It could be a grim Friday considering Alan Greenspan's second-in-command resigned and there's employment data due. Asia and Europe were mixed. The Dow is set to open slightly lower.
Alice Rivlin, the Federal Reserve's vice chairman and Alan Greenspan's kindred spirit, announced that she would resign as of July 16 to join a Washington think tank. This marks the second big departure after Treasury Secretary Robert Rubin said he would step down from his post on July 4.
Rivlin came on board at the Fed in 1996 and will have one year left of her term when she leaves. Rivlin will not be a part of the central bank's meeting on June 29. Her departure leaves two vacancies at the central bank.
Like Greenspan, Rivlin espoused fiscal discipline and had wariness that a tight labor market could be a flash point for inflation.
With the economy in relatively good condition, it's a fairly innocuous that Rivlin and Rubin are departing. On Tuesday, Rivlin said in a speech in Montreal that there was "no clear indication of a resurgence of inflation."
Keep an eye out for whom President Clinton taps to fill the void at the Fed. Carol Parry, an executive at Chase Manhattan, is up for Rivlin's post. Lawrence Summers, Rubin's subordinate at the Fed, will take Rubin's seat. Clinton has yet to appoint a replacement for Susan Phillips, who left the Fed last year.
On a more immediate note: Non-farm payroll figures for May, part of the employment report, are due out at 8:30 a.m. EST from the Department of Labor. The household survey of 60,000 homes gives a picture of unemployment for the nation. If the unemployment rate rises more than the 4.3 percent expected for last month, look for stocks to swoon. A tight labor market could lead to higher production costs and inflation.
Non-farm payrolls are expected to rise to 275,000 from 215,000 in April. Again, a stronger-than-anticipated number will likely hurt stocks.
Hourly earnings are seen advancing 0.1 percent to 0.4 percent from April. If it comes in higher, that could be seen as the nail in the coffin that will prompt the Fed to raise interest rates.
Expect the following tech stocks to be among Friday's movers: Beyond.com got part of a $120 million contract, Inso is getting probed by the SEC, Quantum beat estimates, Ericsson landed a $750 million contract and Wit Capital begins trading today.
On Thursday, techs retreated on fears that high growth stocks could be hurt if the Fed raises interest rates. The Nasdaq dropped 29.04 to 2403.37 and the Dow Jones Industrial Average gained 85.8 to 10,663.69, erasing Wednesday's losses.
The Inter@ctive Week @Net Index fell 5.72 to 276.76 on Thursday.
At the Bell
The Dow Jones industrial average is set to open lower. The Standard & Poor's 500 index for June futures contracts declined 2.4 points to 1,302.6 at 7:30 a.m. EST in 24-hour electronic trading, are indicating a 20-point drop in the global bellwether.
Asia was mixed, mirroring a mixed close in the U.S. yesterday. The Nikkei 225 in Tokyo rose 0.45 percent to 16,300, the Seoul composite in South Korea gained 2.48 percent to 797, Singapore's Strait Times index dipped 0.71 percent to 1,928 and Hong Kong's Hang Seng declined 0.45 percent to 12,415.
European markets were also mottled as the Euro hit new lows as concerns that war in Yugoslavia won't end soon. London's FTSE 100 fell 0.84 percent to 6,293, the CAC 40 in Paris lost 1.05 percent to 4,309 and the Xetra DAX in Frankfurt gained 0.31 percent to 50,54 at 7:50 a.m. EST.
The European Union, an economic policy organization of 11 nations, not including the U.K., quarreled over its opinion of the fall in its currency. An early release said the Euro's slide was "no cause for alarm," later amending this to say that a stable currency favors economic growth. The Euro has traded just in the shadow of the U.S. Dollar since its inception earlier this year.