Trade Deficit and Oil Drive Averages

123jump.com Staff
30 Nov, -0001
New York City

This is the 41st year of continous trade defict, 17% higher than a year ago and market still found positive news in this otherwise grim story for the American trade competitiveness. Averages closed higher as oil dips below $52.

Trader this morning found good news in today’s Commerce Department Trade report for March. March trade deficit declined by 9.2% from February 2005 but rose 17% from March 2004.

In March, the goods deficit decreased $5.2 billion from February to $59.4 billion, and the services surplus increased $0.4 billion to $4.4 billion. Exports of goods increased $1.0 billion to $72.1 billion, and imports of goods decreased $4.2 billion to $131.5 billion. Exports of services increased $0.5 billion to $30.1 billion, and imports of services increased $0.1 billion to $25.7 billion.

In March, the goods and services deficit was up $7.9 billion from March 2004. Exports were up $6.8 billion, or 7.1 percent, and imports were up $14.7 billion, or 10.3 percent.

The March 2004 to March 2005 change in imports of goods reflected increases in industrial supplies and materials ($8.4 billion); capital goods ($2.3 billion); consumer goods ($1.4 billion); other goods ($0.4 billion); and foods, feeds, and beverages ($0.3 billion). A decrease occurred in automotive vehicles, parts, and engines ($0.2 billion).

From March 2004 to March 2005, services exports increased $2.2 billion. The largest increases were in other private services ($0.7 billion), travel ($0.7 billion), and royalties and license fees ($0.4 billion).

From March 2004 to March 2005, services imports increased $2.1 billion. The largest increases were in other private services ($0.6 billion), other transportation ($0.6 billion), and travel ($0.4 billion).

The March figures showed surpluses, in billions of dollars, with Hong Kong $0.9 (for February $0.7), Singapore $0.9 ($0.4), Australia $0.8 ($0.7), and Egypt $0.1 ($0.1). Deficits were recorded, in billions of dollars, with China $12.9 ($13.9), Europe $10.9 ($10.1), the European Union $9.3 ($8.5), Japan $7.8 ($6.9), OPEC $6.6 ($6.3), Canada $5.0 ($5.8), Mexico $4.3 ($3.7), Korea $1.3 ($1.2), Brazil $0.7 ($0.6), and Taiwan $0.7 ($1.0).


After the close Tuesday Cisco reported 3Q profit of 21 cents vs. 17 cents a year ago on 10% revenue growth. The stock did not respond much at all in an otherwise positive revenue and earnings report from Cisco.

The news of Yahoo launching music cut-rate subscription service jolted the three competitor’s stocks. Share of Napster were down more than 26% and Real Networks were down 21%. Shares of Apple were down more than 10% but recovered and closed lower 3.5%. Yahoo shares closed up 82 cents.

The Walt Disney shares fell 28 cents to close at $26.67. The company reported 2Q profit of 33 cents vs. 26 cents a year ago on 9% revenue rise.

During mid-day market reacted, briefly, to the news of a small plane flying into a no-fly zone in Washington, D.C. The averages moved higher once the plane was diverted out of the no-fly zone.

In the international markets shares in Japan closed lower, and shares in UK, France, and Germany closed lower. Investors in UK are worried of the economic slow down and increasingly believe that British pound may be now overvalued.

S&P - UP 0.42%
DOW - UP 0.19%
NASDAQ - UP 0.45%



In Other News

European stocks closed lower as Frankfurt declined by 0.2%, Paris by 0.5%, and London by 0.4%.

March U.S. trade deficit declines by 9.2% surprising most analysts and economists. Import from China are 21% declined for the month but still run 54% higher than a year ago.

United Airlines wins court approval to transfer its employee pension obligation to Pension agency of the U.S. government. Other airlines may follow suit.

Oil prices in London and NY fell below $52 as report from International Energy Agency said that OPEC oil will be able to meet demand but with very little extra capacity.

Warner Music IPO came under heavy selling on its first day of trading, stock traded below its offer price of $17 after the company cut its offer price and size to finalize the deal. Shares close at $16.40.

Takeovers continue in Europe at a faster pace. The Danish shipper Maersk agreed to buy Royal P&O Nedlloyd for $2.96 billion.

Lufthansa shares closed higher 1.6% in Germany after it narrowed it current quarter loss and said it will match 2005 operating profit to that of last year.

Wolters Kluwer, Dutch publisher said that its 1Q net income declined 10% to $51.5 million on higher charges and weaker dollar.


Earnings Headlines

Shares of DreamWorks Animation fell more than 12% after it released 1Q profit. The company reported 1Q profit of 44 cents vs. loss of 33 cents a year ago, however analysts had estimated profit of 58 cents.

Federated Department Stores, the parent of Macy’s and Bloomingdale’s, reported 1Q profit of 71 cents vs. 53 cents a year ago on revenue growth of 3%.

Cisco Systems reported solid 3Q earnings of 21 cents a share vs. 17 cents a year earlier on 10% higher sales of products and services.

Wheeling-Pittsburgh's shares lost 28% Tuesday as the company posted a 1Q profit that translates to 56 cents per share vs. 71 cents per share for the comparable quarter a year ago citing high costs and problems with suppliers.

URS reported Tuesday 1Q earnings of 45 cents per share vs. 39 cents a year earlier on a 46% increase in profit attributable to higher sales.

Interline Brands, that recently filed for an IPO, on Tuesday reported 1Q profit of 4 cents per share vs. a loss of $153 a share a year ago reflecting preferred dividend payments when the company was private.