By James Langton
(March 7 – 09:00 ET) – Traders get their only important economic data of the week today. U.S. fourth quarter productivity was revised upward to 6.4% and unit labour costs are falling faster than expected, by 2.5%. The numbers are obviously positive for the “new economy,” although there is some fear that productivity gains will lead to a “wealth effect” and rising inflation. Stock futures popped up on the news however.
In Canada, StatsCan is reporting that the industrial capacity utilization rate, at 86.8% for the fourth quarter of 1999. That’s a little higher than expected. This points to an economy nearing full output and the spectre of rising inflation.
In Europe, stocks are mixed. Tech stocks are also up, while miners and automakers are down. London’s FTSE is down 29 points to 6,539. France’s CAC 40 is up just 12 points to 6,558. The German DAX is roaring ahead by 114 points to 8,090 on merger news. Traders are speculating that German banking giants Deutsche Bank AG and Dresdner Bank AG will merge. The firms admit to discussing “wide-ranging” cooperation.
In Asia, stocks ended higher after spending most of the day in the red. Telcoms were selling much of the day, but some other techs and blue chip plays pushed a positive close. The Nikkei finished up 148 points to 19,944. The Hang Seng added 107 points to 17,866.
In earnings news Descartes Systems Group Inc. is announcing a 9¢ per share net loss in the fourth quarter, up from an 11¢ per share loss in Q3 1999. Sleeman Breweries Ltd. is reporting that its latest quarterly income rose 9% to $1.5 million from $1.4 million, although this is flat on a per share basis at 9¢.