Boeing Hits a Record

Elena
10 Apr, 2006
New York City

U.S. stocks traded mixed in late morning ahead of quarterly earnings reports and economic data. Oil, oil service and natural gas stocks moved notably higher on surging oil prices. Oil giant Exxon Mobil gained nearly 1% and Chevron rose 1.7%. Gold stocks were other conspicuous gainers. At the same time, rising oil dragged airline stocks down. Shares of Boeing hit a record high after the company agreed to settle U.S. allegations of violation of export regulations.

[R]11:30AM Stocks turned mixed in late morning.[/R]
Stocks turned to lackluster trading fashion in late morning session with investors looking ahead to the opening of the earnings season and economic data release. The major averages came off intraday highs with the Nasdaq falling below the flat line, while the Dow and S&P 500 posting modest gains. Significant weakness was visible among HMO stocks. The sector dropped 2.4% to reach its worst intraday level in over two months, dragged by Coventry Health Care ((CVH)) and UnitedHealth ((UNH)). Airline stocks were under pressure on higher fuel costs concerns.

Meanwhile, the increase in the price of oil contributed to notable gains by oil service, oil and natural gas stocks. Utilities stocks posted strength, sending the Dow Jones Utilities Average up 0.8%. Financial stocks posted strength, with the brokerage and banking sectors both rising 0.7%. Shares of Thomas Weisel ((TWPG)) rose 9.4% on upgrade. J.P. Morgan ((JPM)) gained 1.3% on announcement of a swap deal with Bank of New York. The Dow was also helped by strong gains for Disney ((DIS)), McDonald's ((MCD)), and Boeing ((BA)). Alcoa (AA) moved higher ahead of its quarterly report. In late morning trading, the Dow Jones industrial average rose 50.51, or 0.45%. The Standard & Poor's 500 index was up 3.71, or 0.29%, and the Nasdaq composite index lost 0.63, or 0.03%. Bonds stayed flat following last week's plunge, with the yield on the benchmark 10-year Treasury note unchanged at 4.96% from late Friday.


[R]10:30AM Stocks rose.[/R]
Energy stocks stood out as the best performers in early trading, rebounding from Friday losses on profit taking. Rallying oil prices to $68 helped stocks to resume their upward momentum with the oil service sector rising 1.9%, the oil sector also up 1.9% and natural gas sector up 1.2%. The gold sector was another notable gainer in early Monday session, with an advance of 1.3% to erase most losses posted Friday. Financial stocks moved modestly higher, followed by the utility sector.

Meanwhile, airline stocks were pressured by rising oil prices. The sector fell about 1.8% in early trading. The HMO sector was another notable loser in the early going, down about 1.4%, led lower by Health Net ((HNT)), which dropped more than 2.5%. UnitedHealth ((UNH)) and Coventry Health ((CVH)) were down more than 2% as well. In morning trading, the Dow Jones industrial average rose 36.58, or 0.33%. The Standard & Poor''s 500 index was up 3.45, or 0.27%, and the Nasdaq composite index gained 2.86, or 0.12%. Bonds stayed flat following last week''s plunge, with the yield on the benchmark 10-year Treasury note unchanged at 4.96% from late Friday.


[R] 9:45AM Stocks opened in the positive.[/R]
Stocks started trading above the flat line as investors looked past Friday’s declines, awaiting the new earnings season. Gains among energy and metal stocks contributed to the initial strength. Recovering from last-week weakness, gold prices jumped to $600 an ounce to send gold stocks significantly higher. An increase in the price of oil contributed to the early strength among energy stocks. Meanwhile, the higher price caused weakness in the airline sector. In the opening minutes, the Dow Jones industrial average is up 8.89 at 11,128.93, the Nasdaq Composite Index has gained 1.37 at 2,340.39 and the Standard & Poor''s 500 index has inched up 1.30 at 1,296.80.


