Stocks and Commodities Sell-off

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

Bearish tone in the market was not shaken off by good April retail sales. Positive earnings from Target and American Eagle were overshadowed by the Wal-Mart warning for the second quarter. Dell reported 1Q profit of 37 cents vs. 28 cents a year ago.

The sell-off in gold, silver and other commodities, earnings warning from Wal-Mart and continued rumors related to hedge fund losses overpowered other news in the market. The averages were down more than 1% except that the tech stocks heavy Nasdaq was down less than 0.4%.

U.S. Commerce department reported April sales rise of 1.4% from March and 8.7% from a year ago. Gasoline station sales were up 19.8% and sales of non-store retailers were up 12.4%.

The Census Bureau estimated that April retail sales were $344.9 billion, an increase of 1.4% from the previous month and up 8.6% from April 2004. Total sales for the February through April 2005 period were up 7.5% from the same period a year ago. The February to March 2005 percent change was revised from +0.3% to +0.4%.

Building materials reported 8.1% sales growth and Auto sales were up 4.8% from a year ago.

Shares of CUNO Inc, water filtration company surged by $15 ( 29%). 3M has agreed to buy the company for $1.35 billion. 3M plans to pay $72 cash and assume $60 million in debt. 3M believes that global water purification market of $30 billion is growing at 8% a year.

Oil in NY trading fell to $48.85, 16% lower from the peak in April. The Wednesday inventory report showed six-year high inventory as of last week. Oil inventories are now at 329.7 million barrels, 30 million barrels more than a year ago.

JP Morgan says in a research note that it expects imminent restructuring of Dow Jones assets. During the day shares were up 5%. Online properties of Dow Jones are witnessing sustained growth.

Shares of discount retailer Target were 1.75% on 26% rise in quarterly profit. Same-store sales were up by 6.2% on 13% revenue growth.


S&P - DOWN 1.00%
DOW - DOWN 1.08%
NASDAQ – DOWN 0.39%


In Other News

Commerce Department reported April retail sales rise 1.4%, most economists had expected 0.8% rise.

According to Eurostat, Eurozone recorded 0.5% rise in GDP for the region, led by a surprise 1.0% export led growth in Germany for the 1Q. The Netherlands GDP shrank by 0.1% and Italy by 0.5%.Italy suffered a second quarter of declining growth.

U.S. dollar rose across all major currencies, Yen fell 0.7% and Euro fell 0.5%.

In NY trading gold came under pressure on rising dollar, and fell during the day $3.50.

In Asian markets, Hong Kong, Singapore, Sydney, and Mumbai close higher but Tokyo close 0.38% lower on lack of foreign buying. European shares closed higher with Paris up 0.9%, Frankfurt up 0.5% and London up 0.4%.

NTT, Japanese telephone giant, reported 10% profit rise on sale of stake in AT&T wireless and one-time gain in real estate unit sale. The underlying telephone business continues to suffer declining revenue, operating profit and customers.

Sabre Holdings agree to acquire UK travel agency Lastminute.com for $1.08 billion.

Deutsche Telekom reported 1Q profit jump of 60% on growth in wireless subscriber growth in the U.S. and high-speed internet subscriber growth in Europe. However, the net debt rose to Euro 3.1 billion and free cash flow turned negative.

Canadian government may test its ability to govern on May 19th, budget vote on the day may unravel the ruling Liberal party government.

Brazil led two day summit in Rio brought together the heads of 34 nations from South America and Middle East. The recent division between Argentina and Brazil flared in open as President of Argentina left in the middle of the summit to voice his displeasure.

Earnings Headlines

Target, discount retailer, reported 1Q profit of 55 cents vs. 47 cents a year ago on 13% rise in sales.

United Airlines reported 1Q loss of $1.1 billion, its 19th quarterly loss. The company won court battle, this week, to transfer the pension obligations to U. S. government agency.

American Eagle Outfitter, teenage retailer, reported 1Q profit of 35 cents vs. 17 cents a year ago and beat the estimates by a penny.