U.S. futures point to solid start

U.S. futures point to solid start
EMS upgrades, crude below $46 bolster stocks
By Emily Church, CBS.MarketWatch.com
Last Update: 6:50 AM ET Aug. 24, 2004
LONDON (CBS.MW) - U.S. stocks were headed for a solid start on Tuesday as crude oil futures held below $46 a barrel in the early trade and amid broker confidence on two tech manufacturing stocks.
The Dow industrials were up 28 points at 10,109 ahead of 7 a.m. Eastern; the S&P and Nasdaq futures were each a few points higher.
"The markets have started to take the oil price above $40 on board for the intermediate term and are looking at earnings again, and there have been suggestions that earnings around the world are starting to be upgraded," said Richard Batty, global strategist for Standard Life Investments.
Auto and airline stocks, two sectors correlated to the oil price, were higher in European markets. Tech stocks bolstered the Nikkei overnight.
Dealers in London said few underlying U.S. stocks were seeing much trade in the early going.
Focus stocks
Thomas Weisel overnight raised its rating on contract manufacturers Celestica (CLS: news, chart, profile) and Sanmina-SCI (SANM: news, chart, profile) to outperform from peer perform, citing its expectations for better margins, end markets and improving IT spending in the fourth quarter.
On Celestrica, the broker said: "With a new CEO in place, an achievable restructuring program and heavy exposure to IT spending, we believe the current fiscal 2005 consensus earnings per share estimate of 90 cents is low."
Regis Corp. (RGS: news, chart, profile) affirmed its full-year financial targets, including growth in revenue before acquisitions of 7 to 8 perent and projected earnings of $2.43 to $2.47 per share.
Cisco Systems (CSCO: news, chart, profile) is an expected focus stock after the networker overnight detailed its options grants in a Securities and Exchange Commission filing.
UBS overnight lowered its stock price target on Cisco by $1 to $20, citing the option expensing. The fiscal 2005 options grant represents 2.34 percent of diluted shares at the end of July 2004, compared to 1.98 percent of diluted shares at the end of July 2003, the broker said. UBS is forecasting 78 cents a share in stock option adjusted earnings for calendar 2005, down its earlier projection at 82 cents.
Robert LeFort, head of the U.S. division of Infineon Technologies (IFX: news, chart, profile), projected the U.S. chip market is not likely to hit expectations for growth of 25 percent to 30 percent in 2004 because of the dollar and oil prices. In an interview with the German newspaper Die Welt, he said that it may be possible to reach that growth rate by 2006.
LeFort added that Infineon's 300mm Richmond, Va., plant will come on-stream in the first half of 2005. U.S. sales represent about a quarter of Infineon's revenue.
Banco Santander (STD: news, chart, profile), in an attempt to quell talk it might abandon its 8.3 billion pound bid ($15 billion) for U.K. mortgage lender Abbey National (UK:ANL: news, chart, profile), said it wouldn't necessarily pull out if a competing offer triggered a review by competition regulators.