Record High Transportation Average

123jump.com Staff
15 Mar, 2006
New York City

S&P crossed 1,300 and Dow Jones Industrial crossed 11,200 for the first time since May 2001. Nasdaq traded above 2,300 but still 50% below the all-time peak in the year 2000. Regional survey from Fed suggested healthy economic expansion, rising emplyment levels and mild rise in retail prices. H&R Block lost 4% on a suite filed by NY Attorney General office. Lehman reported earnings growth of 24% but brokerage stocks sell-off. Brazil and Mexico gained 2% and 0.4% leading emerging markets.

4:30PM Indexes Venture to a new-high territory.

DOW 11,209.77 UP 58.43
NASDAQ 2,311.84 UP 15.94
S&P 1,303.02 UP 5.54

-Yield on 10-year bonds declined to 4.727% and 30-yea bonds to 4.749%
-Crude oil lost 93 cents to $62.17 per barrel but gasoline, heating oil and gas lost 3 cents.
-Gold futures closed up $1.40 to $554.40 per ounce.

-Burlington Northern, Union Pacific and CSX rose more than 5%.
-Transportation index close near record highs on strong earnings revision from UNP.

-Brazil gained 2%, Mexico 0.4%, Hong Kong 1.29%, Taiwan 0.91%
Russia gained 1.25% but Turkey lost 1.44%.

It was a day of railroads specifically it was the day of Union Pacific. The company last night revised its earnings forecast for the current quarter from 80 cents to 90 cents to $1.00 and $1.10 per share and for the fiscal year 2006 earnings between $4.60 and $4.80 to $4.80 to $5.00. Most of the growth is coming from rising volumes of commodities and agricultural goods. The Union Pacific stock closed up 6% and lifted several other railroad stocks in the session. The Dow Jones Industrial and Transportation averages rose higher and so did the index of S&P 500. S&P 500 closed above 1,300 for the first time since May 2001. Transportation average closed up 97 points or 2.2% up to a record high of 4,591.


3:30PM Brazil index gains 2% leading emerging markets around the world.
Most emerging markets continued their advances in Asia, Europe and Latin America. Hong Kong, Taiwan, Thailand and South Korea advanced 1.29%, 0.91%, 0.35% and 0.58%. India was closed on account of national holiday to mark festival of colors. Russia closed up 1.25% but Turkey closed down 1.44%. Brazil and Mexico advanced 1.97% and 0.42% as markets near closed. Energy and commodities stocks rallied in Brazil. Petrobras rose 4.5% and CVRD rose 1.4%. Electrobras rose 6.8% and electrical utility Cesp rose 9.8%. Recently listed airline on NYSE, TAM gained 5% and GOL traded up 6%.


3:00PM Transportation stocks lead gainer.
In the early afternoon transportation stocks were leading the gainers on lower oil price and earnings revision from Union Pacific. Railroads were trading higher led by Union Pacific ((UNP)) up 6%, Burlington Northern ((BNI)) up 6.4%, CSX ((CSX)) up 5% and Canadian National ((CNI)) up 2%. United Airlines ((UAUA)), JetBlue ((JBLU)) and AMR Corp ((AMR)) traded higher as transportation sector advanced. FreightCar America ((RAIL)) traded up 5%. Lehman Bros. ((LEH)) reported rise in earnings of 24% but brokerage stock sold-off in the afternoon by more than $1. Goldman Sachs, Merrill Lynch and Morgan Stanley traded lower by a fraction. Research In Motion ((RIMM)) jumped up $4.88 or 5.88%. H&R Block traded down 4% on the account of suite filed by NY Attorney General claiming that the company fraudulently marketed retirement accounts.


12:30PM European markets closed up on resource and tech stocks.
European markets extended earlier gains to close higher, lifted by strong resource and technology stocks. BHP Billiton, Rio Tinto, and BP advanced on higher metal prices. Among tech stocks, STMicroelectronics and Infineon Technologies showed strength. The German DAX 30 added 0.5%, the French CAC 40 gained 0.2%, and London FTSE 100 rose 0.4% on deal talk.

