US STOCKS-Wall St to start slightly higher on data, profits
Wed May 7, 2008 9:07am EDT
(Adds reaction to productivity, labor cost data)
By Jennifer Coogan
NEW YORK, May 7 (Reuters) - U.S. stocks looked set to start the session slightly higher on Wednesday after productivity and labor costs data eased inflation worries and Walt Disney Co (DIS.N: Quote, Profile, Research) and Cisco Systems Inc (CSCO.O: Quote, Profile, Research) posted higher-than-expected earnings.
Futures edged higher after government data showed higher-than-expected productivity gains and a lower-than-expected rise in unit labor costs, quelling inflation fears amid the run-up in crude prices.
"It's positive on the inflation front," said Doug Roberts, chief investment strategist at Channel Capital Research in Shrewsbury, New Jersey. "It gives (Bernanke) a little bit more leeway and actually bodes well for the future core inflation numbers."
S&P 500 futures SPc1 were up 0.3 point but above fair value, a mathematical formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract.
Dow Jones industrial average futures DJc1 rose 1 point, and Nasdaq 100 NDc1 futures were down 1.25 points.
Disney shares were up 2.3 percent to $34.50 before the opening bell after the media and entertainment company posted a 22 percent rise in quarterly profit late on Tuesday. For details, see [ID:nN06510312].
Cisco stock rose 2.4 percent to $26.96 after it posted profit that topped estimates as rising Internet traffic fueled demand for its networking equipment. [ID:nN06305666].Chief Executive John Chambers, however, gave a cautious outlook for the U.S. market.
Crude oil at near-record highs could pose an obstacle for Wall Street. Oil prices were little changed but down from Tuesday's record high of $122.73 a barrel, threatening to slow business activity and strain consumers' pocketbooks.
Weekly U.S. government supply figures are set for release at 10:30 a.m. (1430 GMT) and are expected to show higher inventories of crude for the third straight week. (Editing by Kenneth Barry)
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