Stocks, Gold and Oil Markets Rally

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

Housing starts continued at two million units in May but buiding permits for the single-family unit declined by more than 4%. The Energy department weekly report on heating oil inventory put traders on the edge. Rally in the metals in Asian and European markets was carried thorugh in the NY trading for the day.

Day’s events were driven by housing starts, unemployment claims, oil inventory report and strong rally in housing and mining stocks. On earnings front Goldman Sachs had its first decline in quarterly earnings in three years but Yum Brands, Clorox, and Potash had earnings and backed the guidance for the year.

HOUSING STARTS AND BUILDING PERMIT REPORT

The U.S. Census Bureau and the Department of Housing and Urban Development jointly announced the following new residential construction statistics for May 2005.

Privately-owned housing units authorized by building permits in May were at a seasonally adjusted annual rate of 2,050,000. This is 4.6 percent below the revised April rate of 2,148,000 and is 3.7 percent below the May 2004 estimate of 2,129,000.

Single-family authorizations in May were at a rate of 1,619,000; this is 1.3 percent below the April figure of 1,640,000. Authorizations of units in buildings with five units or more were at a rate of 348,000 in May.

Privately-owned housing starts in May were at a seasonally adjusted annual rate of 2,009,000. This is 0.2 percent above the revised April estimate of 2,005,000 and is 1.8 percent above the May 2004 rate of 1,974,000.

Single-family housing starts in May 2005 were at a rate of 1,704,000; this is 4.7 percent above the April figure of 1,627,000. The May rate for units in buildings with five units or more was 266,000.

Privately-owned housing completions in May were at a seasonally adjusted annual rate of 2,071,000. This is 6.9 percent above the revised April estimate of 1,937,000 and is 8.5 percent above the May 2004 rate of 1,909,000.

Single-family housing completions in May 2005 were at a rate of 1,699,000; this is 4.9 percent above the April figure of 1,619,000. The May rate for units in buildings with five units or more was 318,000.


UNEMPLYOMENT CLAIMS REPORT

In the week ending June 11, the advance figure for seasonally adjusted initial claims was 333,000, an increase of 1,000 from the previous week's revised figure of 332,000. The 4-week moving average was 335,000, an increase of 2,750 from the previous week's revised average of 332,250.

The advance seasonally adjusted insured unemployment rate was 2.1 percent for the week ending June 4, an increase of 0.1 percentage point from the prior week's unrevised rate of 2.0 percent.

The advance number for seasonally adjusted insured unemployment during the week ending June 4 was 2,641,000, an increase of 58,000 from the preceding week's revised level of 2,583,000. The 4-week moving average was 2,596,500, an increase of 11,250 from the preceding week's revised average of 2,585,250.

ENERGY REPORT

Summary of Weekly Petroleum Data as reported by EIA for the Week Ending June 10, 2005

U.S. crude oil refinery inputs averaged over 16.3 million barrels per day during the week ending June 10, up 281,000 barrels per day from the previous week's average. Refineries operated at 96.7 percent of their operable capacity last week. Although refinery inputs increased significantly, gasoline production declined last week, averaging nearly 9.0 million barrels per day. However, distillate fuel production increased substantially, averaging 4.4 million barrels per day, the largest weekly average ever.

U.S. crude oil imports averaged over 10.6 million barrels per day last week, up 397,000 barrels per day from the previous week. Over the last four weeks, crude oil imports have averaged nearly 10.5 million barrels per day, which is 80,000 barrels per day more than averaged over the comparable four weeks last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged over 1.0 million barrels per day, while distillate fuel imports averaged 296,000 barrels per day.

U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) fell by 1.8 million barrels from the previous week. At 329.0 million barrels, U.S. crude oil inventories remain well above the upper end of the average range for this time of year. Total motor gasoline inventories declined by 0.9 million barrels last week, putting them in the upper half of the average range. Distillate fuel inventories climbed by 2.5 million barrels last week, but remain in the lower half of the average range for this time of year.

Increases were seen in both high-sulfur distillate fuel (heating oil) and low-sulfur distillate fuel (diesel fuel) inventories. Total commercial petroleum inventories rose by 2.8 million barrels last week, putting them above 1 billion barrels for the first time since the week ending September 20, 2002.

