Market Averages Rebound On Earnings

123jump.com Staff
02 Aug, 2006
New York City

As market reached close Dow gained 74 points , Nasdaq was up 17, and S&P rose 8. Positive earnings from P&G, Time Warner, MasterCard, Blue Nile, and Cognizant supported market advance. P&G, aided by price increases, reported positive earnings of more than 4%. Time Warner posted positive earnings of 24 cents versus a loss of 9 cents a year ago. AOL lost close to a 1 million subscribers in the quarter. Oil gained 90 cents to close at $75.81.

[R]4:15PM Stocks Rise on Earnings and Oil trades above $75 per barrel.[/R]

-Yield on 10-year bond closed at 4.969% and 30-year bond closed at 5.064%.
-Crude oil gained 90 cents to close at $75.81.
-Gold gained $5.30 to close at $651.60.

-Asian Markets were mixed, being led by Indonesia which closed ahead at 1.65%. Japan gained 0.15%. Philippines lost 3.35%.

-European Markets closed higher today, led by France which gained 1.58%, and Norway which gained 1.48%. Switzerland declined 0.46%.

-Latin American Markets traded higher, led by a 1.71% gain in Brazil. Mexico gained 0.89%. Canada gained 0.83%.


[R]12:30PM European markets closed steeply higher.[/R]
European markets finished Wednesday session sharply higher, boosted by positive profit outlook from Danone and Cadbury Schweppes, as well as strong gains on Wall Street, following better-than-expected earnings from Time Warner and Procter & Gamble. British confectionery maker Cadbury Schweppes jumped 3.2% after saying first-half net profit rose to 819 million pounds on 22.5% increase in revenue. Food group Danone rose 4.4% after it reported a stronger-than-forecast rise in first-half profit and lifted its revenue growth forecast. The German DAX 30 surged 1.5%, the French CAC 40 soared 1.6%, and London FTSE 100 climbed 0.9%.

Oil prices hit $77 as a tropical storm strengthened and headed toward the Gulf of Mexico. Light crude September delivery rose $1.29 to $76.20 a barrel. London Brent gained $1.22 to $77.12. The dollar traded mixed versus major currencies. The euro traded at $1.2813, down from $1.2817. The dollar bought 114.49 yen, down from 114.52. The British pound stood at $1.8784, up from $1.8758. European gold prices traded higher. In London the precious metal traded at $654, up from $638.80 per ounce. In Zurich gold traded at $653.80, up from $638.18. Silver closed at $12.15, up from $11.45.


[R]11:30AM stocks traded higher on earnings.[/R]
Stock markets were bullish Wednesday, recovering from recent losses with the help of strong earnings reports. Time Warner ((TWX)) gained 3% after posting strong revenue gains in its telecommunications divisions. Time Warner''s AOL unit unveiled its plan Wednesday to offer e-mail, software and other products free of charge, trying to boost its online advertising business. Procter & Gamble ((PG)) rose 4% on 36% profit jump and higher revenues. Positive outlook by software maker Adobe Systems Inc.''s ((ADBE)) renewed optimism about corporate profits, sending the stock up 13%.
Cigna ((CI)), insurance provider, rose 11% after the company reported Q2 earnings of $2.31 per share, exceeding analyst estimates of $1.94 per share. Higher oil prices lifted energy companies'' shares, with Exxon Mobil Corp. ((XOM)) and ConocoPhillips ((COP)) among the biggest contributors to the S&P 500''s advance. In late morning trading, the Dow Jones industrial average rose 51.86, or 0.47%. The Standard & Poor''s 500 index climbed 6.27, or 0.49%, and the Nasdaq composite index gained 11.51, or 0.56%. Bonds were stuck in a narrow trading range for the third straight day, with the yield on the benchmark 10-year Treasury note steady at 4.98% from late Tuesday.


