Before the bell: As oil resumes rally, stocks set to decline

Posted May 23rd 2008 7:41AM by Melly Alazraki
Filed under: Before the Bell, Earnings Reports, Deals, Microsoft (MSFT), Yahoo! (YHOO), Market Matters, Halliburton (HAL), Gap Inc (GPS), Economic Data, Oil, Housing

Stock futures were lower Friday morning as one again crude prices resumed their seemingly endless move upward. The market may also be agitated about further data upcoming about the housing market.

On Thursday, U.S. stocks ended higher two days of heavy losses as finally crude-oil futures retreated, giving some relief to the markets. The Dow industrials finished 24 points higher, or 0.19%, the Nasdaq Composite rose 16 points, or 0.67%, and the S&P 500 added 3 points, or 0.26%.

Only one economic report is due out today. April existing-home sales will be released at 10 a.m. EDT, and economists expect it to decline yet again.

Oil prices rose Friday, as supply concerns once again took center stage especially with growing global demand. After tumbling around $4 overnight from a record above $135 a barrel, light, sweet crude for June delivery was up $1.29 to $132.10 a barrel.

With the long weekend just around the corner, trading might be lighter than usual today. U.S. markets will be closed Monday for Memorial Day.

Despite the market softening somewhat lately, deal news have been increasing. Today, we hear that Halliburton (NYSE: HAL) has made a conditional bid of $3.36 billion for Expro International Group PLC (OTC: EXPRF), the British oil services firm. The all-cash proposal is about 6% higher than the previous one.

Meanwhile, Yahoo Inc. (NASDAQ: YHOO) on Thursday postponed its annual meeting from July 3 to late July. No doubt, Yahoo!'s board, afraid of losing control following Carl Icahn's call to replace the board. Yahoo's board may use the time to either negotiate a deal with Microsoft Corp. (NASDAQ: MSFT), a partnership with another company, or prepare its defense. This the second time Yahoo has postponed its annual meeting.

Gap Inc. (NYSE: GPS) reported results after the close Thursday, saying that while revenue dropped 5%, it managed to still boost its first-quarter profit by 40% by managing inventory and cutting costs. Gap said that it earned $249 million, or 34 cents per share on $3.38 billion in revenue. It beat estimates of 30 cents per share but missed the expected $3.42 billion in revenue. GPS shares traded 2.5% higher in after-hours.

Tags: exprf, gps, hal, msft, yhoo