Crude oil prices retreated as inventory report showed strong oil supplies. However, it also showed that refined products declined. Light sweet crude April delivery fell 40 cents to $62.70 a barrel. Gasoline fell 1 cent to $1.825. Heating oil lost 1 cent to $1.7857. London Brent for April delivery lost 26 cents to $63.71 a barrel. European gold continued its recent advance. In London gold rose to $554.90 bid per troy ounce, up from $547.30. In Zurich the precious metal advanced to $554.80 from $543.80. In Hong Kong gold gained $6.90 to $551.70. Silver closed unchanged at $9.90. The U.S. dollar traded mixed against other major currencies. The euro traded at $1.2035, up from $1.2018. The dollar bought 117.47 yen, up from 117.38. The British pound was quoted at $1.7446, down from $1.7463.


11:30AM Stocks traded in a narrow range.
Stocks traded in a narrow range with investors, digesting recent big gains and awaiting the Federal Reserve survey of regional economic conditions. Better-than-expected earnings from Lehman Brothers Holdings Inc. and raised outlook by DuPont Co failed to impress market significantly.

The Dow Jones traded in a narrow range, currently down around 3 points. The Nasdaq also remained near the flat line, presently up about a point. Bond prices fell, pushing the yield on the 10-year bond higher after a sharp drop Tuesday. Yield on the 10-year rose to 4.73% from 4.69% late Tuesday

United Technologies ((UTX)) was the most notable decliner within the Dow in the morning, falling by about 1.1%. Microsoft ((MSFT)) and Wal-Mart ((WMT)) also stood out among movers to the downside, both down around 0.6%. DuPont ((DD)) was the largest gainer among the Dow stocks, rising 2.1% after the company increased its financial guidance for both the first quarter and full year 2006. Caterpillar ((CAT)) continued its early-week advance to rise around 1.3%. Hewlett Packard ((HPQ)) gained about 1%, nearing a 2-week high. Among other notable advancers Wednesday, CSX ((CSX)) rose 2.7% after it was upgraded to buy from neutral at UBS. Movie Gallery ((MOVI)) jumped 23% on signing a management agreement and alliance with Excess Space Retail Services. OpenTV Corp ((OPTV)) climbed 11% on upbeat earnings report. Shares of Scientific Technologies ((STIZ)) rose 12% after reporting the company swung to profit in Q4. Sears Holdings ((SHLD)) advanced 9.6% on better-than-expected quarterly results. Union Pacific ((UNP)) was up 5.6% after the nation's biggest railroad raised its Q1 and full-year earnings outlook.


10:30AM Stocks traded flat ahead of economic data. The Nasdaq advanced.
Major stock averages traded flat, awaiting the Federal Reserve survey of regional economic conditions, expected to give signals about interest rates. However, the Nasdaq was the sole gainer among indices, lifted by a positive profit report from retailer Sears Holdings Corp. Railroad stocks moved higher in the early going, reflecting raised guidance from Union Pacific ((UNP)). As a result the Dow Jones Transportation Index climbed 1.7%, reaching a new high. Gold, disk drive and chemical stocks also showed strength in the early going. There were few standouts to the downside in the early going. Energy stocks moved to the downside ahead of the weekly petroleum inventory data. Drug and computer hardware stocks also posted some weakness. Sears Holdings ((SHLD)) stood out among movers to the upside with 12% advance, following strong Q4 earnings that were sharply higher than last year. OrthoLogic ((OLGC)) was one of the most notable decliners in the early going, slipping 48%, after it revealed disappointing late-stage trial results of its bone fracture repair product. General Motors Corp. ((GM)) rose 2.9% on news that a private equity group submitted a nonbinding bid of $12.5 billion to $13 billion for the company's financing arm. DuPont Co. ((DD)) rose 3% after the chemical company raised its forecasts for Q1 and full year.

