Stocks seen higher after inflation data, Adobe
Friday September 15, 8:57 am ET
NEW YORK (Reuters) - Stock futures pointed to a higher market open on Friday after news that U.S. consumer prices rose in line with market expectations in August, calming fears about higher inflation and interest rates.
Shares of Adobe Systems Inc. (NASDAQ:ADBE - News) were up 9.2 percent in early electronic trading at $36.75 as the design software company posted a stronger-than-expected quarterly profit.
The Labor Department reported a 0.2 percent increase in both overall U.S. consumer prices and costs excluding food and energy, in line with expectations, helped by a slower housing market and a pullback in energy prices.
"If you do the math it means inflation is okay and there is no reason for the Fed to raise rates at the next meeting," said Robert Macintosh, chief economist at Eaton Vance Management in Boston.
Investors widely expect the Fed to keep interest rates steady at its September 20 policy meeting, as it did when it last met on August 8 after two years of steady rate hikes.
Standard & Poor's 500 futures (SPZ6) were up 4.9 points, above fair value, a mathematical formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract.
Dow Jones industrial average futures (DJZ6) were up 46 points and Nasdaq 100 (NDZ6) futures were up 11.25 points.
Shares of Ford Motor Co. (NYSE:F - News) fell 7.7 percent to $8.39 before the bell after the automaker said it would cut annual costs by about $5 billion by the end of 2008 and reduce salaried staff by around a third. (ID:nWEN5468). Merrill Lynch cut its rating on Ford to "sell" from "neutral," theflyonthewall.com reported.
Shares of Public Service Enterprise Group Inc. (NYSE:PEG - News) slid 6 percent in early electronic trading to $62.20 as Exelon Corp. (NYSE:EXC - News) said it is walking away from a $17.7 billion takeover of the utility after failing to reach agreement with New Jersey regulators. Exelon shares rose 3 percent to $59.50 before the bell.
Trading may be volatile as Friday marks the end of "quadruple witching," the expiration of four options and futures contracts, which began on Thursday, when most September stock index options and index futures contracts cease trading.
Traders were also expecting more economic news. August industrial production and capacity utilization data are due at 9:15 a.m., The University of Michigan's preliminary September consumer sentiment survey is due at 9:45 a.m. and Federal Reserve Bank of Kansas City President Thomas Hoenig will speak at 11:45 a.m.
(Additional reporting by Chris Sanders)
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