all Street headed to a higher opening on Tuesday after a better-than-expected report on retail sales and comments from Federal Reserve Chairman Ben Bernanke that turmoil in the financial markets have eased.
The Commerce Department reported that retail sales fell in April as consumers cut back spending because of soaring gasoline prices and a slumping economy. However, excluding sales of automobiles, retail sales had a better performance than economists expected.
That helped to energize investors that perhaps the consumer, who accounts for two-thirds of the economy, might be faring better than some had expected. Retail sales are the clearest indicator of the impact that rising food and energy prices are having on the economy.
Investors got another read on the consumer after Wal-Mart Stores Inc. reported first-quarter profit above Wall Street forecasts. However, the world's largest retailer, often a barometer of consumer spending in the U.S., forecast that the current quarter will come in below expectations.
Meanwhile, Bernanke said during a speech at the Atlanta Fed's Financial Markets Conference that turmoil in financial markets have eased somewhat, but the situation is still ''far from normal.'' He noted some improvements in the markets for certain mortgage-backed securities, such as those backed by Fannie Mae and Freddie Mac, as well as some fixed-rate mortgages and corporate debt.
Wall Street was also energized by dealmaking. Hewlett-Packard Co. said it would buy Electronic Data Systems Corp. for $12.6 billion to build a technology-services company that could challenge IBM.
Dow Jones industrial average futures rose 26, or 0.21 percent, to 12,890. The move would extend a rally on Monday as oil prices fell back and alleviated some of investors' concerns about accelerating inflation.
On Tuesday, light, sweet crude fell 16 cents to $124.07 per barrel in premarket electronic trading on the New York Mercantile Exchange. Monday's trading high of $126.40 a barrel was the sixth record in six trading sessions.
Bond prices fell. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.82 percent from 3.80 percent late Monday.
In corporate news, Staples Inc. raised its hostile bid to acquire Dutch rival Corporate Express NL.
Luxury home builder Toll Brothers Inc. said preliminary results show homebuilding revenue fell 30 percent in its fiscal second quarter amid a weak spring selling season. The company also expects to continue to face ''challenging times'' ahead, given soft conditions in most markets.
Overseas, Japan's Nikkeistock average fell 1.53 percent. In morning trading, Britain's FTSE 100 was down 0.58 percent, Germany's DAX index fell 0.05 percent, and France's CAC-40 shed 0.03 percent.
05/13/2008 09:01 AM
By JOE BEL BRUNO AP Business Writer
NEW YORK
all Street headed to a higher opening on Tuesday after a better-than-expected report on retail sales and comments from Federal Reserve Chairman Ben Bernanke that turmoil in the financial markets have eased.
