Three Averages for the Week Close Up

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

Latest read on consumer sentiment put investors in buying mood so much so that they shrugged off 3% rise in oil price. Current account deficit widened by 33% for the first quarter of the calendar year to $195.1 billion. Earnings from KB Homes took home buider stocks to a new high and Circuit City reported wider loss.

Markets manage to rise in the face of 3% rise in oil price and 33% wider current account deficit for the first quarter. Market focusing on consumer confidence drove retail, home builders, and consumer durable stocks higher. Mining and metals stocks also reached high for the week.

All three indexes reached higher at close and for the week Dow closed up 1.05%, S&P closed up 1.57% and Nasdaq closed up 1.31%.

Consumer sentiment read released from University of Michigan for the early June was at 94.8 vs. 88.8 estimates.

After the close Jury in Manhattan state Supreme Court found former CEO Dennis Kozlowski and CFO Mark Swartz of Tyco guilty of looting $600 million, grand larceny, falsifying records, and securities fraud and other charges totaling 22 charges. The jury deliberated for eleven days before returning the verdict.

CURRENT ACCOUNT DEFICIT

The U.S. current-account deficit--the combined balances on trade in goods and services, income, and net unilateral current transfers--increased to $195.1 billion in the first quarter of 2005 (preliminary) from $188.4 billion (revised) in the fourth quarter of 2004. The increase was more than accounted for by increases in the deficit on goods and in net outflows for unilateral current transfers. These increases were partly offset by increases in the surplus on services and in the surplus on income.

Net foreign purchases of U.S. securities other than U.S. Treasury securities were $88.2 billion in the first quarter, down from $158.2 billion in the fourth. Net foreign purchases of U.S. stocks were $28.9 billion, down from $45.7 billion. Net foreign purchases of U.S. corporate bonds were $58.6 billion, down from $69.3 billion. Net foreign purchases of federally sponsored agency bonds were $0.8 billion, down from $43.2 billion.

Net financial inflows for foreign direct investment in the United States were $28.8 billion in the first quarter, down from $31.6 billion in the fourth. Decreases in reinvested earnings and in net equity capital inflows were largely offset by a shift to net inflows on inter-company debt from net outflows.

Foreign official assets in the United States increased $24.7 billion in the first quarter, following an increase of $94.5 billion in the fourth.


EARNINGS

KB Home, homebuilder, posted 78% higher earnings for the second quarter which translate to $2.06 per share compared with $1.20 last year. The improved results beating estimates of $1.78 a share are due to increased sales.

Adobe Systems, technology maker, reported 2Q 37% increase in profit, or 29 cents per share vs. 22 cents last year due to improved software sales. Analysts’ expectations had been 27 cents per share.

Circuit City, electronics retailer, posted 1Q loss of 7 cents a share compared with a loss of 3 cents for the previous year missing expectations of only 2 cents loss a share. Sales rose 6.4% to $2.23 billion. Same-store sales remained flat.

Nautilus agreed to buy Pearl Izumi private apparel and footwear brand for $68 million mainly in cash. The company expects acquisition would bring additional 6 to 8 cents per share to 2006 earnings. Analysts expect the earnings to be $1.18 a share for 2005 and $ 1.52 a share for 2006.

INTERNATIONAL MARKETS

Most Asian benchmarks closed higher as steel makers and oil shares continued extending gains across the region followed by metals and crude futures. In Asian trading crude reached a two-month high of $56.58 a barrel. Japanese stock indexes climbed 0.9%, Taiwan’s Taiex gained 0.2%, and South Korea’s Kospi added 0.1%. In currency markets the dollar traded at 108.93 yen.

European shares rose in mid-day trading as major oil companies gained from 10-week high crude-oil prices topping $57 a barrel. London’s FTSE 100 added 0.2%, Germany’s DAX 40 climbed 0.2%, and France’s CAC 40 was up 0.3%. The euro added 0.6% against the U.S. dollar to $1.2176.