Deals Lift Stocks

Elena
20 Mar, 2006
New York City

U.S. stocks advanced at opening with interest rates in focus ahead of Ben Bernanke''s speech after close. Market sentiment was lifted by acquisition news and optimism over interest-rate hikes. Merck & Co. is expected to announce a deal with privately held Neuromed Pharmaceuticals to develop painkilling drugs. Wal-Mart Stores announced it could hire 150,000 people in China over the next 5 years and open 20 stores in the country in 2006.

9:45AM Stocks opened higher on interest-rates optimism.
U.S. stocks advanced at opening, supported by solid gains overseas and expectations that in his speech Fed Reserve’s Chairman Ben Bernanke will shed some light over interest rates a week ahead of an official decision from the U.S. central bank. On the corporate news front, Merck & Co. ((MRK)) was allegedly due to announce a deal with privately held Neuromed Pharmaceuticals to develop painkilling drugs. Wal-Mart Stores ((WMT)) was expected to draw attention on news that the world''s largest retailer could hire 150,000 people in China over the next five years and open 20 stores in the country in 2006. General Motors ((GM)) was also seen in the spotlight, following accounting problems that made the company delay its annual report. Meanwhile, GM, Delphi Corp. and the United Auto Workers union reportedly continued talks on a possible labor deals. In takeover mews, R.R. Donnelley & Sons Co., is expected to announce a bid for Office Tiger for $250 million. At the start of the session, the Dow Jones industrial average was up 3.68 at 11,283.33, the Nasdaq Composite climbed 6.02 to 2,312.50 and the Standard & Poor’s 500 gained .49 to 1,307.74.


9:00AM Stock futures pointed to a higher start ahead of data release.
U.S. stock futures pointed to a higher opening, reflecting optimism over the interest rate outlook and corporate acquisition talk. Ahead of Fed Reserve Chairman’s speech after closing bell, interest rates got into focus again. Last Thursday tame inflation data release boosted investors’ optimism the Federal Reserve is likely to end its interest rate raising campaign in the near future. In corporate news, shares of arts-and-crafts retailer Michaels Stores ((MIK)) rose 13% before the opening bell in electronic trading after the company put itself up for sale. Software maker Oracle Corp. ((ORCL)), which is due to report quarterly results after the market close, rose 0.7% before the opening bell. Standard & Poor''s 500 futures were up 1.9 points, above fair value. Dow Jones industrial average futures were up 11 points, and Nasdaq 100 futures were up 5.5 points.

Crude oil prices retreated on signs of lower demand forecasts and strong U.S. oil inventories. Light sweet crude April delivery fell 40 cents to $62.37 a barrel. Gasoline fell 3 cents to $1.8360, while heating oil lost 1 cent to %1.7695. Natural gas dropped 9 cents to $6.960 per 1,000 cubic feet. London Brent for April delivery lost 28 cents to $62.98 a barrel. European gold extended gains Monday morning. In London gold advanced to $554.25 bid per troy ounce, up from $554.10. In Zurich the precious metal rose to $554.90 from $554.70. In Hong Kong gold climbed $1.40 to $555.70. Silver traded unchanged at $10.30. The U.S. dollar advanced against other major currencies. The euro traded at $1.2181, down from $1.2195. The dollar bought 116.03 yen, up from 115.79. The British pound was quoted at $1.7569, up from $1.7568.

Rockwood Holdings loss narrower, Williams-Sonoma in line with expectations
Rockwood Holdings Inc, ((ROC)), chemicals company, reported a Q4 loss of 24 cents a share, up from a loss of $3.41 a share a year-earlier. Sales advanced 6.5% in Q4. The company missed analysts’ estimates for a profit of 31 cents a share. in the December period. Q4 incorporated $38.4 million in net non-recurring and other special charges, while the year-ago performance included $200.8 million in net non-recurring and other special charges.

Williams-Sonoma Inc., ((WSM)), retailer, reported Q4 earnings of $1.02 a share, up from 95 cents a share in the year-earlier period. Adjusted earnings came to $1.09 a share, apart from a charge of 7 cents a share connected with the consolidation of its Hold Everything business. On adjusted basis the company met analysts’ expectations for earnings of $1.09 a share. Net revenues for Q4 advanced 12.1% and same-store sales advanced 5.8%.

Carrizo Oil & Gas Inc, ((CRZO)), energy company, reported that Q4 net income surged to 34 cents a share, from 14 cents a share in the year-ago period, beating analysts’ estimates for earnings of 29 cents a share. Sales climbed 63%, powered by higher natural gas production and higher prevailing oil and natural gas prices.

Books-A-Million Inc., ((BAMM)), bookseller, reported Q4 net income of 66 cents a share, up from 54 cents a share in the same period a year ago. Sales for Q4 advanced 8.1%, and same-store sales advanced 4.1%. The company raised its quarterly dividend 60% to 8 cents a share.


8:30 AM European averages rose mid-day on insurance stocks.
European markets traded positive at mid-day, reflecting continuous strength in the insurance sector on the back of merger-and-acquisition speculation, involving Prudential and its peer Aviva. The resource sector, gaining on higher metals prices and strong close of U.S. markets Friday also contributed to the upside movement of European stocks. The German DAX 30 rose 0.6%, the French CAC 40 gained 0.5%, and London’s FTSE 100 advanced 0.5%.


8:00AM Asian markets closed higher. The Nikkei surged 1.7%.
Asian-Pacific benchmarks finished in the positive, boosted by expectations of strong corporate results due out this week and gains in the resource sector on high metals prices. The Nikkei climbed 1.7%, reaching a six-week high to 16,632.74, lifted by strong earnings reports. Australia’s All Ordinaries jumped 0.6% to hit an all-time peak, crossing the key 5,000 level on mining and resource stocks. Hong Kong’s Hang Seng rose 0.8%, led by China Mobile and HSBC. South Korea’s Kospi gained 0.4%, lifted by brokerage firms, reflecting optimism on economic recovery.