Morgan Stanley, Oracle Lead Futures Up

Elena
20 Sep, 2006
New York City

A six-month low by crude oil futures and better-than-expected quarterly results at Oracle and Morgan Stanley helped generate positive sentiment too. Morgan Stanley, the largest U.S. investment bank, rose 2% before the opening bell after it said earnings from continuing operations and excluding items rose 59%.

[R]09:00AM Stock futures rose, helped by Oracle and Morgan Stanley earnings.[/R]
U.S. stock futures advanced Wednesday, boosted by expectations that the Federal Reserve will leave key interest rate unchanged at 5.25%. Upbeat quarterly results from Oracle and Morgan Stanley also generated positive sentiment. A six-month low by crude oil futures was another market driver to the upside, although energy companies could come under pressure. Crude fell more than 1% to $60.79 a barrel on expectations of another rise in fuel stocks.

Tech shares are expected to move higher, helped by Oracle ((ORCL)) which rose 10% in European trading after reporting Q1 profit jump by 29% and revenue increase by 30%, beating forecasts. Morgan Stanley ((MS)) rose 2% in electronic before the opening bell after it said earnings from continuing operations and excluding items rose 59%. The largest U.S. investment bank said it earned $1.85 billion, or $1.75 a share, up sharply from $144 million, or 13 cents, a year ago, beating estimates of $1.37. Morgan Stanley figures followed upbeat numbers from Goldman Sachs ((GS)) and Lehman Brothers ((LEH)) earlier this month. In other earnings news, Circuit City Stores Inc. ((CC)), the No. 2 U.S. consumer electronics chain, rose 2.7% on Wednesday after it reported higher quarterly profit, helped by strong sales of flat-panel televisions. Standard & Poor''s 500 futures were up 4.60 points, above fair value. Dow Jones industrial average futures were up 36 points and Nasdaq 100 futures were up 10.75 points.


[R]8:00AM Oracle reported 29% profit jump in Q1.[/R]
Oracle Corp. ((ORCL)) reported after market close Tuesday Q1 profit growth by 29% and revenue increase by 30%. The software giant said net income was a record $670 million, or 13 cents a share, compared with $519 million, or 10 cents a share last year. The upbeat quarterly results were largely attributable to the $20 billion acquisition spree of the company. Since the beginning of 2005, Oracle has spent more than $20 billion acquiring competitors in the business software arena. Apart from the $11.1 billion acquisition of PeopleSoft, Oracle has also bought Siebel Systems Inc. for $6.1 billion and smaller companies such as Portal Software Inc. for a total of about $2 billion.

Revenue for the three months ended Aug. 31 jumped to $3.59 billion, up nearly 30% from $2.79 billion in the year-ago period, due to lucrative contracts with Wal-Mart Stores Inc. and other retailers. Excluding acquisition expenses and other costs, the company earned $931 million, or 18 cents per share, up 26% from $738 million, or 14 cents per share, in the year-ago period. On that basis analysts expected the software company to report a profit of $853.26 million, or 16 cents per share, on revenue of $3.47 billion. New software license sales rose nearly 28 % to $804 million from $629 million last year. The stock gained $1.47 or 9.1% in after-hours trading.


[R]7:30AM The coup in Thailand presses Asian markets down.[/R]
Asian markets finished lower on Wednesday. The Nikkei 225 Average finished the day 0.98% lower at 15718.67. Shares closed at their lowest levels in six weeks as worries of a slowdown in the U.S. pulled down blue-chip export names in the technology and automobile sectors. Honda Motor lost 0.8%, electronics conglomerate Toshiba sank 2.4% and Hitachi stumbled 2.2%.

South Korea Kospi Index dropped 0.55% to 1366.44 but of all the regional indexes, though, the Manila PSE was the biggest decliner, closing 1.99% lower at 2512.76. Blue-chip Philippine Long Distance Telephone was the most actively traded stock, shedding 4.1% after the stock rose 15% during the past five sessions.

Taipei lost 0.06% to close at 6877.77, the benchmark Shanghai Composite Index ended 0.2% lower at 1732.45, and Australia S&P/ASX 200 decreased 1.15% to 4998.50. Bucking the downward trend, Hong Kong shares closed higher, recovering from a morning slip following the coup in Thailand, on expectations the U.S. Fed will leave U.S. rates steady at its meeting this week. The Hang Seng Index rose 0.96% to finish at 17512.96.


[R]6:30AM European markets trade in a tight range Wednesday on Fed meeting.[/R]
European markets were mixed by mid-morning on Wednesday. The U.K. FTSE 100 index edged down less than 0.1% at 5,830, while the German DAX Xetra 30 index advanced 0.3% at 5,887 and the French CAC-40 index increased 0.2% at 5,124. Inditex fell 0.8% amid concerns about pressures on margins in the Spanish fashion retailer first-half results.

Other decliners included EADS falling 0.7%, following a report in Les Echoes that further delays in delivery of the A380 superjumbo were likely due to assembly problems. Euronex lost 0.8% and Deutsche Boerse slipped 0.4%. Aeroports de Paris lost 3.5% after it said its first-half net profit fell 49.2%.

SAP shares gained 1.8% in early Frankfurt trading after rival Oracle Corp. quarterly profit climbed 29% and as SAP predicted revenue growth for the period that was stronger than the current analyst expectation. Business Objects rose 1% and Cap Gemini increased 1.1%.

Oil slumped to its lowest since March, trading at $60.88 a barrel, after U.S. President George W. Bush supported a diplomatic effort to end a dispute over Iran nuclear program. Prices have fallen 21% the past two months. Gold was trading at $574.80 an ounce Wednesday, down $8.80 an ounce from Tuesday close of $583.60.

The euro fell slightly against the U.S. dollar on Wednesday ahead of a decision by the U.S. Federal Reserve Bank on whether to raise interest rates. In morning trading, the euro fell slightly to $1.2671, down from $1.2677 late Tuesday in New York. The British pound was unchanged at $1.8816 from the day before. The dollar slipped to 117.08 yen from 117.57 yen on Tuesday.