Wall Street Eyes a Firmer Opening

asia.reuters.com Tue January 21, 2003 06:25 AM ET By Huw Jones

LONDON (Reuters) - Wall Street eyed a firmer opening on Tuesday as U.S. investors return from Monday's holiday to face a week laden with heavyweight earnings against the backdrop of a military build-up in the Middle East.

Among the day's corporate news, the Wall Street Journal reported that EchoStar Communications Corp. DISH.O is in talks to sell itself to Rupert Murdoch or Liberty Media Corp. L.N .

EchoStar shares in Frankfurt rose 2.8 percent to $26.21 in thin trade from Friday's New York close at $25.77.

By 5:48 a.m. EST, U.S. stock index futures were up 0.2 percent to 0.6 percent as markets reopen after Monday's Martin Luther King holiday.

Scorecards from financial giant Citigroup C.N and pharmaceutical firm Johnson & Johnson JNJ.N are due before the bell.

Ford F.N , which also reports before the opening, said on Tuesday it plans to produce its Mondeo cars in China, the world's fastest growing auto market, in the second half of this year. Also in autos, traders said UBS Warburg raised its rating on General Motors GM.N to "buy" from "neutral."

"The market is getting more nervous as we get close to doing something in Iraq," said Steve Previs, a dealer in U.S. shares at Jefferies International in London.

Drug group Pfizer Inc. PFE.N said on Tuesday it would sell its Schick-Wilkinson Sword unit, the world's second biggest shaving brand, for $930 million in cash to U.S. battery maker Energizer Holdings Inc. ENR.N .

Motorola MOT.N , the world's number two mobile phone maker, reports after the close. The group said earlier this month it was poised for a turnaround in 2003 after battling an industry meltdown over the past two years.

Topping the day's economic numbers, U.S. housing starts, due at 1330 GMT, are expected to show a decline in December to 1.682 million units from 1.697 million in November.

On Monday, Schroder Salomon Smith Barney raised its sector weighting on semiconductor equipment makers to "overweight" from "marketweight," favoring Applied Materials AMAT.O , Axcelis ACLS.O , and Lam Research LRCX.O .

MORE TYCO TROUBLE?

The Wall Street Journal reported that troubled conglomerate Tyco International TYC.N had delayed paying many bonuses that were due last quarter in order to boost cash flow.

Meanwhile, the U.S. Securities and Exchange Commission said late on Friday it has stepped up its separate probes of Electronic Data Systems EDS.N and advertising agency Interpublic Group IPG.N to formal investigations.

Shares in U.S. storage networking form Brocade BRCD.O traded in Frankfurt rose 6.5 percent to $5.37 from Friday's close in New York at $5.13.

On Monday, Hewlett-Packard HPQ.N , the world's biggest personal computer maker, and Brocade announced a partnership to develop smarter networks.

The possibility of a war in Iraq continues to trouble investors.

The United States urged the U.N. Security Council to live up to its responsibilities on Iraq and not shirk difficult choices as a military buildup in the Gulf fueled speculation that war is looming.

Although the dollar, recently pressured by war fears, rebounded from a three-year low against the euro, dealers said it was more of a technical correction after the market had pushed the greenback down so far.

U.S. oil prices hit fresh two-year highs of above $34 a barrel amid the military build-up in the Middle East, and a seven-week old strike in oil producer Venezuela.

($1=.9394 Euro)