Rising Oil Weighs on Stocks

albena
30 Nov, -0001
New York City

Stocks are expected to open flat or slightly lower Wednesday as climbing oil prices are investors' main concern. The government's weekly petroleum inventory report has been delayed for Thursday due to the 4th July holiday. The Institute for Supply Management is expected to announce its non-manufacturing index for June.

U.S. MARKET AVERAGES

S&P 500 futures lost 0.3 point, Dow Jones industrial average futures were up 5 points, while Nasdaq 100 futures advanced 1 point.

The 10-year Treasury note gained 6/32, or $1.875 per $1,000 invested, to yield 4.09%. The 30-year note advanced 10/32 to yield 4.349%. Yields move inversely to prices.

General Motors Corp. ((GM)) could advance after the news that a federal court ruled in favor of the automaker in its bid to recover as much as $253 million from the federal government for one of its underfunded pension plans.

Walgreens' Chicago-area pharmacists' union called for a work stoppage on Wednesday, as the retailer and its employees start preparing a new labor agreement.

ECONOMIC NEWS

The Institute for Supply Management is expected to announce its non-manufacturing index for June. Economists forecast a reading of 58.2 versus 58.5 in May.

INTERNATIONAL MARKETS

In Europe, the German DAX 30 added 0.5% at 4,624.74, while France's CAC 40 added 0.5% at 4,273.17, as food and beverage and technology stocks bolstered the index.

London's FTSE 100 gained 0.4% to trade at 5,208.5, helped by pharmaceutical companies, oils and airlines.

Asian-Pacific shares closed, as Tokyo dropped 0.1% on weak economic data and rising oil.

In Tokyo, exporter shares gained ground as the dollar advanced vs. the yen, but the overall market finished mixed. The Nikkei 225 Stock Average ended 0.1% down at 11603.5, while the Topix Index added 0.22 point, or 0.02%, to 1183.63.

OIL, METALS AND CURRENCIES

Crude-oil futures reached the $60-a-barrel mark early Wednesday, as the oil and gas supply outlook was threatened by the storms in the Gulf of Mexico. The August crude contract was trading 37 cents up at $59.96 a barrel.

The dollar was quoted at 111.90 yen, up from 111.59 yen late Tuesday, while the euro declined vs. the greenback to $1.1902 from $1.1917.

EARNINGS CORPORATE NEWS

Nu Horizons Electronics Corp. ((NUHC)), a distributor of active and passive electronic components, reported 1Q net income of $475,000, or 3 cents a share, down versus $1.2 million, or 7 cents a share in the comparable quarter a year earlier. Sales for the quarter ended May 31 advanced to $121.4 million vs. $118.2 million last year. Nu Horizons stock closed up 4.5% at $6.78 Wednesday.

Cutter & Buck Inc. ((CBUK)) reported 4Q net income of $2.8 million, or 25 cents a share, down versus 49 cents a share, or $5.6 million in the year ago compareable quarter. Sales for the three-month period ending April 30 dropped to $34.9 million vs. $38.4 million. The company still recorded growth in gross margin to 48% vs. 45.9% in 4Q a year earlier. Analysts expected earnings of 28 cents a share. Cutter & Buck's stock closed flat at $13.04 Tuesday.

Delta and Pine Land Co. ((DLP)) announced its 3Q net income after preferred dividends climbed to $36.2 million, or 91 cents a share compared with $31.3 million, or 79 cents a share a year earlier. Net sales and licensing fees advanced to $203.3 million against $185.6 million last year. The quarterly results include charges of 1 cent a share in 3Q compared with charges of 5 cents a share a year ago. The company also lifted its quarterly dividend by 25% to 15 cents a share and forecasted earnings between $1.02 to $1.11 a share for the full year 2005.

Schnitzer Steel Industries Inc. ((SCHN)) reported third-quarter net income of $33.5 million, or $1.08 a share, versus $42.5 million, or $1.37 a share a year ago. Analysts estimated income of $1.05 a share. Revenue advanced to $226.8 million in the quarter vs. $193.8 million last year. 4Q 2005 sales volumes are seen below the fiscal 2005 quarterly run rate, according to the company, but total fiscal 2005 sales are likely to be around last year's level. Shares of the company climbed 75 cents to $24.65 Tuesday.

Restaurant chain Ruby Tuesday is scheduled to report fourth-quarter financial results after the closing bell. The company is expected to post earnings of 41 cents per share.

CORPORATE NEWS

The 10% decline in shares of ADE Corp. ((ADEX)) to $26, resulting from the semiconductor equipment supplier's quarterly earnings report and lowered guidance, could put some pressure onto chip-related.

Shares of Maytag Corp. ((MYG)) could suffer after the news that the U.S. appliance maker may end takeover talks with a group that includes Haier due to pressure from rival bidders.

Amvescap PLC, owner of the Invesco and AIM line of mutual funds, climbed 13% in London trade on Wednesday as CI Financial showed interest in purchsing the company.

General Electric ((GE)) could decline on news that the company's commercial finance division will acquire $1 billion in aircraft assets from CIT Group.