Wall Street heads to higher open

[July 02, 2008]  NEW YORK (AP) -- Wall Street looked to open cautiously higher Wednesday ahead of a report on factory orders that could give another glimpse of how the economy is faring.

The Commerce Department is expected to report that factory orders slowed in May as shrinking demand drove up inventories across the country. The report, due at 10 a.m. EDT, is expected to show that orders rose by 0.6 percent, according to a consensus of Wall Street economists surveyed by Thomson Financial.

The concern in the market is that slowing orders will provide further evidence that higher energy prices are eroding consumer demand for discretionary items -- everything from big screen televisions to clothing. Consumer spending makes up more than two-thirds of the U.S. economy.

Oil extended its advance Wednesday. A barrel of light sweet crude rose 45 cents to $141.42 in premarket trading on the New York Mercantile Exchange amid fears about tight supply and tensions in the Middle East.

The Energy Department releases it weekly report on oil and fuel inventories later Wednesday morning; the report generally causes some volatility in oil trading.

Ahead of the opening bell, Dow Jones industrial average futures rose 45, or 0.46 percent, to 11,424. Standard & Poor's 500 index futures rose 7.50, or 0.58 percent, to 1,293.70, and Nasdaq 100 futures rose 14.25, or 0.76 percent, to 1,883.25.

Bond prices were little changed Wednesday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 4.03 percent from 4.01 percent late Tuesday. The dollar slipped versus other major currencies, while gold prices rose.

In corporate news, Microsoft Corp. has approached other media companies about a bid to acquire Yahoo Inc., according to a report in The Wall Street Journal.

Starbucks Corp. announced late Tuesday it will close 600 company-operated stores in the next year because of the faltering U.S. economy. The company said 70 percent of those slated for closure opened after the start of 2006.

And Blockbuster Inc. said it is withdrawing its proposal to buy Circuit City Stores Inc. Blockbuster said the proposed deal, at a price of more than $1 billion, didn't make sense because of market conditions.

Overseas, Japan's Nikkei stock average fell 1.31 percent. In morning trading, Britain's FTSE 100 rose 1.38 percent, Germany's DAX index added 1.11 percent, and France's CAC-40 rose 0.50 percent.

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On the Net:

New York Stock Exchange: http://www.nyse.com/

Nasdaq Stock Market: http://www.nasdaq.com/

[Associated Press; By JOE BEL BRUNO]

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