Wall Street Points to Moderately Higher Open

By: AP
By: AP

NEW YORKWall Street pointed to a moderately higher open Tuesday as investors awaited reports on the nation's housing industry and the broader economy.

While the reports are expected to show further weakness, investors have likely already priced in very low expectations.

The Commerce Department will release its final gross domestic product figures for the third quarter at 8:30 a.m. EST. Analysts believe the overall economy contracted slightly in the July-September quarter. The concern, however, is that the current quarter will be much worse.

Wall Street expects that GDP, the country's total output of goods and services, fell at an annual rate of 0.5 percent in the third quarter. That would be in line with the estimate for GDP made a month ago.

Later Tuesday morning, the Commerce Department will report on last month's new home sales, while the National Association of Realtors will report on existing home sales. Economists forecast that both will show declines.

Analysts largely believe that investors have factored in very weak economic readings for the previous and current quarters, and instead are looking ahead to 2009 for any signs of improvement. But such signs have been difficult to find as major corporations release bleak outlooks for next year.

Dow Jones industrial average futures rose 21, or 0.25 percent, to 8,560. Standard & Poor's 500 index futures added 2.00, or 0.23 percent, to 873.30, while Nasdaq 100 index futures rose 1.00, or 0.08 percent, to 1,198.00.

In corporate news, Unisys Corp. said late Monday it will slash 1,300 jobs worldwide as part of an effort to cut costs by more than $225 million a year. The technology services provider has struggled as demand for its services has fallen. Layoffs have been of particular worry for Wall Street, as more and more companies pare their work forces amid the worsening economy. The government lost more than half a million jobs in November. The concern is that as unemployment rises, spending declines and credit deteriorates.

On Monday, stocks fell moderately as investors pulled back on discouraging news from Toyota Motor Corp. and drugstore operator Walgreen Co. — two companies that have been viewed as better-positioned than many of their peers. The announcements provided fresh evidence that even stronger companies are not immune to a severe drop in consumer spending.

Trading volume was light, and is expected to remain so the rest of this week as investors head into the holidays. Analysts are mindful that light volume tends to skew the market's movements, and warned that this week may not suggest any long-term trends.

Bond prices were mixed early Tuesday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 2.15 percent from 2.17 percent late Monday. The yield on the three-month T-bill, considered one of the safest investments, rose slightly to 0.03 percent from 0.02 percent late Monday.

The dollar was mixed against other major currencies, while gold prices fell.

Light, sweet crude rose 35 cents to $40.26 a barrel in electronic trading on the New York Mercantile Exchange.

Overseas, Japan's Nikkei stock average rose 1.57 percent. Hong Kong's Hang Seng index fell 2.75 percent. In afternoon trading, Britain's FTSE 100 was up 0.42 percent, Germany's DAX index was up 0.29 percent, and France's CAC-40 was up 0.23 percent.


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