WALL STREET OUTLOOK Mixed as JP Morgan results, P&G upgrade offset weak Intel

WALL STREET OUTLOOK Mixed as JP Morgan results, P&G upgrade offset weak Intel

	Published : Wed, 17 Jan 2007 14:24 By : Agencies Print this Story

NEW YORK (AFX) - Wall Street is looking at a mixed open as a disappointing profit-margin outlook from Intel Corp weighs on the technology sector, but JP Morgan's strong quarterly results and a broker upgrade for Procter & Gamble are likely to provide some support.

Investors are also awaiting key wholesale inflation data.

Spread bettors IG Index expect the Dow Jones Industrial Average to open around 5 points higher at 12,587. Separately, Nasdaq 100 futures fell 1.75 points to 1,854, while S&P 500 futures tacked on 1.50 points to 1,440.20.

Yesterday, stocks ended mixed as investors weighed the fallout over the recent slump in oil prices and the outlook for corporate earnings, but the Dow Jones Industrial Average still managed to eke out a record close for the third straight session.

The latest report on producer prices is likely to set the tone for today's trading.

Producer prices are expected to have risen 0.4 pct in December after surging 2 pct in November, the biggest monthly gain for the index since 1974, according to economists polled by Thomson's IFR Markets.

Core producer prices, which exclude volatile food and energy prices, are forecast to increase 0.2 pct versus 1.3 pct in the prior month. The report is due at 8.30 am.

Industrial production, meanwhile, is seen edging up 0.1 pct in December after a 0.2 pct gain in November when the Federal Reserve releases figures at 9.15 am, according to IFR Markets. Capacity utilization is forecast to come in unchanged at 81.8 pct.

Later in the session, the central bank also releases its Beige Book of current economic conditions.

Crude-oil futures continued to languish at their lowest levels since May 2005 after Saudi Arabia indicated that it would not back an emergency meeting of OPEC aimed at propping up slumping prices.

New York light sweet crude for February delivery was down 23 cents at 50.98 usd a barrel in electronic trading.

The US dollar fell against the Japanese yen amid speculation the Bank of Japan could announce an interest rate increase on Thursday.

The greenback was little changed against the euro and moved lower against the British pound as sterling continued to benefit from data yesterday showing a sharp rise in UK inflation.

The dollar was down 0.2 pct against the yen to stand at 120.51. The euro was virtually unchanged at 1.2918 usd while the British pound gained 0.3 pct to stand at 1.9669.

Gold futures traded lower as the weakness in the price of oil sapped investment interest in the precious metal. An increase in oil prices sparks concern about inflation and gold is traditionally viewed as a safe haven investment in times of rising prices.

The benchmark February contract was last down 2.80 usd at 623.10 usd an ounce.

In company news, shares of Intel Corp tumbled 1.05 usd, or 4.7 pct, to 21.22 usd in pre-market dealings after the world's largest chipmaker offered up a first-quarter gross margin forecast that disappointed analysts.

The company, a Dow component, said it expects revenue for the first quarter of 2007 to be between 8.7 bln usd and 9.3 bln usd, and that the gross margin for the full year is expected to be about 50 pct, plus or minus a few percentage points.

Its outlook comes after it posted fourth-quarter earnings that topped Wall Street estimates.

Intel's profit margins have been hurt in part by a fierce battle for market share with smaller rival Advanced Micro Devices Inc.

AMD warned last Friday that lower chip prices would weigh on its fourth-quarter results, sending the stock tumbling.

Gains for Procter & Gamble are likely to provide some support to the Dow. Broker Goldman Sachs upgraded the household products and beauty care group to 'buy' from 'hold' and set a 71 usd price target.

Analyst Amy Low Chasen said the company's current business coupled with the recent slide in the price of oil and the US dollar 'should provide Procter & Gamble with even more P&L flexibility to achieve or exceed Street expectations.'

Elsewhere on the blue-chip index, JP Morgan posted fourth-quarter results that came in ahead of Wall Street expectations.

After Centex yesterday, Lennar Corp became the latest home builder to suffer from the slowdown in the US housing market.

The company swung to a fourth-quarter loss and said it expects housing deliveries will decline more than 20 percent this year.

Mark.cotton@thomson.com

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