Futures Recover from Steep Losses

Elena
07 Jun, 2006
New York City

Stock futures indicated a fairly positive start of Wednesday session, supported by a late upward momentum yesterday. Market is expected to follow the fashion of volatile trading on growing inflation and interest-rate concerns. Shares of Google rose 1.3% before the opening bell after one of the company''s founders met with U.S. lawmakers to press for legislation that would prevent Internet access providers from charging Web sites more for faster content delivery.

[R]9:00AM Stock futures indicated a slightly positive start.[/R]
U.S. stock futures were pointing to a slightly higher opening, trying to gain some ground after the steep declines posted in the previous two sessions and somewhat helped by the upward momentum late on Tuesday. Market has beenvolatile recently on higher interest-rate concerns which have been growing since the Fed Reserve Chairman and other officials made comments on inflation, suggesting that the increase of the key interest rate will continue. Investors will listen closely for clues about rates in speeches from Fed officials later on Wednesday ahead of the approaching Fed''s policy meeting on June 28-29. Among stocks, shares of anti-virus software maker Symantec Corp. ((SYMC)) jumped 6.4% to $16.36 in pre-market trading after the company announced a deal with IBM ((IBM)). Shares of Google ((GOOG)) rose 1.3% before the opening bell after one of the company's founders met with U.S. lawmakers to press for legislation that would prevent Internet access providers from charging Web sites more for faster content delivery. On the earnings front, BMC Software ((BMC)) and H&R Block Inc. ((HRB)) are due to report quarterly results on Wednesday. Standard & Poor's 500 futures were up 2.3 points, slightly above fair value. Dow Jones industrial average futures were up 17 points, and Nasdaq 100 futures were up 5.5 points.

Uti Worldwide Inc, ((UTIW)), freight forwarding and logistics company, reported Q1 net income fell to 17 cents a share, a penny down from the same period a year ago. Revenue at company grew 23% to $773.7 million from $630.2 million. The company beat analysts’ forecasts for earnings of 16 cents a share.

American Woodmark Corp, ((AMWB)), cabinet maker, reported Q4 net income advanced to 83 cents a share, almost double from 44 cents a share in the year-earlier period. The company beat the analyst forecast for a profit of 51 cents a share. Revenue at the company advanced 4%. The company sees its Q1 sales to be up by 0%-4%, with adjusted earnings of 65-70 cents a share and net income of 60-65 cents a share.

Analogic Corp, ((ALOG)), health and security systems manufacturer, reported Q3 net income dropped to 18 cents a share, from $2.07 a share in the year-earlier period. Revenue declined to $81.3 million from $84.6 million. Operating income plunged to 18 cents a share, from $2.14 a share. The company missed analysts’ forecasts fro earnings of 41 cents a share.

Veritas DGC Inc, ((VTS)), provider of integrated geophysical services, reported Q3 net earnings of 84 cents a share, up from 52 cents a year earlier on higher demand for the geophysical services it provides to the petroleum exploration business. The company reported sales of $236.2 million, up 35% from $175.5 million in the year-ago period. The company topped analysts’ expectations for earnings of 71 cents a share.

Ryanair Holdings PLC, ((RYAAY)), airline, reported a 12.5% rise in full-year net profits, to euro 301.5 million ($389 million) from euro268.1 million the year before despite absorbing a strong rise in the cost of jet fuel. Sales advanced 28% to euro1.69 billion ($2.18 billion) from euro1.32 billion. The company did not break out Q4 results. Ryanair added that fuel costs advanced 74% to euro462 million ($596 million), while the company''s other operating costs dropped 6% in the year. It attributed the results to the efficiency of the airline''s new Boeing 737-800 aircraft and better deals with airports.