Crude oil inventories advanced. Gasoline inventories posted a decline.
Crude oil inventories recorded an advance in the latest week, according to government statistics released Wednesday. This added to a recent string of gains, though the build was not quite as big as the previous week. Meanwhile, stocks of gasoline ticked down again. The Department of Energy's Energy Information Administration revealed that crude oil inventories climbed by 4.8 million barrels for the week ended March 10, rising to 339.9 million barrels from the prior week's level of 335.1 million barrels. This followed an advance of 6.8 million barrels in the previous week. Oil inventories were 10.4% higher than their levels of the same time last year. Gasoline inventories posted a week-over-week decline of 900,000 million barrels, the government said. In the previous week, gasoline stocks broke a string of gains with a decline of 1.1 million barrels. Gasoline stocks were 0.6% above their levels of last year. Inventories of distillate fuel oil declined again, falling by 3.9 million barrels in the most recent week.


9:45AM Stocks opened mixed.
U.S. stocks were mixed at opening as market seemed uncertain about taking a lift from declining bond yields and strong earnings results from investment banks. Investors were also cautious ahead of the release of the Federal Reserve's Beige Book survey of regional economic conditions. A couple of economic reports were released and treasury yields moved up. On Tuesday, disappointing economic news sent the 10-year yield off a 21-month high. Financial services firm Lehman Brothers ((LEH)) announced a sharp increase in Q1 earnings on Tuesday, helped by an accounting change and a significant rise in revenues. The company reported net income of $1.1 billion, or $3.66 per common share. Dow component DuPont ((DD)) raised its Q1 earnings guidance on Tuesday. The company also revealed a cost cutting plan that will lead to the cutting of 1,500 jobs.


9:00AM Stock futures pointed to a lackluster opening.
U.S. stock futures were sitting below the flat line, pointing to a lackluster start of Wednesday session. After a strong rally yesterday with major averages reaching five-year highs, stocks seemed uncertain about extending gains. Investors, waiting for signals about future interest-rates, remained cautious ahead of a heavy load of economic data with no catalyst to drive stocks higher in pre-market trading. Economic news will continue to be a key driver in Wednesday's session. Monthly data on import and export prices are expected before opening. Oil inventory report is also due out in the morning. In the mid-afternoon, the Federal Reserve will release its so-called beige book, a survey of regional economic conditions. On earnings news front, Lehman Brothers ((LEH)) posted strong quarterly results, following an upbeat earnings report from Goldman Sachs yesterday. The financial-services firm, reported Q1 profit rise of 24% to $1.085 billion, or $3.66 a share vs. $875 million a year ago, when it earned $2.91 a share. Net revenue rose 17% to $4.46 billion. Standard & Poor's 500 futures were down 0.3 point, but above fair value. Dow Jones industrial average futures were down 2 points and Nasdaq 100 futures were up 2 points.

Import prices fell in line with expectations, while export prices were unchanged.
The Department of Labor released its report on import and export prices in the month of February. The report showed that import prices fell in line with economist estimates while export prices came in unchanged. The report showed that import prices fell 0.5 percent in February after increasing by an upwardly revised 1.4 percent in January. Economists had expected import prices to fall 0.5 percent compared to the 1.3 percent increase originally reported for January. The drop in import prices was partly due to a 0.7 percent decrease in prices for petroleum imports, although prices still fell 0.5 percent excluding petroleum imports. The decrease in petroleum import prices came after a 6.9 percent increase in January. As mentioned above, the report also showed that export prices were unchanged in February after falling 0.7 percent in January. Excluding a 1.1 percent drop in prices for agricultural exports, export prices increased 0.1 percent.

Crude oil prices retreated below $63 ahead of inventory report, expected to show strong oil, but weak gasoline and heating oil supplies. Light sweet crude April delivery fell 37 cents to $62.73 a barrel. Gasoline fell 2 cents to $1.8485. Heating oil lost more than 2 cents to $1.7957. London Brent for April delivery lost 26 cents to $63.71 a barrel. European gold continued its winning streak. In London gold rose to $551.25 bid per troy ounce, up from $547.30. In Zurich the precious metal advanced to $551.70 from $543.80. In Hong Kong gold gained $6.90 to $551.70. Silver opened at $10, up from $9.90. The U.S. dollar traded mixed against other major currencies. The euro traded at $1.2028, up from $1.2018. The dollar bought 117.57 yen, up from 117.38. The British pound was quoted at $1.7453, down from $1.7463.