[R]9:15AM Stock futures indicated a flat start.[/R]
U.S. stock futures pointed to a flat market opening Monday, following the sharp declines on Friday after the release of better-than-expected jobs report raised interest rate concerns. JPMorgan Chase & Co. ((JPM)) is expected to be in focus as it announced plans to swap its corporate trust unit for Bank of New York Co.''s ((BK)) 338 retail branches and small business banking network. The JPMorgan deal values the Bank of New York business at $3.1 billion, and JPMorgan''s trust unit at $2.8 billion. According to the agreement, Bank of New York will receive $150 million in cash. Market also awaited the start of the new earnings season, with aluminum maker Alcoa ((AA)) reporting Q1 earnings report due out after the closing bell. Other major companies releasing quarterly results during the week are Genentech ((DNA)), Circuit City ((CC)), Gannett ((GCI)), Advanced Micro Devices ((AMD)) and General Electric ((GE)). S&P 500 futures were down 0.40 point, slightly above fair value. Dow Jones industrial average futures rose 2 points, and Nasdaq 100 futures fell 1.5 points.

Crude oil prices advanced on supply worries, rising from Iran’s nuclear standoff, violence in Nigeria and declining gasoline stockpiles. Light sweet crude May delivery gained 37 cents to $67.76 a barrel. Gasoline added 1 cent to $1.9867 a gallon, while heating oil was marginally up to $1.8854. Natural gas futures fell 2 cents to $6.722 per 1,000 cubic feet. London Brent rose 31 cents to $67.60. European gold sharply rose on weaker dollar, higher energy prices and strong speculative buying. In London gold climbed to $597.50 per troy ounce, up from $587.30. In Zurich the precious metal rose to 596.90 from $587.10 In Hong Kong gold added 35 cents to close at $596.50. Silver opened at $12.30, up from $11.90. The U.S. dollar was mixed versus major currencies ahead of jobs report. The euro traded at $1.2122, up from $1.2106. The dollar bought 118.35, up from 117.27. The British pound was quoted at $1.7465, up from $1.7431.

Schnitzer Steel Industries, ((SCHN)), metals company, reported Q2 earnings of 68 cents a share, down from a profit of $1.15 a share a year earlier despite revenue growth, missing analysts’ estimates for a profit of 72 cents a share.

GenCorp Inc, ((GY)), maker of aerospace and defense products, reported Q1 net loss of 29 cents a share, up from 58 cents a share in the year-ago. The company added that sales dropped to $128.7 million from $139.9 million in the quarter.

Frisch''s Restaurants Inc, ((FRS)), restaurant operator, reported that Q3 profit dropped to 43 cents a share, from $1.20 in the year-ago period. Sales for Q3 advanced to $67.3 million from $62.8 million in last year''s Q3. If not for a gain in the year-ago period the company would have reported a 26% increase in Q3 profit.

Orange 21 Inc., ((ORNG)), a leading developer of premium eyewear products, reported Q4 net loss of 22 cents per share on approximately 8.0 million weighted average shares outstanding, down from a net income of 13 cents per share on 5.8 million weighted average shares outstanding in the same period a year ago. Orange’s net sales for Q4 of 2005 declined 7.1%, compared to the same time previous year.


[R] 8:15 AM European averages traded mixed at mid-day.[/R]
European markets traded mixed at mid-day as strength among energy, resource and auto stocks sent the British and German averages slightly higher, but concerns over the French economy offset the positive sentiment. Oil companies like BP and Royal Dutch Shell advanced as crude prices moved higher. The German DAX 30 gained 0.04%, London FTSE 100 rose 0.3%, while the French CAC 40 declined 0.3%, reflecting disappointing industrial production data. Major automakers like Renault, Peugeot-Citroen dropped as the report showed that autos was the worst affected sector, down 3.9%.


[R]7:45AM Asia closed mostly down.[/R]
Asian-Pacific benchmarks finished mostly in the negative, reflecting weakness among interest-rate sensitive stocks on renewed concerns about further rate increases. The Nikkei slipped 0.6% to 17,456.58 on profit taking. Investors sold off technology, machinery and other stocks, following the strong rally last weak and remaining cautious ahead of the forthcoming earnings season. Sony dropped 1.2% on news that Samsung Electronics is planning to invest $2 billion to expand its joint production. Among major machinery stocks, Komatsu dropped 2% and Fanuc fell 0.6%. Hong Kong’s Hang Seng advanced for a fifth consecutive session. The index rose 0.3%, led by gains for MTR, up 5.3% and China Mobile, up 1.2%. China Shanghai Composite climbed 1.2%, boosted by automakers, while Singapore Straits Times lost 0.2% on property shares, and Australia All Ordinaries dropped 0.8% on weak resource and financial stocks.