Range Bound Trading

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

Energy Department reported that crude invenotry is in an upper range of average and has more than a billion barrels for the second week in a row. Oil, though volatile, dropped 95 cents as expected strike in Norway never materialized. Ameritrade agreed to buy TD Waterhouse brokerage unit for $2.9 billion. Ameritrade up 20% and Arbinet-The Exchange dropeed 35% on lower earnings. Fed Chairman and Treasury Secretary will testify to Senate Finace committee tomorrow on China.

MARKET AVERAGES

At the close three averages managed to remain close to unchanged but they had come off from the day’s high on the back of oil inventory data released by the U.S. Department of Energy.

In Norway off-shore oil platform strike was averted after a successful negotiations between the labor union and management. Last thirteen calls of strike have been resolved without a strike in Norway.

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 reported 2Q earnings declined by 24%.

Ameritrade has agreed to buy TD Waterhouse brokerage unit for $2.9 billion. The stock jumped 20% at the close.

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.

Shares of Arbinet-The Exchange dropped by 35% as company revised its earnings forecast downwards and withdrew its earnings per share guidance. Market was looking for 66 cents for the year.

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.

Brazilian Real rose beyond three-year high to R2.37 to a dollar amidst strong fund flows as investors chase interest rate of 19% on Brazilian government bonds. The stock market fell 1.3% at mid-day trading.

Mexican stocks fell close to one percent as investors sold stocks of cellular carrier American Movil and world’s third largest cement maker Cemex. Investors are awaiting inflation data on Thursday.



DEPARTMENT OF ENERGY WEEKLY PETROLEUM REPORT SUMMARY


Summary of Weekly Petroleum Data for the Week Ending June 17, 2005

U.S. crude oil refinery inputs averaged 16.0 million barrels per day during the week ending June 17, down 386,000 barrels per day from the previous week's average. Refineries operated at 94.8 percent of their operable capacity last week. With lower refinery inputs, both gasoline and distillate production reported declines last week, averaging 8.7 million barrels per day and 4.2 million barrels per day, respectively.

U.S. crude oil imports averaged about 10.2 million barrels per day last week, down 440,000 barrels per day from the previous week. Over the last four weeks, crude oil imports have averaged about 10.4 million barrels per day, which is unchanged over the comparable four weeks last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged over 1.1 million barrels per day, while distillate fuel imports averaged 142,000 barrels per day.

U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) fell by 1.6 million barrels from the previous week. At 327.4 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 increased by 0.2 million barrels last week, putting them in the upper half of the average range. Distillate fuel inventories rose by 1.3 million barrels last week, but remain in the lower half of the average range for this time of year. High-sulfur distillate fuel (heating oil) inventories posted a 1.8 million barrel gain last week, while low-sulfur distillate fuel (diesel fuel) inventories reported a 0.3 million barrel decline. Total commercial petroleum inventories increased by 2.9 million barrels last week, placing them above 1 billion barrels for the second consecutive week.

Total product supplied over the last four-week period has averaged 20.6 million barrels per day, or 1.7 percent more than averaged over the same period last year. Over the last four weeks, motor gasoline demand has averaged 9.4 million barrels per day, or 2.5 percent above the same period last year, while distillate fuel demand has averaged 4.1 million barrels per day, or 6.9 percent above the same period last year. Kerosene-type jet fuel demand is up 3.4 percent over the last four weeks compared to the same four-week period last year.