Techs Push Nasdaq 1% Higher

Elena
20 Sep, 2006
New York City

The three major averages opened higher, rebounding from losses yesterday. The Nasdaq showed a particularly strong upward move, lifted by the software sector with Oracle rising 11.5% after reporting better-than-expected Q1 earnings growth. The brokerage sector also gained, with Morgan Stanley helping to lead the sector higher, posting an advance of 1.2%.

[R]9:45AM Stocks opened in the positive, led by tech stocks.[/R]
Stock markets moved notably higher at the start of trading on Wednesday, with the three major averages rebounding from losses yesterday. The Nasdaq showed a particularly strong upward move, lifted by the software sector with Oracle ((ORCL)) rising 11.5% after reporting better-than-expected Q1 earnings growth.

The brokerage sector also showed significant strength, with Morgan Stanley ((MS)) helping to lead the sector higher after reporting Q3 earnings above estimates. Shares of the investment bank advanced 1.2%. Drug stocks were among early advancers as shares of Vertex Pharmaceuticals ((VRTX)) jumped 3% after UBS upgraded the biotech stock to buy. A notable crude oil futures drop helped airline shares made early gains Wednesday. Gainers were led by regional carrier ExpressJet Holdings Inc ((XJT)) as well as by Continental Airlines Inc. ((CAL)) and Alaska Air Group Inc ((ALK)). U.S.-listed shares of Air France-KLM ((AKH)) rose 2%. In the opening minutes, the Dow Jones industrial average gained 36.18, or 0.31%. The Standard & Poor''s 500 index rose 5.43, or 0.41%, and the Nasdaq composite index rose 23.35, or 1.05%. Bonds rose, with the yield on the 10-year Treasury note at 4.71%, down from 4.73% Tuesday.


[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.