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 sector.
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.