Cautious Trading

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

Traders approached morning opening with mixed reaction to the May durable orders. Excluding the volatile transportation sectors the oders for May fell 0.2% and Capital goods orders were below estimates. Oil continued to rally in Mew York as the prices remained high in the Asian and European trading. Gold and silver are on the rise.

MARKET AVERAGES

Stocks opened on a cautious note as investors read the details of new orders for durable goods. The mixed report highlighted the weakness in the capital good orders and in the transportation equipment. Shares in steel and tech traded lower as oil stocks continued their rally on the heels of higher oil price in Asia and in the opening trading hours in New York.


ECONOMIC NEWS

New orders for manufactured durable goods in May increased $11.0 billion or 5.5 percent to $210.7 billion, the U.S. Census Bureau announced today. This followed a 1.4 percent April increase. Excluding transportation, new orders decreased 0.2 percent.

Excluding defense, new orders increased 5.3 percent. Transportation equipment, up for the second consecutive month, had the largest increase, $11.3 billion or 21.2 percent to $64.7 billion. This was led by non-defense aircraft and parts, which increased $11.6 billion.

The government also revised April data. Revised seasonally adjusted April figures for all manufacturing industries are: new orders, $382.7 billion (revised from $383.6 billion); shipments, $390.7 billion (revised from $390.9 billion); unfilled orders, $553.2 billion (revised from $554.0 billion); and total inventories, $484.9 billion (revised from $485.2 billion).


OIL AND METALS MARKETS


Crude-oil prices reached $60 a barrel on speculative buying and fears of short supply due to refinery glitches.


EARNINGS AND CORPORATE NEWS

Micron Technology, semiconductor maker, reported 3Q loss of 20 cents per share compared with a profit of 13 cents last year reflecting decline in prices of memory chips and stiffer competition. Analysts had expected a profit of 2 cents a share.

Rite Aid, drugstore chain, posted lower 1Q and full-year earnings of 5 cents per share vs. 10 cents a year ago on lower sales and higher store-closing costs. Same-store sales fell 0.3%.

Tibco Software, business applications maker, posted 2Q earnings of 10 cents per share compared with 5 cents per share last year on higher revenue and one-time tax benefit.

Cognos, business management software maker, posted 1Q net earnings of 25 cents a share vs. 22 cents a share a year ago beating expectations of 22 cents per share. The company predicted 2Q profit ranging from 28 cents to 31 cents per share.

AG Edwards, financial services holding firm, reported 1Q income rise of 71 cents per share compared with 57 cents for the prior-year same period. The favorable results are due to one-time gain and 14% rise in asset-management.

IBM is reported to hire 14,000 people in India as it gears up to compete in the global market place against Indian software service providers.

Citigroup and Legg Mason have agreed to swap its asset management business with the broker-dealer network of Legg Mason for $3.7 billion. The agreement excludes the Citigroup’s Mexican asset management business. Separately Legg Mason also acquired 80% in fund of hedge-funds company for at least $960 million.

INTERNATIONAL MARKETS

Most Asian benchmarks traded in the negative territory after a considerable drop of U.S. stocks as a spike in crude-oil futures raised concerns about corporate profits. The Nikkei lost 0.3%, South Korea’s Kospi declined 0.8%, and Taiwan’s Taiex fell 0.5%. The dollar was trading at 108.93 yen.

European markets slipped at mid-day trading as the U.S. stocks fell overnight hurt by rising crude-oil prices. Oil-sensitive airlines and carmakers were lower and further pressed by the euro which gained 0.5% to $1.2083. Averages in Germany retreated 1.1%, in France 1%, and in the U.K. slid 0.6%.