Hovnanian Income and Orders Drop

Elena
07 Sep, 2006
New York City

U.S. stock market futures pointed to a negative opening on concerns over global inflation and signs of slowing housing market. Home builder KB Home fell 5.5% in electronic trading after it cut its forecast on Wednesday. Hovnanian Enterprises rose 2.1% in after market trading, despite reporting fiscal Q3 net income drop by 36% and orders decline by 26%.

[R]8:30AM Stock futures pointed to a lower opening.[/R]
U.S. stock market futures declined Thursday pointing to a negative opening on growing concerns over global inflation due to the impact of higher oil prices and labor costs increases. Signs of slowing housing market also weighed on the sentiment. Home builder KB Home ((KBH)) fell 5.5% in electronic trading after it cut its forecast on Wednesday. Rival Hovnanian Enterprises Inc. ((HOV)) rose 2.1% in after market trading, despite news of a second straight quarter of declining earnings and orders. Hovnanian reported fiscal Q3 net income drop by 36%, while orders declined 26%.

Graphics chip maker ATI Technologies Inc ((ATYT)) fell 1.4%, dragging the Nasdaq futures after it warned that Q4 revenue would miss the revenue outlook. Following the news, shares of Advanced Micro Devices Inc. ((AMD)) moved lower 3.6%, even though the companies said they had satisfied U.S., Canadian and German antitrust conditions related to the acquisition. A report released by Merck & Co.'s ((MRK)) board said on Wednesday the drug maker's top executives did not consciously put patients at risk in developing and marketing Vioxx, the arthritis drug withdrawn after a study showed it increased heart risks. In economic data, initial jobless claims and wholesale inventories for July are due out later in the session. S&P 500 futures were down 4.10 points, below fair value. Dow Jones industrial average futures fell 30 points, and Nasdaq 100 futures dropped 3.75 points.


[R]7:30AM Asian falls on Japan techs and HK property shares declines.[/R]
Asian markets ended lower on Thursday. The Nikkei 225 Average in Tokyo fell 1.67% to 16,012.41. Electronics conglomerate NEC Corp. was down 2.91% and Hitachi Ltd declined 2.68%. Sony decreased 1.58%. Carmakers also fell on concerns a rise in U.S. interest rates could crimp sales. Honda Motor led the decliners in the Japanese auto sector, falling 2.75%.

In Hong Kong, the Hang Seng Index closed down 0.94% to 17,096.44. The Hang Seng China Enterprises Index of Hong Kong-listed mainland shares fell 0.46%. Property stocks such as New World Development and Hang Lung Properties ;ed the decliners, dropping respectively 1.16% and 2.18%. South Korea Kospi Index fell 0.43%, with LG Electronics dropping 1.6%. The central bank of the country said Thursday morning it was keeping the benchmark overnight call rate target steady at 4.5%.

Australia S&P/ASX 200 lost 0.1%. Retailer Coles Myer fell 0.44% after saying Wednesday it had rejected a takeover bid from a leveraged buyout consortium. China Shanghai Composite Index fell 0.7% following three straight sessions of gains.


[R]7:15AM Europe slips on inflation fears and Tomkins issue.[/R]
European markets were lower by mid-day on Thursday. London’s FTSE 100 slipped 1% to 5,871.3, while Frankfurt’s Xetra Dax shed 0.5% to 5,781.56 and the CAC 40 in Paris lost 0.8% to 5,074.76. Tomkins, British engineering company, issued a profit warning about the state of the U.S. residential and automotive equipment markets only a month after its first-half results. The company plunged 13%.

Construction products supplier Wolseley lost 2.5% and Lafarge dropped 1.7%. Michelin declined 1.3%, while DaimlerChrysler fell 0.8%. A few companies advanced on strong earnings reports. Ahold rose 4% after the supermarket operator surpassed expectations with a 70% profit in its second quarter profit. Carrefour gained 1.2% after the retailer and the operator of supermarkets in France, Italy and Spain reported an 11% profit climb. InBev rose 2.5% after the brewer of Brahma and Stella Artois reported a 12% rise in its second-quarter profit.