By James Langton
(March 17 – 09:00 ET) – Traders are looking for the luck of the Irish this morning after yesterday’s huge rallies. The big news this morning is the U.S. Consumer Price Index. It came in up 0.5% on the headline, slightly ahead of expectations of 0.4%. Heating oil increases are responsible for the extra tick. The core rate was right in line at 0.2%.
Stock futures traders appeared to be buoyed by the consensus core rate and undeterred by the strong headline number — the same way they reacted to yesterday’s Producer Price Index.
The only number out in Canada this morning is the new motor vehicle sales for January. They were expected to drop 4.0% after an 8.5% jump in December, yet they dropped faster than that, 7.2%, mainly because of lower passenger car sales.
In Europe, traders were cautious if upbeat. Media, telecom and mining stocks were all driving up this morning. The FTSE is currently up seven points in London to 6,564. France’s CAC 40 has gained 56 points to 6,315. The German DAX is up 72 points to 7,656.
In vehicle manufacturing news, the world’s biggest aerospace firm, Boeing Co., has finally reached a settlement with its union, ending a 38-day strike. Ford Motor Co. has agreed to buy the Land Rover line from BMW AG for about US$3 billion.
America Online will spend as much as US$8.25 billion to buy back Bertelsmann AG’s 50% stake in AOL Europe and Australia. Spanish telecom giant Telefonica SA is offering US$5.33 billion in stock for Endemol Entertainment Holding NV.
Bloomberg is reporting that Deutsche Bank AG CEO Rolf Breuer has confirmed that Deutsche may sell Dresdner Kleinwort Benson after it buys Dresdner Bank AG. Last week he explicitly denied those rumours.
In Asia, the Dow’s massive rally was the big market-moving event absent further posturing between China and Taiwan. The Nikkei closed up 313 points to 19,566. The Hang Seng added 724 points to close at 17,083.
In business news, Clarica will issue $150 million worth of preferred shares at $25 each on March 23, in a deal led by BMO Nesbitt Burns Inc.