wall street seen rising, inflation number eyed

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    Wall Street seen rising, inflation number eyed
    22:08, Monday, 31 October 2005

    By Marie Maitre

    PARIS, Oct 31 (Reuters) - A flurry of takeover activity is
    likely to feed fresh share gains on Wall Street Monday, but
    investors will eye core U.S. inflation numbers ahead of the
    Federal Reserve's interest-rate setting meeting on Tuesday.

    Chiron will nab the spotlight after Novartis
    said it had agreed to acquire all the remaining public
    shares of the U.S. company it does not own for $45.00 per share
    in cash, or a total of $5.1 billion.

    News that Japan's Orix <8591.T> will buy U.S. investment
    bank Houlihan Lokey Howard & Zukin for about $500 million may
    prop up banks, while Telefonica's $31.6 billion deal to
    buy British mobile phone group O2 Plc is likely to spur
    hopes of further consolidation in the U.S. telecoms industry.

    Kellogg , the world's largest manufacturer of breakfast
    cereals, health insurer Humana and Sysco , a
    distributor of food and other supplies to restaurants and other
    meal providers, top Monday's earnings agenda.

    Investors are keenly watching companies' earnings outlooks.
    The majority have been cautious so far as high energy costs
    crimp profits and hurt household budgets.

    By 1045 GMT, U.S. stock futures were pointing to opening
    gains of between 0.1 percent and 1.5 percent for the three main
    indexes , with market watchers citing
    end-of-the-month window dressing as another element of support
    for equity markets.

    On Friday, U.S. stocks rallied, giving the Dow average its
    biggest one-day point rise since April as a government report
    showed third-quarter economic growth that exceeded expectations
    and as Microsoft's earnings lifted the technology

    Investors are now looking for any whiff of inflation in
    either the Personal Consumption Expenditure (PCE) index due at
    1330 GMT or the manufacturing survey from the Institute for
    Supply Management due on Tuesday.

    The Federal reserve is widely expected to raise U.S.
    interest rates by another 25 basis points to 4.0 percent at a
    meeting on Tuesday and repeat its hawkish message to markets.

    Inflation worries have pounded stock markets worldwide in
    the past four weeks, but robust economic data such as Friday's
    U.S. GDP growth report could help mend sentiment by showing that
    the world's largest economy is strong enough to withstand higher
    oil prices and interest rates.

    Back on the corporate stage, Brookfield Homes could
    be under pressure. Its shares dipped 1.6 percent after the
    closing bell on Friday after the homebuilder reported its
    third-quarter results.

    ((Reporting by Marie Maitre

    Editing by Jane Baird

    Reuters messaging:

    rm://[email protected]

    Email: [email protected]

    Telephone: +33 1 4949 5331))

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