[R]Crude oil and gasoline inventories moved lower.[/R]
Crude oil inventories declined in the most recent week, according to government statistics released Wednesday. Meanwhile, stockpiles of gasoline also ticked down, while those of distillate fuel oil continued a recent streak of gains. The Department of Energy''s Energy Information Administration said that crude oil inventories fell 1.8 million barrels in the week ended July 28. Specifically, the measure dropped to 333.7 million barrels from the previous week''s level of 335.5 million barrels. The decline followed a flat performance in the previous week. Oil inventories for the July 28 week were 4% higher than last year. Meanwhile, gasoline inventories showed a week-over-week decline of 100,000 barrels. This added to a draw down of 3.2 million barrels in the previous week. The level of gasoline inventories was 1.2% above last year. Distillate fuel oil had an inventory advance of 700,000 barrels during the week. This built on a recent streak of gains, including an advance of 800,000 barrels in the previous week.


[R]10:30AM Sustained buying in large-cap stocks raised the Sensex on Wednesday.[/R]
The Indian Sensex ended with a spurt of 124.53 points, or 1.16%, on 10,876.19. The benchmark index traded in the range of 161 points, between the high and low of the day. The market-breadth was firm. In today’s trading 1,517 shares advanced on BSE, only 876 declined and 94 shares were unchanged. The turnover on BSE was Rs 2,657 crore, higher than the turnover on Tuesday of Rs 2,203 crore.

Tata Motors led the gainers, moving up 3.68%, to Rs 759.50. Tata Motors reported on Tuesday that vehicle sales advanced 44.5%. Tata Steel also advanced 3.65% to Rs 513.85 on 16.74 lakh shares as well as NTPC gaining 3.48% to Rs 120.10 on 10.26 lakh shares. BHEL gained 2.21% to Rs 2,150 on 3.63 lakh shares, soaring earlier to a high of Rs 2,188, as buying intensified.

Large-cap Reliance Industries advanced 0.77% to Rs 989.50 on 17.28 lakh shares. It had recovered sharply form a low of Rs 979.20, as buying resumed. Reliance Retail is planning to set up 23 retail shops in Punjab at an investment of $107 million over the next six months. Reliance Industries was the most-actively traded stock on BSE with a total turnover of Rs 170.31 crore followed by Tata Steel with a turnover of Rs 84.30 crore.

Cement shares also performed well on strong buying demand. Saurashtra Cement was up 4.55% to Rs 62, Shree Cements gained 3.71% to Rs 942.20, Gujarat Ambuja Cements advanced 2.81% to Rs 106, JK climbed 2.40% to Rs 156, Birla Corporation notched up 2.40% to Rs 263.40 and ACC gained 1.56% to Rs 867.55.

Decliners were led by a loss of 1.04% in Maruti Udyog to Rs 775, Hindustan Lever off 0.46% to Rs 227.70 and ICICI Bank declining 0.36% to Rs 547. Grasim shed 0.38% to Rs 2,072.00 and HDFC Bank lost 0.03% to Rs 780.50.

Among other stocks, tractor & utility vehicles large-cap Mahindra & Mahindra gained 2.38%, to Rs 599 after the company posted 39% growth in vehicles sales for July. Granules India jumped 20%, to Rs 88.20 on 2.89 lakh shares. ABG Shipyard gained 7.15%, to Rs 240 on registering 96% surge in Q1 June 2006 net profit, HCL Technologies spurted 3.76%, to Rs 535.25 and Goodyear India soared 11.70%, to Rs 85 on registering 83% growth in net profit for the Q2 June 2006.


[R]9:45AM Stocks opened in the positive, despite rising oil.[/R]
Stocks showed some strength at opening on better-than-anticipated results from Time Warner, although climbing oil prices limited early gains. Time Warner ((TWX)) rose 3% on $1 billion profit in Q2. Procter & Gamble ((PG)) climbed 4% on 36% profit rise in Q4. Tech shares were leading gainers in early hours after software maker Adobe Systems Inc. ((ADBE)) affirmed its quarterly outlook and navigation products company Garmin Ltd.''s ((GRMN)) profit beat forecasts. Shares of Adobe Systems climbed 12%, while Garmin''s gained 5%. Cognizant Technology Solutions ((CTSH)) rose 6% after reporting Q2 profit rise of 37 cents a share from 25 cents a share a year ago on 59% revenue jump.

