreat slightly at the open, knocked by Dell's worse-than-expected earnings report and a rise in oil prices, with Tropical Storm Gustav bearing closer to the Gulf of Mexico.
A busy economic calendar features income, spending, and the PCE inflation gauge for July, the August Chicago purchasing managers survey, and revised University of Michigan consumer sentiment for August.
"Friday sees more key economic data with the main number being the PCE deflator and any hint that inflationary pressures may be easing will be welcomed with open arms as many may be forced in to some end of month profit taking and position jostling," said Ian Griffiths, a dealer at U.K. spreadbettor CMC Markets.
At 1035 GMT, S&P 500 futures were down 2.8 points at 1295.3, Nasdaq 100 futures were down 3 points at 1902.5 and Dow industrial futures were down 17 points at 11678.
EUROPEAN MARKETS: European markets are flat to slightly higher midday, remaining relatively unchanged on the back of some euro zone economic data. Euro zone jobless rate remained fairly stable in July, while CPI flash estimate came in broadly in line with expectations, up 3.8% versus market expectations of a 3.9% increase. Investors are pausing for breath after pushing shares higher in the previous session, and as oil continues to rise. Strong earnings from French companies Carrefour and PPR provide a bit of cheer, with Carrefour shares climbing 4.9%. The French supermarket giant said that its first-half profit climbed 1.2% to 750 million euros ($1.1 billion) and stated that it expects to meet its full year targets.
At 1035 GMT, London's FTSE 100 was up 0.4% at 5624.5, holding steady, with gains for selected banks and oil-sector firms offsetting weakness for Kazakhmys, Vodafone and Enterprise Inns. Shares of HBOS rose 2.5% and shares of Alliance & Leicester advanced 1%. However, Bradford & Bingley shares weakened 0.5% after the buy-to-let specialist swung to a first-half net loss of GBP17.2 million ($31.4 million) from a profit of GBP129 million a year earlier.
In Frankfurt the DAX was flat, up just 0.1% at 6424.42, amid thin volumes, as the market needs time to digest accrued gains, traders say. Commerzbank bank fell 1.2%, while Allianz added 1.2% after media reports that the parties have agreed "in principle" to a sale of Dresdner Bank. Infineon fell 0.9% and Deutsche Boerse dropped 1.7% on profit-taking. Automotive stocks are down, with Daimler down 1.4%, Volkswagen down 0.9% and BMW falling 0.6%.
In Paris the CAC 40 was up 0.5% at 4483.18.
Bunds and gilts maintain earlier price gains after lower-than-expected euro zone inflation data. At 1025 GMT, September bunds were up 0.32 at 114.47 and December gilts were up 0.19 at 112.05.
Another rise in crude oil prices is pushing the dollar lower in Europe Friday. However, the U.S. currency's losses were limited by fresh optimism over the U.S. economy after Thursday's better-than-expected second-quarter gross domestic product figures. At 1025 GMT, the dollar was down at Y108.70, the euro was up at $1.4740, while the pound was down at $1.8275.