WALL STREET OUTLOOK Higher on strong results led by Texas Instruments, DuPont

WALL STREET OUTLOOK Higher on strong results led by Texas Instruments, DuPont

	Published : Tue, 24 Apr 2007 13:37 By : Agencies Print this Story

LONDON (Thomson Financial) - Wall Street is looking at a higher open, buoyed by strong quarterly results from a number of bellwether companies led by Texas Instruments and DuPont, but a sales warning from discount retailer Target is likely to give investors some pause for thought.

The market is also awaiting key housing and consumer confidence data.

According to spread bettors IG Index, the Dow Jones Industrial Average is expected to open up 25 points at 12,944.

Yesterday stocks pulled back from record highs as rising oil prices chilled investor enthusiasm for strong earnings reports and new takeover activity.

The blue chip index hit a new all-time high of 12,983.92 before ending the session down 43 points at 12,919.

Economic data will vie with earnings reports for investor attention.

Sales of existing homes are expected to have fallen to 6.49 mln in March from 6.69 mln in the prior month, confirming the persistent sluggishness of the US housing market. The National Association of Realtors releases its report at 3 pm BST.

Consumer confidence is also forecast to have dipped in April. The Conference Board's monthly survey is expected to come in with a reading of 105 from 107.2 in March, according to the average estimate of economists polled by Thomson's IFR Markets. The report is also slated for release at 3 pm BST.

Oil prices fell back slightly, but post-election unrest in oil-rich Nigeria and the ongoing dispute with Iran over its nuclear enrichment program put a floor under the decline.

Traders are also expecting US weekly supply data tomorrow to show a fresh decline in gasoline stocks just as the driving season there gets underway.

New York light sweet crude for June delivery was last off 10 cents at 65.79 usd a barrel.

The US dollar traded little changed against the euro and the British pound, but managed a modest gain against the Japanese yen ahead of this morning's data.

At last check, the euro was off a fraction at 1.3576 usd while the pound dipped slightly to trade at 2.0007 usd. Against the yen, the greenback rose 0.3 pct to 118.76.

In company news, Texas Instruments rallied 2.84 usd, or 8.8 pct, to 35.25 usd in pre-market dealings after the chip maker said it is emerging from an inventory glut and expects stronger growth in the coming months due to rebounding demand for its chips, which are used in a variety of electronic gadgets such as cell phones.

The upbeat prediction came as Texas Instruments handily beat Wall Street's earnings estimates and offered an upbeat second-quarter outlook.

Broker Piper Jaffray upgraded the company to 'outperform' from 'market perform' and lifted its price target to 41 usd from 32 usd, based on stronger-than-expected margins and the positive impact of an improving product mix.

Shares of Advanced Micro Devices Inc fell 44 cents, or 3.1 pct, to 13.60 usd in pre-market trading after it plans to offer 1.8 bln usd in convertible senior notes in a private offering.

The company has been straddled with debt since its 5.4 bln usd acquisition of graphics chip maker ATI Technologies, leading some analysts to speculate that it could be an acquisition target for private equity firms.

On the Dow, DuPont shares could also be set for gains after the chemical group's earnings, excluding one-off items, beat analyst expectations. It also reaffirmed its 2007 outlook.

DuPont's strong results come in the wake of solid earnings from European rival Akzo Nobel.

AT&T shares will likely see early gains after the telecom operator's first quarter earnings, on an adjusted basis, topped Wall Street expectations. It also said it plans to complete its 10 bln usd share buyback scheme in the third quarter of this year.

Retailers may come under pressure after Target Corp said late Monday that its April sales were coming in 'much weaker' than expected, a sign that a month forecast to be tough for retailers may turn out worse than anticipated.

For March and April together, Target said sales from stores open at least a year, -- a key retail barometer -- would rise 3 pct to 4 pct, instead of its previous estimate of 4 pct to 6 pct.

Elsewhere, there was a mixed performance out of Lockheed Martin Corp. The company posted a stronger-than-expected first quarter profit but its revenue for the period fell short of estimates.

Juniper Networks, meanwhile, posted a decline in its first-quarter profit, weighed by costs, although its adjusted earnings met Wall Street expectations. Broker Piper Jaffray downgraded the stock on valuation grounds, adding that the high end of its 2007 revenue guidance of 2.7 bln usd implies a year-over-year growth rate of about 17 pct.

'We believe this might be the peak year given the law of large numbers,' the broker said in a note to clients.

Mark.cotton@thomson.com

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