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US stocks head for higher open as oil declines

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[June 17, 2008]  NEW YORK (AP) -- U.S. stocks headed for a higher open Tuesday as oil prices declined and as investors awaited economic figures on inflation at the wholesale level and the housing market.

RestaurantWall Street is also expecting a report on industrial production.

An hour before the opening bell investors will be looking for figures to show that the producer price index, which measures wholesale and raw material prices, rose in May. The Labor Department's index will likely draw particular attention this month because investors are looking for signs of whether increased costs for a range of commodities, including oil, will force companies to pass along higher costs to customers.

The report follows government figures last week that show consumer prices rose slightly more than expected last month, partly because of spiking energy prices.

Wall Street is worried that rising energy costs, which affect almost all other costs, are going to prove too much for U.S. consumers who are already strapped by an uncertain economy and a weak housing market. Investors are worried that consumers will be forced to trim discretionary spending, a troublesome prospect as consumer spending accounts for more than two-thirds of U.S. economic activity.

A Commerce Department report on home construction and building permit applications is expected to show a decline for May. A drop would follow an unexpected increase last month.


Wall Street also will be looking to quarterly results due from Goldman Sachs Groups Inc. Investors have credited the investment bank with largely sidestepping the problems with faulty credit that have forced other big names on Wall Street to seek capital injections to shore up balance sheets. But attention is focusing early Tuesday on a Financial Times report that Goldman is close to finalizing a plan to restructure a $7 billion investment known as a structured investment vehicle.

Still, the pullback in oil prices appeared to dominate investors' mood.

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Light, sweet crude fell $1.70 to $132.91 per barrel in premarket electronic trading on the New York Mercantile Exchange.

Dow Jones industrial average futures rose 50, or 0.41 percent, to 12,312. Standard & Poor's 500 index futures advanced 7.40, or 0.54 percent, to 1,367.40, and Nasdaq 100 index futures rose 9.20, or 0.46 percent, to 1,999.50.

Bond prices fell. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 4.20 percent from 4.27 percent late Monday. The dollar was mixed against other major currencies, while gold prices rose.

Overseas, Japan's Nikkei stock average fell 0.04 percent. In afternoon trading, Britain's FTSE 100 rose 1.69 percent, Germany's DAX index was up 1.37 percent, and France's CAC-40 rose 0.91 percent.


On the Net:

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

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

[Associated Press; By TIM PARADIS]

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.




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