Stock futures are flying following release of the Consumer Price Index which featured an in-line overall rise of .7% in May, but a core reading, which excludes food and energy, that was up a less than expected .1%. The overall CPI was pushed higher by a 5.4% surge in energy prices. Helping to keep the core cool, owners equivalent rent was up by just .1%, and prescription drug prices fell .1%. This report is also boosting sentiment: U.S. June Empire State index at highest level in a year. And the current account deficit, while staggering, rose to $192.6 bln in the 1st quarter vs expectations for a surge to $200 bln.
The economic data as sparked a surge of more than 9 points in S&P futures, so it looks like a third day of gains ahead on Wall Street. Today is expiration Friday - the quarterly "quad witch". As noted earlier in the week, an OEX above the 700 strike at the end of the day could trigger computer driven buy programs. The OEX closed yesterday at 699.82. Look out above if we can get above 705 by the end of the day.
While it's 3 cheers in the stock market, the move in the bond market is on the tepid side with the 10 year treasury up by 7 ticks, the yield slipping below 5.19%. While it's possible to spin it positively seven ways to Sunday, especially by relying on the .1 core number, the overall price rises in both CPI and yesterday's PPI remain alarming given recent worldwide crude production shortfalls and the lower than usual gasoline inventories here in the U.S. that are likely to keep upward pressure on energy prices.
One of the big movers of the day - The New York Mercantile Exchange (NMX): NYMEX explores sale of company: report.
Penn National (PENN), which closed yesterday at just above $51, is being acquired for $67/shr cash. The buyers are affiliates of Fortress Investment and Centerbridge Partners.
Yummy? Coffee and salad: Starbucks to add salads to lunch menu.
Lazard is reiterating a buy on Medtronic (MDT) saying the company may release results of its Endeavor trial at a June 20th analyst meeting.
Blackstone had also bid for Archstone-Smith: WSJ. An interesting little story not so much because Blackstone bid, but because it pulled out and the eventual winner, Lehman and Tishman, lowered their offer as credit market conditions deteriorated.
Intel gets a fresh BUY rating from Goldman Sachs with a target of $28. Goldman says Intel should be able to maintain a lead over AMD as AMD moves toward more outsourcing.
Crude oil is up 30-cents at 67.92. Another meaningful rally in crude could put a damer on things on Wall Street. Crude Oil Rises on Supply Worries.