Market Turns Positive for Now

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

Market averages trade higher as fears of inflation ease and oil remains steady and near three-month low. Shares of Home Depot, JC Penney, Staples, Big Lot, and TJX charges higher on posotive earnings report, but shares of Mother Works, Zales, Saks, Corning and Jabil Circuit decline. Deere and Home Depot lead the market rally. Casino and consumer staples trade up whereas techs suffer mild losses.

PPI for April rose 0.6% after rising 0.7% in March and 0.4% in February and core index, excluding food and energy, rose 0.3%. Energy prices rose for the third month in a row and rose 2.1% in April and 3.3% in March. Gasoline prices in April rose 2.6% and natural gas prices were up 6.6%.

The index for crude energy materials rose 7.2 percent in April, following a 5.5-percent increase in March. The majority of this acceleration was due to natural gas prices, which jumped 18.1 percent after declining 1.4 percent in March. The coal index increased 2.8 percent, after posting a 0.8-percent rise a month earlier. By contrast, the index for crude petroleum fell 6.3 percent in April, subsequent to a 17.8-percent gain in March.

The report suggests that Federal Bank will keep tightening in the coming moths. The Fed had raised interest rates eight times since June 2004.

Housing starts in April rose 11% to a seasonally adjusted 2.04 million annual rate after 17.6% decline in March. Building permits were up 5.3% to 2.13 million annual rate after declining 3.4% in March.

Housing completions in April were at a rate of 1.61 million up 7.6% from adjusted March 2005.

According to National Association of Realtors, 66 of 136 metropolitan areas registered double-digit price inflation for the existing homes. Florida cities, Palm Beach to Boca Raton and Sarasota and Bradenton area reported more than 35% price rise. Las Vegas registered 29%. Several cities in the mid-West and Texas reported more than 2% decline in prices.

Shares of Whole Foods continued its ascent and jumped another $2.39. Shares of Big Lots, Deere and Home Depot added 12%, 3% and 4% respectively on the back of positive earnings.

Several retail companies Saks, J.C. Penney, TJX, Staples, Big Lots, Zales reported better-than-expected earnings. Shares of Corning, Jo-Ann stores, Willbros Group and Exide Technologies declined better than 15%.


In Other News

U.S. industrial production fell by 0.2% after revised March gain of 1%, producers Price Index, a gauge of prices of products from farms, factories and refineries jumped up 0.6%. The mixed economic picture was not well received on Wall Street shares fell in the mid-day trading.

Collins & Aikman, U.S. auto parts maker, run by former cabinet official, filed for bankruptcy protection.



French Telecom operator and handset maker is pulling out of Chinese joint venture with TCL Communication. The Chinese company will buy back 45% of the stake.

In mid-day NY trading oil prices eased to three-month low to $48.30 per barrel.

Shares in UK were up but in Germany and France were down slightly. The positive earnings from UK companies such as Schroder, British pub operator Enterprise Inns, and British airport operator BAA. The oil giants, BP, Total, and Royal Dutch Shell gained more than 0.5%.

The U.S. net inflow of $45.7 billions funds was not enough to cover $55 billion in trade deficit.

Asian markets closed lower on worries of U.S. GDP growth, Tokyo and HK were down more than 1%, Sydney and Singapore dropped by more than 0.4%. Japan's 1Q annualized GDP growth was 5.3%, an increase from flat growth in the previous quarter.

Britain's Yell Group announced an agreement to buy US TransWestern for $1.58 billion cash which will help the company strengthen its market positions. It posted a rise in full-year adjustment profit.

Earnings Headlines

Home Depot, the largest home improvement store chain, reported 1Q profit of 57 cents vs. 49 cents a year ago on 8% revenue growth. Excluding one time charges the profit would have been 60 cents vs. 55 cents of estimates. Same-store sales rose 2.1% in the quarter.

Zale Corp, the largest fine jewelry retailer, reported 1Q profit of 28 cents vs. 22 cents a year ago on 3% revenue growth.

Staples, office supplies retailer, reported 1Q profit of 21 cents vs. 17 cents a year ago on 13% sales increase. Same-store North American sales were up 4% with total sales were up 9%.

J.C. Penney, department store chain, reported 1Q profit of 63 cents vs. 13 cents a year ago beating the estimates by 2 cents on revenue growth of 3.9% with same-store sales growth of 3%. For the full year it raised the guidance from $2.94-$3.06 to $2.96-$3.08.

The TJX companies, off-price apparel retailer, reported 1Q profit of 30 cents vs. 32 cents a year ago with same-store sales up 3% compared to 8% year ago.

Big Lots, close out retailer, reported 1Q profit of 7 cents vs. 5 cents a year ago on same-store sales up by 2.4% and lower interest charges and 3.1% lower number of transaction. The company backed the full-year guidance.

Saks Incorporated recorded net income of $17.1 million, or $.12 per share, for the first quarter ended April 30, 2005. The quarter included a net gain of $1.4 million (net of taxes), or $.01 per share, primarily related to the disposition of closed stores. The quarter also included approximately $2.0 million (net of taxes), or $.01 per share, of expenses associated with its previously disclosed investigation of alleged improper collections of vendor markdown allowances.
Barnes & Noble, book retailer, reported 1Q profit of 13 cents vs. 16 cents a year ago on same-store sales growth of 2.2% and total sales growth of 4%. The Internet sales were down 0.6% compared to a year ago. The quarter in the last year included gain of 6 cents for the GameStop division spin-off.

Deer & Co., Farm equipment maker, reported 2Q profit of $2.43 vs. $1.88 per share on sales growth of 13%. The company plans to have 7% to 9% lower production in the second half of the year to lower the inventory levels ahead of new product launches next year.

Corning, Flat panel and optical component maker, confirmed the 2Q guidance of 17 to 19 cents and revenue of $1.08 to $1.14 billion. The company reiterated the 2Q LCD volume growth of 10% to 20% and flat telecom sales growth from previous forecast of 5% growth.

Mother Works, maternity apparel retailer, reported 1Q of 2 cents vs. 5 cents a year ago on 11% revenue growth.

Jabil Circuit, electronic contract manufacturers, guided full-year net income of $1.09-$1.11 and core income of $1.27-$1.29 per share on projected revenue of $7.5 billion.