Fed chairman's comments, favorable inflation data poised to lift stocks again after overseas gains.
June 16, 2004: 7:17 AM EDT
NEW YORK (CNN/Money) - Stocks were poised to open higher Wednesday, a day after the latest reading on inflation and comments from Federal Reserve Chairman Alan Greenspan allayed concerns about a faster increase in interest rates.
S&P and Nasdaq futures pointed to a slightly higher start for stocks on Wall Street, following sold gains in Asia and a higher start in Europe. U.S. stocks rallied Tuesday.
Tokyo stocks jumped 2.2 percent Wednesday after Tuesday's U.S. consumer price index and testimony by Greenspan at his reconfirmation hearing reassured investors on rates, while European markets opened higher as well.
U.S. software provider Oracle (ORCL: Research, Estimates) bucked the trend, sinking almost 4 percent in Frankfurt trading despite reporting better-than-expected fourth quarter earnings after the close Tuesday, but also reporting disappointing sales of new software, particularly in the applications business.
The CPI and Greenspan's remarks that the nation's economy was poised for growth without a significant threat of inflation both led investors to conclude that the Fed would raise short-term rates just a quarter-point when the central bank's policy-makers meet June 30.
More economic numbers are due Wednesday, including housing starts and industrial production.
Treasury bond prices edged lower early Wednesday after a strong gain Tuesday, sending the yield on the 10-year note up to 4.72 percent from 4.68 percent late Tuesday. Bond prices and yields move in opposite directions.
The dollar rose against the euro and the yen.
The Dow Jones industrials rose 0.4 percent Tuesday while Nasdaq climbed 1.3 percent and the S&P 500 index rose 0.6 percent. (Click on the chart for more details).
Oil prices edged higher Wednesday after an oil company security chief was shot to death in Iraq and Iraqi oil facilities were attacked.
U.S. crude futures edged higher, though prices remained well below the record highs set early last week. Futures rose 12 cents to $37.31 a barrel; Brent oil futures gained 17 cents to $35.20 a barrel in London.
In corporate news, casino operator Mandalay Resort Group (MBG: Research, Estimates) accepted a $4.8 billion offer from rival MGM Grand (MGG: Research, Estimates) late Tuesday, a deal that would create the world's largest gaming company.
MGM will pay $71 cash for Mandalay shares, as well as assuming $2.5 billion in debt and $600 million in convertible debt, Reuters reported. Shares of Mandalay gained 62 cents to $68.50 in after-hours trading before the deal was announced, after rising 28 cents in regular-hours trading Tuesday.
Golf equipment maker Callaway Golf (ELY: Research, Estimates) fell $2.94, or nearly 20 percent, to $12 in after-hours trading after the company sharply trimmed its second-quarter revenue and earnings forecasts on weak sales of titanium golf clubs, a decline in Japanese business and a bigger-than-expected loss in its Top-Flite line.
Earnings are due Wednesday from brokerage firm Bear Stearns (BSC: Research, Estimates), tire maker Goodyear Tire & Rubber (GT: Research, Estimates) and electronics retailer Best Buy (BBY: Research, Estimates).
According to the surveys of analysts by earnings tracker First Call, ear Stearns is forecast to have earnings per share and revenue both edge up 9 percent, while Goodyear is forecast to cut its loss per share by 60 percent to 23 cents. Best Buy's consensus EPS forecast is 33 cents, up from 21 cents a year earlier.
On the economic front, economists forecast housing starts probably slipped to an annual rate of 1.95 million for May from 1.97 million in April, according to a survey by Briefing.com, while building permits are forecast to edge down to a rate of 1.97 million from 2.01 million.
Industrial production is expected to be up 0.8 percent in May, the same as the gain posted in May. Factories are forecast to have operated at 77.4 percent of capacity, up from 76.9 percent in April.
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