Ford Motor Co. ((F)) gained 2.9% on reports that the company launched a strategic review of ailing business units that could lead to a sale of those divisions or broader strategic alliances with other automakers. General Motors ((GM)) after the close on Tuesday revised its Q2 results, widening its loss by $200 million to reflect a change in the estimated tax provision relating to its pending sale of a majority interest in its GMAC financing unit. Philips Electronics ((PHG)) rose 4% in Amsterdam after it reportedly agreed to sell its semiconductor making unit to Kohlberg Kravis Robert and Silver Lake Partners. Blue Nile ((NILE)), online jewelry retailer, jumped 31% on strong quarterly earnings. In midmorning trading, the Dow Jones industrial average rose 53.95, or 0.48%. The Standard & Poor''s 500 index climbed 6.06, or 0.48%, and the Nasdaq composite index gained 17.28, or 0.84%. Bonds were stuck in a narrow trading range for the third straight day, with the yield on the benchmark 10-year Treasury note rising slightly to 4.99% from 4.98% late Tuesday.


[R]9:00AM Stock futures pointed to a strong opening on P&G, Time Warner.[/R]
U.S. stock futures pointed to a bullish start on Wednesday, with Time Warner and Procter & Gamble reporting higher-than-expected quarterly results. Technology shares are also expected to move higher as software maker Adobe Systems Inc. ((ADBE)) affirmed its quarterly outlook, helping to ease investors'' concerns about tech companies after several high-profile disappointments.

Time Warner Inc. ((TWX)), the world''s largest media company, posted a Q2 profit of $1 billion in contrast to a loss of $409 million a year earlier, citing cable TV business growth. Revenues edged up 1% to $10.7 billion. Procter & Gamble ((PG)) said its Q4 profit grew 36% to 55 cents per share from 52 cents per share last year on 25% revenue increase. Shares of Adobe rose 4.2% in Europe. Video game publisher Electronic Arts Inc. ((ERTS)) could also lend support, a day after it posted a smaller-than-expected loss and said this quarter''s revenue should top analyst estimates. S&P 500 futures were up 2.70 points, above fair value. Dow Jones industrial average futures rose 33 points, and Nasdaq 100 futures were up 6.25 points.

Allied Capital, ((ALD)), management investment company, reported that its Q2 net income fell to 24 cents a share from $2.29 a share a year ago. Net investment income per share came to 35 cents versus 11 cents a year ago.

MasterCard Inc, ((MA)), global payment solutions company, reported it lost $2.30 a share, compared to net income of 89 cents a share in the year-ago period. If not for items, earnings in the latest period were 74 cents a share. Revenue advanced 9.7%. The company beat analysts’ forecasts for earnings of 62 cents a share. Expenses jumped 93.4%, to $1.1 billion due to spending on its 2006 World Cup sponsorship as well as a contribution to the MasterCard Foundation and increased personnel costs.

PG&E Corp, ((PCG)), gas and electric utility, reported its Q2 net income fell to 65 cents a share, from 70 cents a share in the year-earlier period. Revenue at the company rose more than 20% to $3.02 billion from $2.5 billion. The company topped analysts’ forecasts for earnings by a penny.

Clorox Co, ((CLX)), consumer products company, reported Q4 profit fell, as the company raised prices to offset soaring commodity costs. The company earned 92 cents a share, down from $1 a share in the year-ago period. If not for costs related to stock-based compensation and severance charges, it earned $1.03 a share. Results also included a 5 cents a share charge related to the retirement of Chairman and Chief Executive Jerry Johnston. Net sales advanced to $1.32 billion from $1.25 billion. The company missed analysts’ expectations for it to earn $1.04 a share.

The Brink''s Company, ((BCO)), transportation, teller machine servicing, currency and deposit processing company, reported Q2 net income doubled to 62 cents a share, from 27 cents a share in a year-ago period. Operating income was 42 cents a share, up from 4 cents a share in the year-ago period. Revenue grew to $697.5 million from $633.5 million. The company beat by wide margin analysts’ forecasts for earnings of 49 cents a share.

Gerdau Ameristeel Corp, ((GNA)), steel producer, reported Q2 earnings rose to 41 cents a share, from 24 cents a share a year earlier, topping analysts’ expectations for earnings of 35 cents a share. Revenue rose to $1.21 billion from last year''s $961.1 million, with shipments of finished steel growing 13% and average mill prices rising 9.8%.


