ConAgra Profit Falls, Beats Estimate

Elena
21 Sep, 2006
New York City

U.S. stock futures indicated a higher market opening, lifted by strong earnings, lower oil prices and unchanged key interest rates. ConAgra Foods posted higher-than-expected earnings, despite a profit drop because of higher energy and ingredients expenses. Transportation company FedEx reported strong revenue and earnings growth. Shares in the company rose 0.4% before the bell.

[R]09:00AM Stock futures pointed to a positive start.[/R]
U.S. stock futures indicated a higher market opening, lifted by strong earnings, lower oil prices and unchanged key interest rates. On Wednesday market rallied as the Fed Reserve decided to leave its benchmark fed funds rate at 5.25%. Among companies in the spotlight, ConAgra Foods ((CAG)) reported higher-than-expected earnings, despite a profit drop in the quarter because of higher costs related to energy and ingredients. In addition, the company raised its full-year forecast. Transportation company FedEx Corp. ((FDX)) reported strong revenue and earnings growth. Shares in the company rose 0.4% before the bell. Standard & Poor's 500 futures were up 2.90 points, above fair value. Dow Jones industrial average futures were up 18 points and Nasdaq 100 futures were up 8 points.

[R]Initial jobless claims advanced by 7,000.[/R]
Thursday morning, the Department of Labor released its report on initial jobless claims in the week ended September 16, showing that jobless claims increased more than economists had been expecting. The report showed that jobless claims rose to 318,000 from the previous week's revised figure of 311,000. Economists had expected jobless claims to edged up to 310,000 compared to the 308,000 originally reported for the previous week. The Department of Labor also said that the less volatile four-week moving average came in at 315,000, unchanged from the previous week's revised average of 315,000. The moving average fell in the two previous weeks. Additionally, the report showed that continuing claims in the week ended September 9 fell to 2.461 million from the preceding week's revised level of 2.490 million.


[R]8:00AM Cerman drug maker Merck agreed to Buy Serono for $13.3 billion.[/R]
Merck KGaA, German drug maker, announced Thursday it will acquire Europe''s largest biotechnology company, Serono, for $13.3 billion. Merck said it agreed to buy the Bertarelli family''s 64.5% stake in Serono for 1,100 Swiss francs ($879) a share and will launch a public offer for the outstanding shares at the same price. The offer is at a 20% premium to Wednesday''s closing price of 915 Swiss francs a share. Merck is planning to combine its Pharma Ethicals division with Serono to create Merck-Serono Biopharmaceuticals. Serono''s biggest product is its Rebif treatment for multiple sclerosis, accounting for 49% of its sales in 2005.

Merck''s bid comes after a failed attempt to buy fellow German drugmaker Schering AG earlier this year. Rival Bayer won the battle for taking control over Schering. But, as part of the deal, Bayer paid Merck $4.6 billion for its stake in Schering. Shares in German drugmaker Merck dropped 5.3% in morning European trading, while Serono shares advanced 18%.


[R]7:30AM Asian markets record modest gains on Thursday on exporters stocks.[/R]
Asian markets were mostly higher on Thursday. Japan''s Nikkei 225 Average strengthened in the afternoon to finish the day up 0.7% to 15834.2. Auto makers were among the largest gainers, with Toyota rising 1.8% and Honda and Nissan both gaining 1%. Tire maker Bridgestone was up 3.3% as worries subsided that the coup in Thailand would threaten rubber supplies. Hitachi was down 1.2%, extending its losses this week, while Japanese banks recovered in the afternoon from steep morning losses. Mitsubishi UFJ Financial Group, ended up 0.7%.

In Hong Kong, the Hang Seng Index rose 0.6% to end at a six-year-high of 17619.97. China Mobile led the advancers, extending gains after reporting a rise in subscribers Wednesday. The cellular-service provider finished up 2.6%. In South Korea, the Kospi Index ended flat as early-session gains were undone by a fall in dollar''s value against the won and some profit taking. Korea Electric Power rose 1.1% and Korea Gas gained 3.8%, as the companies would be able to import raw materials at cheaper prices due to the stronger Korean won.

Australia S&P/ASX 200 shed 0.1%. Retail company Coles Myer advanced 2.9% after reporting that full-year net income rose 82% and raising its estimates. China Shanghai Composite index gained 0.5% as banking shares benefited from a strengthening yuan. The currency hit its highest level against the dollar Thursday since being revalued last July. Thailand SET index was down 1.42% to close at 692.57. The Thai baht strengthened slightly to 37.6 to the dollar.


[R]6:30AM European shares advance on merger deals.[/R]
European marketswere higher by mid-morning on Thursday. The FTSE 100 was up 18.10 points, or 0.31% at 5,873.6, while the German Xetra Dax added 10.2 points, or 0.2 per cent, to 5,964.63 and the French CAC 40 gained 10.4 points, or 0.2 per cent, to 5,203.18. Merck has agreed to obtain a majority stake in Serono, creating a new European pharmaceutical giant. Merck fell 6% while Serono shares were suspended at a fixed price.

Metrovacesa rose 7% to a record high as hopes of a bidding war for control of the Spanish largest property group squeezed the share price higher. Cresa, the Spanish property company controlled by the Sanahuja family, has gained acceptances representing 145 of Metrovacesa’s shares after it launched a €78.1 per share bid for a 20% stake. In other news, EADS fell 1.85 after the aerospace company confirmed there will be new delays to deliveries of its A380 superjumbo.

Oil prices edged higher on Thursday after hitting six-month lows the previous session. U.S. light crude was trading 20 cents higher at $60.67 a barrel, while London Brent crude was up 26 cents at $61 by 0943 GMT. Gold opened Thursday at a bid price of $584.90 a troy ounce, up from $578.60 late Wednesday.

The euro rose against the dollar on Thursday after the U.S. Federal Reserve kept interest rates unchanged a day earlier. In morning trading, the euro rose to $1.2725, up from $1.2691 late Wednesday in New York. The British pound rose to $1.8942 from $1.8881 late Wednesday after the minutes of the Bank of England last Monetary Policy Committee meeting helped cement market expectations of an interest rate hike in November. The dollar slipped to 117.11 yen from 117.46 yen.