[R]8:00AM Oil prices declined on positive developments over Iran''s nuclear program.[/R]
Crude oil prices retreated Wednesday, reflecting Iran’s positive reaction to the recent diplomatic developments with the West in connection to Teheran’s nuclear program. After receiving the latest proposal from EU foreign policy chief Javier Solana, Iranian nuclear negotiator Ali Larijani called the talks with Solana ‘constructive’ and said Iran would respond after studying the incentives. However, according to analysts, uncertainty over the outlook will keep a floor under oil prices. Light sweet crude for July delivery fell 35 cents to $72.15 a barrel in electronic trading on the Nymex by midday in Europe. July Brent crude futures on London''s ICE Futures exchange fell 26 cents to $70.55 a barrel. Gasoline futures fell less than half a cent to $2.1760 a gallon, while heating oil prices were down more than a cent to $2.0312 a gallon. Natural gas prices fell 12 cents to $6.265 per 1,000 cubic feet. Oil prices have largely hovered above $70 a barrel on mixed signs on U.S. gasoline consumption, the approaching hurricane season and geopolitical uncertainties, including the war in Iraq and violence in Nigeria, the United States'' fifth-largest supplier. Nigerian militants kidnapped five South Koreans in a bloody overnight raid on a Daewoo Engineering and Construction Co. compound in southern Nigeria. The militants said the workers were contracting for oil company Royal Dutch Shell PLC at the time.


[R]7:30AM Asian stocks finish lower on U.S. interest rate concerns.[/R]
Asian markets finished lower. The Nikkei fell 1.88% to 15,096.01. Banks and heavy-industry shares were among the biggest decliners in the Tokyo session. Resona Holdings dropped 4.48%. Kawasaki Heavy Industries fell 4.29%. Machinery maker Komatsu plunged 6.5% after KBC Securities lowered its rating to sell from buy on worries that the stock was overvalued. Exporters also dived on concerns that U.S. inflation could hurt overseas demand for Japanese products. Toshiba Corp shed 3.49% and Sanyo Electric Co fell 2.3%. In Hong Kong, the Hang Seng benchmark finished down 0.98%, to 15,816.55. Property shares widened their losses as U.S. interest rate expectations impacted the dollar-pegged economy. Sinopec Shanghai Petrochemical lost 8.97% after parent company Sinopec rejected reports it intended to buy out its subsidiary''s Shanghai-listed shares. The Bank of China, having advanced every day since its debut on the exchange on Thursday, was also down 1.4%. It said that an over-allotment option in its IPO had been exercised, making possible the sale of 3.84 billion additional shares at the initial price of HK$2.95. The move raised an additional $1.42 billion, putting the total value of the IPO to more than $11 billion.


[R]6:30AM European stocks continued the decline in mid morning trade.[/R]
European markets were lower in mid morning trade. London FTSE 100 lost 20 points, or 0.4% to 5,649.4. The Xetra Dax fell 9.1 points, or 0.2%, at 5,502.81 and the French CAC 40 dropped 14.4 points, or 0.3%, at 4,783.48. On the corporate front, Novartis gained 0.1%, after the Swiss pharmaceutical company launched a $569m bid for the UK biopharmaceutical, NeuTec Pharma. The move plans to strengthen its infectious details portfolio. Neutec traded 14.6% higher. Societe Generale lost 0.2%, after the French bank announced it was buying a 10% stake in Rosbank of Russia. The deal means that Rosbank will delay its planned flotation indefinitely.

France Telecom said that it intends to sell its majority stake in its directories business Page Jaunes as a non-core business. The sale of France Telecom’s 54% stake was expected to raise more than £3bn. Page Jaunes was the strongest gainer from the FTSE Eurotop 300, up 2.8 % higher, while France Telecom fell 0.2%.

Crude oil traded 26 cents lower at $72.24 a barrel by 0232 GMT, after shedding 10 cents on Tuesday. London Brent declined 23 cents to trade at $70.58. The dollar gained against the euro. In morning European trading, the euro purchased $1.2790, down from $1.2834 in New York on Tuesday. The British pound slid to $1.8573 from $1.8608 in New York, while the dollar advanced to buy 113.40 Japanese yen from 113.14 the day before.