Narrow Opening Rally

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

The morning rally remained very narrow in the first hour of the opening and failed to broaden beyond tech, internet and select healthcare stocks. The Energy Department weekly petroleum report cited that Total commercial petroleum inventories increased by 2.9 million barrels last week, placing them above 1 billion barrels for the second consecutive week.Oil price in the morning remains lackluster.

MARKET AVERAGES

In the early hours market rallied in few sectors as traders wait for the oil report from the Energy Department. In the bond markets the 10-year bond climbed as yield fell to 3.98%. Ford guided the lower earnings for the year 2005 and planned to reduce 5% of its salaried staff. Morgan Stanley reprted 2Q earnings declined by 24%.

CORPORATE AND EARNINGS NEWS

Ford Motor cut its full-year earnings outlook for the second time blaming sales decrease among its core sport-utility vehicles and climbing gasoline prices and said they would be followed by deeper job and cost cuts. The company sees the 2005 earnings in $1 and $1.25 range.

GTech Holdings, lottery systems operator, reported 1Q higher profit of 43 cents a share vs. 40 cents a year ago beating estimates of 40 cents a share. The results are owing to acquisitions and improved sales. The company projects 2Q earnings in the range of 37 to 40 cents.

Lindsay Manufacturing, irrigation systems maker, announced 3Q net profit of 34 cents per share vs. 36 cents last year. The company’s backlog at May 31 was $11.1 million compared with $20.2 million the prior-year same period.

Morgan Stanley posted 2Q profit declined to 86 cents per share compared with $1.10 per share last year. Net earnings dropped 22% and include legal expenses worth $140 million.

Worthington Industries, metal processing company, reported 4Q earnings rise of 46 cents a share vs. 45 cents a year ago missing analysts’ expectations of 51 cents.

Hennes & Mauritz, fashion retailer, posted higher 2Q profit of 2.35 billion kronor up from 1.76 billion on growing sales.

According to newspaper report, Warren Buffett, a billionaire investor, announced Berkshire Hathaway is willing to invest more than the $10 billion to $15 billion in the U.S. energy sector as he sees growing opportunities in the utility industry.

The European Commission said it had reached an antitrust agreement with Coca-Cola concerning changes in business practices of the company. The giant soft-drinks company escaped a fine but is bound with the agreement until 2010 and on breaking its terms must pay the equivalent of 10% of world-wide revenue.

OIL AND METALS MARKETS

Crude-oil prices dropped 11 cents to $58.93 a barrel early Wednesday ahead of U.S. inventory data. Analysts expect further decline in crude stocks which are 50% higher than the previous year, They also predict increase in petroleum-products shares.

INTERNATIONAL MARKETS

Most Asian markets closed higher although investors remained cautious with crude-oil prices still moving near recent tops. It traded at $58.9 a barrel. Stocks in Japan advanced on construction and real-estate sectors despite unfavorable trade data. In South Korea averages climbed 1.2%, and in Taiwan were up 1.3%. The dollar was trading at 108.50 yen in early Tokyo trade.

At mid-day dealings European stocks made gains on weaker euro traded at $1.2110 and crude-oil prices below $60 a barrel before U.S. inventory data release. Germany’s DAX 30 advanced 0.4%, Frances CAC 40 was up 0.3%, London’s FTSE 100 climbed 0.5%.

South Korean Steel Company POSCO has agreed with Orissa State of India to invest up to $12 billion in steel plant and iron ore mining project. India uses 30 kilogram of steel whereas China uses $180 kilogram of steel per person. This will be the largest ever direct investment in India.