Intel, Fed affect Wall St.

January 31, 2002 Posted: 1357 GMT

NEW YORK (CNN/Money) -- U.S. stock futures were mixed to higher Thursday, as an upgrade of influential tech name Intel and the afterglow of the Federal Reserve's decision to kept interest rates steady were seen dominating investors attention as the opening bell approached.

Two key economic numbers due Friday will also distract investors: the January jobs report and the Institute of Supply Management's figures on manufacturing activity.

The Fed ended a run of 11 cuts with Wednesday's decision to hold short-term rates steady. It also gave its first upbeat assessment of the U.S. economy in more than a year; that confirmation, coupled with surprising growth in the U.S. economy in the fourth quarter, helped lift Wall Street to a strong finish.

"The economy looks good. Greenspan told us that," Vince Farrell, chairman of Victory Capital Management, told CNNfn's CNNmoney Morning.

Now, investors will wait for Friday's key reports. The unemployment rate is expected to rise to 5.9 percent from 5.8 percent in December, according to the consensus of economists surveyed by Briefing.com. The ISM manufacturing index is forecast to rise to the magic number of 50, the line pointing to growth in the sector, for the first time in 18 months.

Intel was active and higher in early trade after influential Merrill Lynch analyst Joe Osha upgraded the stock to "near-term strong buy" from "buy," saying that the company will see stronger than expected market share gains and improving visibility over the next several quarters.

Osha raised Intel's 2002 estimates to earnings of 73 cents per share from 70 cents and kept the price target at $42. Shares of Intel (INTC: Research, Estimates) rose 84 cents to $34.70 in before-hours trading.

The Dow Jones industrial average begins the session at 9,762.86 following Wednesday's 144-point advance. The Nasdaq composite index starts at 1,913.44, having risen 20 points, while the Standard & Poor's 500 index starts at 1,113.57 after a nearly 13-point gain.

Wall Street's gains lifted most Asian stock markets to a higher close Thursday. European stocks were higher at midday.

Treasury prices were little changed, with the 10-year note yield at 5.02 percent. The dollar was mostly flat against the euro and was a little higher versus the yen. Brent oil futures rose 11 cents to $18.90 a barrel in London.

On the economic front, consumer spending fell 0.2 percent in the United States in December while new jobless claims rose by 30,000 to 390,000 last week, the government said, offering results that were close to Wall Street estimates. December personal income rose 0.4 percent, a shade above forecasts.

Dow component Procter & Gamble (PG: Research, Estimates) reported a second-quarter profit Thursday of $1.03 a share -- excluding a charge – up from the 97 cents a share earned one year earlier. That was a penny a share better than what analysts had been looking for. P&G shares rose 77 cents to $78.29 Wednesday.

No. 1 toymaker Mattel (MAT: Research, Estimates) reported Thursday fourth-quarter net income of 33 cents per share, an improvement on the 28 cents per share earned in the same quarter one year earlier, but a penny shy of analysts' estimates. The company's stock rose 60 cents to $18.65 Wednesday.

Dow Chemical (DOW: Research, Estimates) reported a fourth-quarter operating loss Thursday of 1 cent a share, compared with earnings of 18 cents a share in the same period one year earlier. Analysts had been expecting a profit of 5 cents a share. Shares rose 39 cents to $28.44 Wednesday.

Telecom service provider Verizon Communications (VZ: Research, Estimates) reported fourth-quarter results early Thursday of 77 cents a share, in line with estimates and flat with the same period one year earlier. The stock's shares sank 74 cents to $46.08 Wednesday.

Business software maker Oracle (ORCL: Research, Estimates) told analysts Wednesday it expects to see a pickup in sales by the spring. Shares of the stock rose 41 cents to $17.03 in active before-hours trade.

Tyco International (TYC: Research, Estimates) shares traded up 90 cents to $35.75 in before-hours trade following news Wednesday that Standard & Poor's had reaffirmed the conglomerate's credit rating. Company officials have indicated they plan to buy shares of Tyco stock.