Kinder Morgan up 21% on Bid Offer

Elena
30 May, 2006
New York City

Stocks opened sharply lower Tuesday as investors locked in recent profits. Dow component Wal-Mart declined 2% after the retailer said its May same-store sales are expected to be near the low end of its previous guidance. General Motors fell 3% after Deutsche Bank downgraded its rating on the auto maker. Kinder Morgan climbed 21% after an investor group led by its management offered to acquire the company for $100 per share in cash.

[R] 9:45AM Stocks opened steeply down.[/R]
U.S. stock markets opened in the negative, reflecting weaker-than-expected same-store sales for Wal-Mart, uncertainty about interest-rate hikes, and concerns over rising oil prices and sliding U.S. dollar.

Investors turned to profit taking after three strong sessions in a row last week. Wal-Mart ((WMT)) led the Dow lower after the retailer said its May same-store sales are expected to be near the low end of its previous guidance. The stock dropped 2%. Another Dow component General Motors ((GM)) declined 3% after Deutsche Bank downgraded its rating on the auto maker to Sell from Hold. In early trading, the disk drive, brokerage, and housing sectors posted weakness. Among disk drive stocks, SanDisk ((SNDK)) posted a significant loss following negative comments. Shares of Goldman Sachs ((GS)) fell 0.7% after Chief Executive and Chairman Henry Paulson was nominated to replace Treasury Secretary John Snow. In the first hour of trading, the Dow sank 56.11, or 0.5%. The Standard & Poor''s 500 index was down 4.95, or 0.39%, and the Nasdaq composite index dropped 11.22, or 0.51%. Bonds slipped, with the yield on the 10-year Treasury note edging up to 5.06% from 5.05% late Friday.


[R]9:00AM Stock futures were weak on Wal-Mart same-store sales.[/R]
After the long holiday weekend, the U.S. stock futures were pointing to a lower market opening, as Wal-Mart Stores Inc. posted lower same-store sales for May and concerns about interest rates increases weighed ahead of key economic data due out later in the week. S&P 500 futures were down 5 points, below fair value. Dow Jones industrial average futures were down 39 points, and Nasdaq 100 futures were down 8.75 points.

Wal-Mart ((WMT)) reported Saturday 2.3% same-store sales increase, the low end of its forecast, citing steep gasoline and utility prices. The world''s biggest retailer had forecast growth in the range of 2% to 4%. The FOMC minutes, due out on Wednesday, are expected to shed some light on the outlook for interest rates. In other corporate news, Deutsche Bank lowered its rating on General Motors Corp. ((GM)) to Sell from Hold, citing valuations. Shares of the car maker declined nearly 3%. Kinder Morgan ((KMI)) rose 22% in pre-market trading after the company revealed that an investor group led by its Chairman and CEO offered to acquire the company for $100 per share in cash.

Columbus McKinnon Corp((CMCO)), maker of material handling products, reported Q4 earnings of $2.53 a share, up from a profit of 56 cents a share a year-ago. Q4 includes a tax benefit gain of $38.6 million reflecting the reversal of a valuation allowance against deferred tax assets, primarily U.S. federal net operating loss carryforwards, and $600,000 in after-tax expenses related to debt refinancing activities. If not for items in both periods, the company posted a pro forma profit of 52 cents a share in Q4, up from a equivalent profit of 29 cents a share a year-ago. Sales advanced 1.8% in the period to $147.1 million from $144.5 million in the sametime a year ago. The company beat analysts’ estimate for a profit of 46 cents a share. The company also said it expects capital spending of between $8 million and $10 million in fiscal 2007.

Vodafone Group, ((VOD)), mobile operator, reported it lost 17.23 billion pounds ($32 billion) in the year ending March 31 from continuing operations, hurt by writedowns to its German and Italian businesses, while revenue advanced 10% to 29.35 billion pounds. The company added it will return 9 billion pounds ($16.7 billion) to shareholders in August, with 6 billion pounds coming from the sale of its Japanese operations.

Bombardier, aerospace and transportation company, reported Q1 net income dropped 56% to a penny a share, from 3 cents a share in the year-ago period on 6.1% revenue decline. Earnings from continuing operations before special items came to 2 cents against a penny. Revenue dropped to $3.53 billion from $3.76 billion.


[R]7:30AM Asian stocks closed generally lower.[/R]
Asian markets closed broadly down. Japan’s benchmark Nikkei 225 index dropped 56.23 points, or 0.4%, to close at 15859.45. Seven & I Holdings edged down 1.5% and retailer Daiei was down 3.3%. Auto stocks also suffered. Nissan Motor lost 0.9% and tire maker Bridgestone declined 2.3%.Hong Kong''s blue-chip Hang Seng Index dropped 105.88 points, or 0.7%, to 15,857.89. Mobile operator China Unicorn shed 2.8% and telecommunications company China Netcom lost 2.4%. Banks finished mixed. HSBC Holdings inched 0.2% up, while Hang Seng Bank lost 0.4%. South Korea’s Composite Stock Price Index, or Kospi, finished down 0.9%, or 11.52 points, at 1317.70. Kookmin Bank, the country’s major lender, shed 2.2%, while Korea Exchange Bank advanced 2.6%. Exporters also lost, with Samsung Electronics dropping 1.6% and LG.Philips LCD falling 3.3%. Car maker Hyundai Motor plunged 4.8%. Singapore''s Straits Times Index finished up 1.63 points, or 0.1%, at 2441.54 points to buck the downtrend but Thai Beverage, the region’s largest IPO, failed to make an impressive debut as investors were worried about the IPO’s large size. Australia''s benchmark S&P/ASX 200 index fell 4.1 points to close at 5105.4 points. BHP Billiton dropped 0.5% and Rio Tinto shed 1.3%.


[R]6:30AM European shares decline on fears over interest rates and oil.[/R]
European markets traded lower in the morning. London’s FTSE 100 dropped 1.3% to 5,716.5, while Frankfurt’s Xetra Dax fell 1.1% to 5,691.51 and the CAC 40 in Paris, shed 1.1% to 4,961.06. Developments in the steel sector became obscured as opposition to Arcelor’s merger with Severstal stepped up. Mittal Steel, on the other hand said it would be content with a minority stake in Arcelor In this way, Mittal Steel, together with Severstal would become the two biggest shareholders. Stocks in Arcelor shed 0.9% while Severstal dropped 2.6% and Mittal edged down 0.8%. The chances of a more aggressive 50-point hike affected the market to a greater extent, hitting bank stocks. Among the biggest decliners were Commerzbank, falling 3.1% and National Bank of Greece, shedding 2.2%. There was a lot of volatility in the oil sector. OMV plunged 4.5% and France’s Total slid 1.1%. UK benchmark Vodafone had all eyes on its final results. It posted surprising revenue results, proving its loss was not as bad as expected.

Light, sweet crude oil for July delivery rose 4 cents to $71.41 a barrel, while July Brent crude at London''s ICE Futures exchange advanced 3 cents to $70.62 a barrel. Gold traded higher on Tuesday at $654.30 an ounce, up $5.30 an ounce from Monday''s close of $649.00. The dollar fell against the euro. The European currency advanced to $1.2836 from $1.2751, while the British pound rose to $1.8762 from $1.8594. The dollar fell more than half a yen to below 112 yen at one point before rising again to 112.01 yen.