Total product supplied over the last four-week period has averaged nearly 20.7 million barrels per day, or 2.0 percent more than averaged over the same period last year. Over the last four weeks, motor gasoline demand has averaged nearly 9.5 million barrels per day, or 3.0 percent above the same period last year, while distillate fuel demand has averaged 4.1 million barrels per day, or 6.5 percent above the same period last year. Kerosene-type jet fuel demand is up 4.6 percent over the last four weeks compared to the same four-week period last year.

EARNINGS

Goldman Sachs reported 2Q earnings of $1.71 vs. $2.30 a year ago on 13% lower revenue missing the estimates of $1.71. This was the first quarterly earnings decline in three years. Trades related to correlation bets and GM bonds were partly blamed by the market observers to woes of earnings at Goldman. Recently Morgan Stanley, Bear Stearns and Lehman Brothers reports have shown weaker underwriting revenues. The stock jumped up 3.6%.

Winnebago Industries, motor home & RV manufacturer, posted 3Q profit decrease of 52 cents per share vs. 51 cents for the prior-year period which included charge of13 cents a share beating expectations of 49 cents a share. The results are due to poor sales and reduced production.

Actuant, industrial company, announced record 3Q earnings of 68 cents per share compared with 29 cents last year on early disposal of debt. Net sales reached record increase of 34%.

Progress Software, infrastructure software supplier, posted 2Q 43% increase in earnings of 30 cents a share compared with 21 cents a year earlier. During the quarter the company repurchased about 10, 000 shares of its stock for $0.3 million.

J.M Smucker, food maker, reported 4Q net income of 38 cents a share down from 44 cents a year ago with a loss of 7 cents per share of discontinued operations included. Net income for 2005 was $2.24 vs. $2.21 last year.

Entegris, materials integrity manager, reported 3Q net income of 9 cents per share vs. 12 cents a year ago exceeding analysts’ expectations of earnings between 7 and 8 cents a share. For the fourth quarter the company predicts flat sales and earnings in the range of 4/5 cents a share.

METALS AND OIL MARKET

Crude oil up $1.01 cents and closed at $56.58 per barrel along with oil gasoline, heating oil and natural gas traded up. Traders are concerned of the decline in heating oil inventory.

Metals markets in the day’s trading showed sizable gains in copper, silver and gold metals. Gold closed up by $7 to $437.90, silver is up 4 cents to $7.37 and copper is up 2.05 cents to $1.5695.

In London trading, mining and energy stocks traded higher on ABN Amro upgrading BHP to Buy. Shares of Corus, BHP, Rio Tinto and Chilean copper miner Antofagasta traded by better than 2%. Mining stocks in NY trading have been higher as well with Phelps Dodge leading the rally and up by 2.6%.

INTERNATIONAL MARKETS

Asian-Pacific stocks closed mostly higher boosted by gains in commodity shares together with crude oil and metals futures. Japanese averages ended almost flat reflecting losses from exporter issues. China’s Shanghai Composite index rose 1.2%, Taiwan’s Taiex was up 0.5% and South Korea’s Kospi ended up 0.1%. The greenback traded higher at 109.31 yen compared with 109.21 yen in late Wednesday trading.

Markets in Europe closed up due to gains in resource stocks, strong metals and oil futures after an upgrade of BHP Billiton and BP PLC. Germany’s DAX 30 ended 0.7% up, France’s CAC 40 was up 0.02% and London’s FTSE 100 rose 0.5%. The euro declined 0.2% to $1.2083.

IN OTHER NEWS

Airbus received commitment for 100 planes from a start-up Indian discount carrier based in New Delhi. India has seen a string of new airlines focused on domestic air travel market with its government deregulating air travel. India has recently signed open skies agreements with the U.S. and other countries including Singapore.

Latin American markets rallied with Brazil in the lead with 1.15% gains followed by Chile 0.79%, Mexico 0.23% and Argentina 0.10%.

German utility company E.On said that it has agreed to sell Ruhrgas Industries to a private equity firm CVC Capital Partners for $1.8 billion. The company expects to book a gain of euro 600 million and expect to complete the deal by August of this year.

Pfizer has agreed to buy pharmaceutical company Vicuron, bacterial and fungal infection drug developer, for $1.9 billion. Drugs from Vicuron may be on the market in less than three months. The stock jumped 74% on Nasdaq to $27.85.

EU continues to play hard ball with developing countries on farms subsidy. In the latest round of salvo, EU trade chief said that advanced developing countries China, Brazil and India must open up markets for European industrial goods before EU will relax farm subsidies. EU farmers now less than 10 million mostly in France are creating havoc in global farm trade hurting more than one billion farmers in China, India and Brazil.