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    Stocks focused on retail, oil

    Weak holiday sales, more oil, Iraq concerns could push stocks lower at open.
    December 23, 2002: 8:42 AM EST
    By Mark M. Meinero and Alexandra Twin, CNN/Money Staff Writers



    NEW YORK (CNN/Money) - U.S. stocks looked to a mixed to lower start in a holiday-interrupted trading week Monday amid last-minute shopping and rising oil prices as the Iraq crisis continues.

    Early indications point to a decline for the major indexes at the start of trading.

    Sure, there were tales of donnybrooks over parking spaces at the local mall. But investors will need to see the hard numbers about the final holiday shopping weekend to determine if the shortened season is a success -- and if that can translate into optimism about the economy.

    There were reports of big crowds throughout the weekend. But some mall managers said the traffic was promotion driven, not particularly promising for the bottom lines of the retailers. And at least one retailer, K-B Toys, says weekend sales were below the company's hopes.

    In its weekly update, Wal-Mart Stores (WMT: Research, Estimates), the world's No. 1 retailer, said it sees December sales at stores open a year or more coming in at the low end of its previous growth range of 3 percent to 5 percent. Shares of the stock fell $1 to $49.79 in pre-market trade Monday.

    In addition, Federated Department Stores (FD: Research, Estimates), the owner of Macy's and Bloomingdale's, warned that same-sale stores for the combined December/January period will miss estimates for flat to a 2.5 percent decline in sales. But the company said that an expected last-minute shopping rush makes it difficult to forecast final results. Shares of the stock gained 70 cents to $28.92 but were expected to decline once stocks open.

    World tension remains a factor in the markets. Over the weekend, the U.S. government said it will share intelligence with international inspectors concerning possible sites where Iraq is developing weapons of mass destruction. The Bush administration says there are omissions in Iraq's recent weapons declaration, adding to the threat of war in the region.

    The Iraq concerns, combined with the ongoing strike at oil fields in Venezuela, drove Brent crude futures up 59 cents to $28.93 a barrel in London.

    All of the major indexes are coming off successful weeks, having gained less than 1 percent. The Dow Jones industrial average begins the week at 8,512 after rising more than 147 points Friday. The Nasdaq composite index starts at 1,363 following a 10-point advance.

    Concern about oil prices sent European markets lower at midday, while Asian-Pacific stocks ended mixed Monday; Tokyo was closed for the celebration of the emperor's birthday.

    Treasury prices rose, sending the 10-year note yield down to 3.94 percent from 3.96 percent late Friday. The dollar slumped against the yen and euro. Gold was close to $344 an ounce.

    Stock futures showed little response to the morning's economic news. Personal income in November rose 0.3 percent, the government said, versus the 0.2 percent rise expected by analysts and after a 0.1 percent boost in October. Personal spending rose 0.5 percent, in line with estimates and compared with 0.4 percent in the prior month.

    In other corporate news, McDonald's (MCD: Research, Estimates) shares fell 54 cents to $15.21 in pre-market trade Monday. Moody's Investors Service said late Friday it may cut the fast-food chain's debt rating after the company said it will post its first-ever quarterly loss.

    Citigroup (C: Research, Estimates), the largest financial services company, said it will take $1.5 billion in charges in the fourth-quarter. The charges will cover the costs of settling the large conflict-of-interest probe into brokers and costs associated with regulatory inquiries into its relationship with bankrupt energy trader Enron and other private litigation. Shares of the stock gained $1.14 to $38.14 Friday.

    Among the stocks to watch Monday is CMS Energy (CMS: Research, Estimates). The utility company said Sunday it is selling its natural gas pipeline business to a venture including Southern Union (SUG: Research, Estimates) for $662 million in cash and more than $1 billion in debt. CMS shares fell 4 cents to $8.61 Friday.

    Another utility company, Duke Energy (DUK: Research, Estimates), was lowered to "underweight" from "equal-weight" by Lehman Brothers because of a negative earnings outlook and credit concerns. Duke shares rose 39 cents to $20.09 Friday.

    But the energy sector could actually see some support Monday, due to the rise in global oil prices.
 
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