Before the bell 4-13-07: Stock futures lower ahead of PPI data

Stock futures are lower in early morning trade indicating to a similar start for stocks.

The market will pay close attention today to the release of PPI and consumer sentiment numbers.

• At 8:30 a.m., March produce prices index, a measure of inflation at the wholesale level will be reported. It is expected to come in at 0.6% after rising 1.3% in February. Core index, which excludes the more volatile food and energy prices, is forecast by economists to rise 0.2% after a 0.4% rise in February.
• At 10:00 a.m., the University of Michigan will be releasing its preliminary consumer sentiment index for April. The index is expected to edge down to 88.0 from 88.4 in March.
• Finally, February trade gap is due at 8:30 a.m. as well. The gap is expected to have widened to $60.5 billion from $59.1 billion.

After the market reacted with a 90 point slide (Dow) on Wednesday following the Federal Reserve's minutes that indicated a rate hike, not cut, is possible later in the year due to inflationary pressures, no doubt the PPI could set the tone of today's session.

Still, the market has shown resilience and yesterday buyers came back into the market, looking past higher oil prices and somewhat murky outlook from retailer to finish the day on a positive note.

Oil prices rose above $64 a barrel today continuing yesterday's trend following warnings that OPEC production was at its lowest point in two years. Combined with unrest at some oil producing countries and low inventories in the U.S. and oil prices continued their climb.

In Corporate news, General Electric Co. (NYSE: GE) reported this morning first-quarter 2007 earnings of $4.5 billion, up 8% from the same period in 2006. EPS reported grew by 10% to 44 cents, matching analysts estimates. Revenue was better than forecast.

Merck & Co., Inc. (NYSE: MRK) shares are up 3.6% in pre-market trading:

• Yesterday, the drugmaker raised its outlook for first-quarter and full-year profits. MRK expects EPS for the quarter to be 84 cents, much higher than earlier projections of 63-67 cents. It also guided much higher for the full year.
• That was the good news, the bad news is that the FDA didn't approve painkiller Arcoxia, Merck's Vioxx successor.
• That didn't stop Goldman Sachs from upgrading MRK to Neutral from Sell.

Morgan Stanley (NYSE: MS) is buying 13 hotels from Japanese carrier All Nippon Airways Co. for 281 billion yen ($2.4 billion).