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Stocks Seen Opening Slightly Up, TI Helps

Tuesday, July 22, 2003 8:02 a.m. ET

By Vivian Chu

NEW YORK (Reuters) - U.S. stocks are poised to open slightly higher on Tuesday, lifted by better than expected results from Texas Instruments <TXN.N> and Corning Inc. <GLW.N>

Despite a firmer open, some traders cautioned that stock markets could decline later, given the hefty rally over the past four months as Wall Street digests a deluge of earnings reports. On Monday, the S&P 500 index closed at its lowest level in about three weeks but has still climbed roughly 22 percent from its year-low hit on March 11.

"There are no economic numbers today and earnings loom large. Texas Instruments and Corning did better than expected, so that's influencing the open," said Larry Wachtel, senior vice president at Prudential Securities.

"But the basic problem is that this long bull market has to correct itself. I don't see any definitive trend but the market moving sideways and digesting its gains."

Standard & Poor's 500 stock index futures were up 4 points at 982, while Nasdaq futures rose 11.50 points to 1253. Futures for the Dow industrials were up 27 points at 9110.

Investors' focus will rest squarely on corporate earnings. This week marks the busiest five days for corporate America's quarterly reporting season, with about a third of the companies in the Standard & Poor's 500 index <.SPX> due to issue results this week.

Investors are scrutinizing companies' earnings and outlook for signs that an economic upswing is firmly under way.

Texas Instruments Inc. <TXN.N>, the No. 1 maker of semiconductors for mobile phones, reported quarterly sales and earnings that beat its lowered outlook from a month ago, helped by a recovery in wireless sales. Still, TI said the market for cellular handsets was still saddled with some excess inventory and gave a cautious outlook.

On Monday, Corning Inc.<GLW.N>, the world's largest maker of fiber-optic cable, reported a quarterly net loss but beat Wall Street forecasts due to strong demand for products such as liquid crystal display glass panels.

Marsh & McLennan Cos. Inc. <MMC.N>, the world's No. 1 insurance broker, reported higher quarterly earnings Tuesday as higher insurance-related fees offset lower earnings from money management.

Makers of semiconductor production equipment could get a boost after Lehman Brothers upgraded its rating on Novellus Systems Inc., <NVLS.O> Lam Research Corp. <LRCX.O> and Applied Materials Inc. <AMAT.O> to "overweight" from "equal weight."

Overseas, European stock indexes were flat, weighed by telecom issues such as France Telecom <FTE.PA> after Credit Suisse First Boston downgraded the European telecoms sector.

The FTSE Eurotop 300 index <.FTEU3> of pan-European blue chips edged up 0.2 percent at 852 points, while the narrower DJ Euro Stoxx 50 index <.STOXX50E> crept up 0.35 percent to 2,428.

Japan's stock market closed at three-week lows, as blue chips came under pressure after Wall Street's decline and a sell-off in U.S. bonds stoked fears that foreigners would flee the market.

The Nikkei average <.N225> ended Tuesday down 0.44 percent at 9,485.97, falling for four of the past five sessions and sinking to its lowest close since July 1.

U.S. stocks fell sharply on Monday, with technology stocks bearing the brunt of the selling, hurt by a profit warning from printer maker Lexmark International Inc. <LXK.N> and a bearish call on cell phone maker Motorola Inc. <MOT.N>.

The Dow Jones industrial average <.DJI> lost 91.46 points, or 1 percent, at 9,096.69, while the broader S&P 500 fell 14.52 points, or 1.46 percent, to 978.80. The technology-laden Nasdaq Composite Index <.IXIC> gave up 27.09 points, or 1.59 percent, to 1,681.41.


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