TI and Halliburton Gain On Repurchase

Elena
22 Sep, 2006
New York City

Concerns that slowing economic growth would hurt corporate profits kept stocks in the negative territory Friday morning. Texas Instruments rose 1.8% after its board approved a plan to buyback an additional $5 billion of its stock. Halliburton Co. gained nearly 1% after the company boosted its share-repurchase program by $2 billion.

[R]11:30AM The Nasdaq moved steeply down on weak tech stocks.[/R]
Concerns that slowing economic growth would hurt corporate profits kept stocks in the negative territory Friday morning. The Nasdaq posted a steep decline reflecting significant weakness among technology stocks, with networking and disk drive stocks moving notably lower. Weakness in the biotech sector also contributed to the weakness of the tech-heavy index. Energy stocks turned lower reversing from earlier gains, as the price of oil pulled back. Meanwhile, the gold sector continued to buck the downtrend by the broader market.

Shares of Dow component General Motors ((GM)) fell nearly 2% on reports that an alliance with Renault and Nissan Motor seemed less likely after three months of negotiations. Among gaining stocks, Texas Instruments ((TXN)) rose 1.8% after its board approved a plan to buyback an additional $5 billion of its stock. Halliburton Co. ((HAL)) gained nearly 1% after the company boosted its share-repurchase program by $2 billion. In late morning trading, the Dow was down 32.82, or 0.28%.The Standard & Poor's 500 index was down 5.28, or 0.40% and the Nasdaq composite index fell 21.13, or 0.94%. Bonds jumped sharply, with the yield on the benchmark 10-year Treasury note falling to 4.60% from 4.64% late Thursday.


[R]10:30AM The Sensex declines Friday on profit-taking, Reliance jumps.[/R]
The Sensex on BSE finished 37.49 points lower, or 0.31%, at 12,236.78. The market-breadth was weak and narrow and small and mid caps did not take part in the rally of the past two sessions. For 1,596 shares that declined, 910 advanced and 63 stocks remained unchanged. From the Sensex stocks 20 declined while the rest advanced. The turnover on BSE was Rs 3,121 crore, lower than Thursday’s Rs 3,454 crore. The turnover on NSE was Rs 6,435.98 crore.

Most active stocks

Index heavy Reliance Industries was the most-active stock on BSE, with a turnover of Rs 226.64 crore followed by Indiabulls (Rs 138.50 crore) and Voltamp Transformers (Rs 107.88 crore).

In focus

Reliance Industries spurted 1.54%, to Rs 1,155.80, on a volume of 19.72 lakh shares on reports that it had paid Rs 425 crore as advanced tax, in the second installment this year, compared to Rs 225 crore last year.

Advancers

Grasim Industries led the advancers, rising 1.90% to Rs 2,518, Reliance Communications was up 1.59% to Rs 349 and Gujarat Ambuja Cements gained 1.38% to Rs 117.55. Bharti Airtel moved up 1.17% to Rs 471 after it secured a licence for GSM-based wireless services in Channel Islands, in Europe. A block deal of 22.3 lakh shares was traded on BSE.

Jet Airways gained 1.72%, to Rs 652, as the Bombay High Court ordered the release of Rs 1,500 crore deposited by Jet Airways in an escrow account, for acquiring Air Sahara. Paper maker Rama Newsprint and Papers jumped 20% for the third straight day, to Rs 16, after the stock was re-listed on BSE.

Decliners

Software exporters experienced profit-taking throughout the day. Satyam Computer led the decliners, down 2.65%, to Rs 836.90 on a volume of 7.89 lakh shares. Infosys lost 0.48% to Rs 1,826, Wipro declined 0.80% to Rs 519 and TCS moved lower 1.30% to Rs 1,039. Power equipment manufacturer BHEL sagged 0.10%, to Rs 2,311.50, in spite of reports that it may acquire an IT company, to enhance capacity and technological expertise.

Consumer products companies were under selling pressure. Hindustan Lever was down 0.62% to Rs 257, ITC lost 1.70% to Rs 187.40, Nestle sank 1.1% to Rs 1,024, Dabur India shed 1.80% to Rs 136.80, Colgate dipped 1.20% to Rs 369 and Britannia slipped 1.86% to Rs 1,100.

JB Chemicals & Pharmaceuticals lost 2.10% to Rs 97.85 and apparel maker Raymond’s slipped 2.10%, to Rs 436. Tata Motors sank 1.76% to Rs 833.30, after it announced that a fire at its paint shop in Pune may disrupt production for about a week.