8:30 AM Lehman Bros tops views, while Ross Stores is in line.
Ross Stores Inc, ((ROST)), off-price retailer, reported that Q4 profit advanced 37% to 49 cents a share, from 35 cents a year earlier on 16% sales growth and 6% of same-store sales growth, in line with analysts’ expectations.

Lehman Bros., ((LEH)), investment banking services provider, reported Q1 earnings $3.66 a share, including a 16 cents a share accounting change gain, up from $2.91 a share a year ago. Net revenue advanced to $4.46 billion, from $3.81 billion in the year-ago period. The company beat analysts’ views for earnings of $3.17 a share. Lehman Bros added that stubbornly strong fixed income trading and near-record merger activity around the globe boosted its Q1 earnings to advance 24%. Tuesday, Goldman Sachs reported that its net income for the quarter advanced more than 60%, setting a record for any broker's quarterly profit.


Sears Holdings, ((SHLD)), full-line and specialty retail stores operator, reported that Q4 net income advanced to $4.03 a share, up vs. $3.09 a share in the year-ago period on revenue growth, beating analysts’ forecasts for earnings of $3.62 a share. In a SEC filing, the company announced that proforma revenue for the year shed 3.0%, as domestic comparable store sales were down 5.3% in the aggregate, with Sears Domestic comparable store sales decreasing 8.4% and Kmart comparable store sales decreasing 1.2%.

Charming Shoppes Inc, ((CHRS)), clothing retailer, reported that Q4 net income surged to $19.2 million, or 15 cents a share, from $4.9 million on 36% net sales growth and 7% same-store sales growth. The company beat analysts’ expectations of 14 cents a share. The company announced that performance followed higher sales and operating margin improvement at its Lane Bryant and Catherines Plus Sizes brands.

EchoStar Communications Corp, ((DISH)), satellite-television operator, reported Q4 net income of 30 cents a share, up from 15 cents in the prior year. Total revenue came to $2.18 billion for Q4, up 12.8% from the same period the previous year. The company missed analysts’ projections of 35 cents a share. Net new subscribers added to EchoStar's Dish Network totaled about 330,000 for Q4, pushing the customer base to 12.04 million. For 2005 as a whole, EchoStar said Dish Network added nearly 1.14 million subscribers.

Consolidated Communications Holdings Inc, ((CNSL)), communications services provider, reported that Q4 net loss was narrower reaching $2.1 million, or 7 cents a share, from $10.6 million in the year-ago period, as revenue advanced 3.3%. The company missed analyst estimate for a profit of 15 cents a share. The company also added that its digital video service advanced considerably during Q4, which should be instrumental in boosting customer loyalty.


8:00AM Asian markets advanced across the region, despite Sony’s stock decline.
Asian-Pacific benchmarks advanced across the region Wednesday, boosted by solid gains on Wall Street overnight. The Nikkei rose 0.5% to 16,319.04, despite 1.8% decline in Sony’s stock as the electronic giant postponed the release of its PlayStation 3 game console until November. The index was largely supported by technology, communications and auto stocks, including Advantest, up 1.9%, NTT DoCoMo, up 0.6%, and Honda Motor rising 0.7%. Hong Kong’s Hang Seng climbed 1.3% on property stocks, helped by easing rate-hike concerns. Shanghai Composite surged 1.3%, led by gains in oil major Sinopec. Taiwan weighted index rose 0.9% on strong tech sector and South Korea’s Kospi advanced 0.6% on insurance stocks.

European markets posted gains at mid-day trading, lifted by strong resource and technology stocks, following a sharp decline in U.S. bond yields overnight. BHP Billiton, Rio Tinto, and BP advanced on higher metal prices. Among tech stocks, STMicroelectronics and Infineon Technologies showed strength. The German DAX 30 added 0.3%, the French CAC 40 gained 0.3%, and London FTSE 100 rose 0.5%.