[R]8:00AM $10.26 billion offer for Philips Electronics NV''s chip unit.[/R]
Kohlberg Kravis Roberts & Co. and Silver Lake Partners are reportedly close to a deal with Philips Electronics NV''s chip unit. In its online edition the Wall Street Journal said the deal may be worth more than eight billion euros, or $10.26 billion, citing people familiar with the matter.

In July, Philips'' ((PHG)) shares advanced on news that three groups of private-equity firms were in the final stage of bidding more than $10 billion for the company''s semiconductor division. The other bidding groups were Blackstone Group, London-based Permira Advisors and Texas Pacific Group, and Apax Partners Worldwide LLC, Bain Capital and Francisco Partners.

In June Philips said it was planning to spin off its semiconductors unit in an initial public offering during the second half of the year as part of an effort to produce more predictable earnings.

Since 2005 Philips has been seeking a separate legal structure for its chip unit, which had 2005 sales of 4.62 billion euros, or $5.8 billion and makes products for mobile phones and cars. Company’s shares rose on Wednesday, with Dutch-listed shares rising 3.9%.


[R]7:30AM Asian markets recover from poor start on takeover battle.[/R]
Asian markets were higher Wednesday. The Nikkei 225 Average gained 0.15% to 15464.29. On the corporate front, shares of Toyota declined 0.5%. Sales data posted Tuesday revealed the auto maker has overtaken Ford to rank as the No. 2 selling brand in the U.S. behind General Motors. Mitsubishi shares shed 2% despite reporting its quarterly net loss narrowed. Shares of Hitachi sank 3.5% following reports it may face a lawsuit over possible design flaws in its nuclear power plant turbines. Sony lost 1%.

Hong Kong shares finished higher, led by property developers on hopes the U.S. interest rate-hike cycle is nearing an end. The Hang Seng Index gained 0.7% to 17032.75. Sun Hung Kai Properties climbed 1.9%. Cheung Kong rallied 1.1%, while Henderson Land Development gained 1.7%.

South Korean shares ended higher, with automobile and technology stocks leading gainers. Telecommunications stocks bucked the trend. The Korea Composite Stock Price Index, or Kospi, ended 0.6% higher at 1295.11. Turning to other markets around the region, the Weighted Price Index of the Taiwan Stock Exchange gained 0.5% to 6471.42 while Australia''s S&P ASX/200 shed 1% to 4931.5.


[R]6:30AM Upbeat earnings outlooks help Europe to a strong start.[/R]
European markets were higher on Wednesday morning. The U.K. FTSE 100 index gained 0.5% at 5,970, the German DAX Xetra 30 index rose 0.7% at 5,634 and the French CAC-40 index climbed 0.8% at 4,988. British Cadbury Schweppes climbed 3% stating that first-half net profit advanced to 819 million pounds from 237 million pounds on 22.5% revenue growth and in France, Danone gained 2.5% reporting that its first-half profit rose stronger than forecast and it upped its revenue growth view.

In the banking sector, French bank BNP Paribas advanced 2.4% reporting that its second-quarter net profit gained 30.6% Swiss Credit Suisse Group shed 3.5% as it disappointed the market, despite the unexpectedly strong growth after second-quarter profits came only in line with market expectations.

Oil prices rose Wednesday as traders nervously observed a tropical storm in the Caribbean and the fighting in the Middle East, fearing supply threats. Light sweet crude for September delivery added 38 cents to $75.29 a barrel. September Brent gained 43 cents to $76.32 a barrel at London''s ICE Futures exchange.

Gold hit a high of $649.75 an ounce as firm oil prices and a volatile US dollar sparked off speculative buying. The euro was slightly lower against the U.S. dollar Wednesday as markets awaited signals from the European Central Bank on its future interest rate course. The euro bought $1.2813 in early European trading, just below the $1.2817 it bought in New York late Tuesday. The British pound slid to $1.8752 from $1.8758. The dollar was barely lower against the Japanese currency, falling to 114.47 yen from 114.52 yen.