Other News

The High Court in the communist-ruled southern Indian state of Kerala overturned a ban Friday on the production and sale of Coca-Cola and Pepsi in the state. The bans were put in place after a New Delhi-based private research group alleged the soft drinks had high levels of pesticides.

Pharmaceutical company, Matrix Laboratories Ltd today announced it signed a licensing agreement with Gilead to manufacture and sale a generic version of Tenofovir Disoproxil Fumarate, an anti AIDS therapy. Tenofovir is a therapy for second-line treatment of HIV/AIDS and was recently endorsed by WHO for first-line treatment as well, Matrix informed the Bombay Stock Exchange.

Chairman of Life Insurance Corporation, T S Vijayan, said that the largest insurance company has decided to raise its solvency capital ratio from 130% to 150% by the year 2009. The increase of Rs 7,000 crore will raise the insurance company capital to Rs 37,000 crore.

The Board of Approval for Special Economic Zones approved 14 zones today raising the total to 164. The Board also released a detailed guidelines for single and muli-purpose zones. The promoters of single purpose zones will require a net worth of Rs 50 crore and that for multi-purpose zones will require Rs 250 crore. The zones of 1,000 hectares will be allowed to build airports, railroad head and sea port. The Board also approved 2,000 hectare zone to be developed by Maharashtra Airport Authority at Nagpur and Textile zone to be set up by Welspun.


[R]9:45AM Stocks opened down on economic pessimism.[/R]
Stocks opened weak Friday, dragged by growing pessimism about economic growth amid warning from KB Home that housing market is slowing down. KB Home ((KBH)) fell 1% to $42.54 after warning about unfavorable conditions in the housing market which added to concerns about weakening economic growth. Fallout of a congressional probe into Hewlett-Packard also weighed. Shares of Dow industrials component Hewlett-Packard ((HPQ)) dropped 1.3%. Boston Scientific ((BSX)) fell 10.4% after the medical devices maker warned that revenue is likely to miss analyst expectations. Among gaining stocks, Nike Inc. ((NKE)) shares rose 3.8% after the apparel giant reported earnings that fell less than expected.

In early trading, significant weakness emerged in the networking sector, with 3Com ((COMS)) helping to lead the sector lower after reporting a wider than expected Q1 loss. Airline stocks also showed weakness, contributed by an increase by the price of oil. Crude for November delivery gained 46 cents to $62.05 a barrel. Gold stocks bucked the downtrend boosted a notable increase by the price of gold. In the first hour of trading, the Dow was down 12.97, or 0.11%. The Standard & Poor''s 500 index was down 1.64, or 0.12% and the Nasdaq composite index fell 6.51, or 0.29%. Bonds rose, with the yield on the benchmark 10-year Treasury note falling to 4.62% from 4.64% late Thursday.


[R]09:00AM Stock futures pointed to a lower start on signs of weakening housing market.[/R]
Stock futures looked poised to a lower opening for a second straight session after KB Home warned of unfavorable conditions in the housing market, adding to worries about economic growth from the previous session when an unexpected negative reading of a Philadelphia-area manufacturing survey hit U.S. stock markets.

Shares of KB Home ((KBH)), the fifth largest U.S. home builder, fell 4.1% in Europe after it said conditions in once strong home-building market weakened in recent months and seemed unlikely to improve in the near future. Among companies in focus, Hewlett-Packard ((HPQ)) lost 2% in European trading on continued fallout from its leak investigation. The computer giant also revealed news that the SEC asked for records and information related to the resignation of board member Tom Perkins. Boston Scientific ((BSX)) slid 10% in German trading after warning that Q3 revenue is likely to miss analyst expectations, citing a contraction in the cardiac rhythm management market and the drug-eluding stent market. Standard & Poor''s 500 futures were down 2.3 points, but above fair value. Dow Jones industrial average futures were down 12 points, and Nasdaq 100 futures were down 2 points.


[R]8:00AM Boston Scientific to miss Q3 revenue forecast.[/R]
Boston Scientific Corp. ((BSX)) released its Q3 earnings and revenue forecast. The company said Q3 net earnings are expected to come in the range of a penny and 5 cents a share. Excluding charges related to its acquisition of Guidant, net profit is seen between $90 million and $145 million, or 6 cents and 10 cents a share. On an adjusted basis, Boston Scientific forecast earnings of $230 million to $290 million, or 15 cents to 19 cents a share. Analysts are expecting Q3 per-share earnings of 16 cents a share, on average.

