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Wall St. awaits data
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May 11, 2001: 7:28 a.m. ET
Reports on retail sales, inflation, consumer sentiment to set market tone
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NEW YORK (CNNfn) - Reports on retail sales, inflation and consumer sentiment bombard U.S. investors Friday, with the data expected to be key for the markets until the Federal Reserve meets next week.
Early strength in stock futures was tentative, pending the release of the first reports about an hour before the markets open.
The reports will provide another signal about the strength of the U.S. economy. A week ago, the report on April employment showed considerable weakness. While stocks fell at first after that report, they eventually turned around and rallied on hopes the weakness would convince the Fed to cut interest rates again.
Most economists expect the Fed to cut rates by half a percentage point when the central bank's policy makers meet Tuesday. It has cut rates four times so far this year – by a half point each time – in a bid to prop up growth and prevent a recession in the United States.
Retail sales for April are expected to show a modest increase from the prior month. Economists surveyed by Briefing.com see a 0.2 percent rise, compared with a 0.2 percent drop in March.
The producer price index for April is expected to show a modest rise in inflation at the wholesale level -- although the possibility of a higher number is strong given the sharp spike in gasoline prices in recent weeks. Economists surveyed by Briefing.com expect an increase of 0.3 percent, with a 0.1 percent rise excluding food and energy.
After the markets open, the University of Michigan's consumer sentiment index will be reported by financial news wires. The preliminary figure for May is expected to be 88.5, up slightly from 88.4 in April.
Click here for CNNfn.com's economic calendar
The Dow Jones industrial average stands at 10,910.44 after a 43-point gain Thursday. The Nasdaq composite index is at 2,128.86 following a 1.3 percent decline. The S&P 500 begins at 1,255.18 after ending little changed.
Asian markets closed mostly higher Friday, with Tokyo and Hong Kong posting modest gains. European markets were mostly lower in early trading.
Treasury prices were little changed early Friday. The 10-year note yielded 5.27 percent, while the 30-year bond yield stood at 5.75 percent.
The dollar strengthened against the euro but slipped versus the yen. Brent oil futures fell 28 cents to $28.35 a barrel in London.
 In an insurance industry deal, American International Group (AIG: Research, Estimates) agreed Friday to acquire American General (AGC: Research, Estimates) for about $23 billion in stock. The deal, which trumps a bid made for American General by the British insurer Prudential, values the acquired company at $46 a share, a 3 percent premium from Thursday's closing price of $44.62. American International closed Thursday at $83, down 86 cents.
IBM (IBM: Research, Estimates) Chairman Lewis Gerstner told analysts in New York late Thursday that he believes the path to success for his company lies in information technology rather than hardware or software. He also stated that the company expects to see double-digit percentage annual earnings growth and single-digit percentage revenue growth -- maintaining its emphasis on profitability over market share. IBM shares fell $1.78 to $115.20 Thursday.
Drugmaker Schering-Plough (SGP: Research, Estimates) is mentioned as a possible acquisition target for rival Merck (MRK: Research, Estimates) in a Business Week magazine column. The magazine cites an unnamed investment banker "close to the industry" as saying Merck has proposed a deal valuing Schering at $91 billion, or $65 a share, but that Schering has turned down the bid. Schering stock jumped $2.90 to $40 in before-hours trading Friday, according to Reuters, after falling 80 cents to $37.10 Thursday. Merck fell 80 cents to $76.52 Thursday. 
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