The medical device maker projected Q2 revenue below analyst expectations, citing a contraction in the cardiac rhythm management market and a slowdown in the drug-eluting stent market. Stents are small metal devices that are inserted into clogged arteries in order to keep them open. Boston Scientific forecast worldwide sales of its Taxus paclitaxel-eluting coronary stent systems will range between $550 million and $580 million in third quarter. The company said Q3 net sales were seen between $1.97 billion and $2.035 billion vs. an average forecast of $2.175 billion. In after-hours trading shares of the company fell 4%. On Friday Prudential cut Boston Scientific target to $14 from $21.


[R]7:30AM Asian markets fall tracking U.S. decline on weak economic data.[/R]
Asian markets were lower on Friday. The Nikkei 225 Average in Japan finished the day 1.26% lower at 15634.67. Stocks dropped to a six-week low as declines in U.S. markets and a stronger yen led to selling in exporter issues such as Canon, Bridgestone and Toyota. Canon shed 2.8%, Bridgestone lost 1.1% and Toyota sank 1.1%. Toshiba ended 2% lower and Honda slipped 1%. Sony finished 1.9% lower, suffering only limited impact from news that its videogame subsidiary will reduce the planned retail price for the next-generation PlayStation 3 console by 20%.

The Hang Seng Index in Hong Kong lost 0.11% to 17600.65. Shares ended lower after reaching a six-year high Thursday, with drops led by fashion retailer Esprit, which shed 2.9%. The Shanghai Composite Index ended 0.9% lower at 1725.36. China Minsheng Banking dropped 3.7% and Shanghai Pudong Development Bank slid 2.3%.

The Kospi Index in South Korea declined 1.35% to close at 1348.38. The market finished lower on worries over the U.S. economic slowdown and profit-taking, especially in transportation shares. Korean Air dropped 3.5% and Hyundai Merchant Marine shed 4.2% on profit-taking following recent gains spurred by lower oil prices.

Taiwan dropped 0.06% to 6885.60. Taiwan Semiconductor Manufacturing fell 1.3% and United Microelectronics declined 0.5%. Australia S&P/ASX 200 dropped 0.25% to finish at 4983.20. Weak bank shares pulled the Australian stock market lower for the fourth consecutive day. ANZ retreated 1.1% and Westpac fell 0.9%. But miners made ground after reaching multi-month lows this week, as BHP added 1% and Rio Tinto rose 2.9%.


[R]6:30AM European markets fall sharply on Philadelphia Fed data.[/R]
European markets declined on Friday. The FTSE 100 dropped 1% to 5,835.5, the Xetra Dax in Frankfurt fell 1.1% to 5,898.07 and the CAC-40 fell 1% to 5,154.11.

Corporate News

KPN agreed to sell its entire remaining 8% stake in the telecoms group. The government will sell about 87 million ordinary shares through an accelerated bookbuilding and a further 80 million ordinary shares will be repurchased by KPN, which will then cancel them. KPN fell 1.8%.

Advancers
Altana, the German pharmaceuticals and chemicals group rose 1.4%. On Thursday, Altana said it would sell its drugs business to Nycomed. Euronext, the operator of the Paris, Brussels, Amsterdam and Lisbon bourses added 1.7%. Metrovacesa added 4.3% after the two largest shareholders battling for control of largest property group in Spain failed to achieve a decisive position.

Decliners

Commerzbank fell 2.5% after Dresdner Kleinwort lowered its price target and Renault shares were down 0.8% in Paris after reports emerged overnight that talks between the French company and General Motors Corp. evaluating a possible alliance have stalled. Oil futures added 32 cents to stand at $61.91 a barrel, putting some pressure on airlines such as British Airways, trading down 1.3%., and auto stocks such as Volkswagen moving down 1.2%.

Oil and Gold

Oil prices advanced on Friday, bouncing back from a midweek drop sparked by figures showing a surge in U.S. distillate supplies. Light, sweet crude oil for November delivery gained 32 cents to $61.91 a barrel in electronic trading on the NYME. The gold bullion opened Friday at a bid price of $586.45 a troy ounce, up from $579.20 late Thursday.

Currencies

The euro rose against the U.S. dollar on Friday as traders favored the common currency after weak economic reports in the United States. In morning trading, the euro rose to $1.2818, up from $1.2766 late Thursday in New York. The British pound advanced to $1.9053 from $1.8990 late Thursday and the dollar slipped to 116.36 Japanese yen from 116.61 yen.