Healthy Jobs Healthy Stocks

123jump.com Staff
30 Nov, -0001
New York City

June job report of 146k new jobs was not what economists wanted but investors found the report just right. Investors bid up tech, consumer discretionary, retail and home builders. Energy stocks suffered with fall in oil prices. Copper reached near all-time high as strike in Chile and Arizona is likely to last longer than anticipated. Copper inventories are at 30-year low.

U.S. MARKET AVERAGES

Markets early cautious ness faded away as the day progressed. The June job non-farm payroll, positive earnings news from Alcoa and falling oil prices contributed to the market rally.

Techs both hardware and software sectors traded higher as Accenture reported better than expected earnings, Merrill Lynch had positive comments on IBM and semiconductor stocks participated in the rally.


ECONOMIC NEWS

Royal Dutch Shell Group and Russian gas monopoly OAO Gazprom made a deal to swap major natural-gas-providing assets. According to the agreement the government-controlled Gazprom will purchase a stake of 25% plus 1 share in the Sakhalin-2 natural-gas project and in return Shell will receive a 50% interest in Zapolyarnoye-Neocomian gas field. The difference in value between the two assets will be settled in cash.

INTERNATIONAL MARKET NEWS

European markets ended up recovering most losses caused after the bombings in London. The stock indexes were given a strong support by the positive U.S. jobs report and the benchmark British stock index, the FTSE 100 climbed 1%, the German DAX 30 advanced 0.9%, and the French CAC 40 rose 1.4%.

Asian markets finished down after gaining in the morning session overcoming the effects of the London terrorist attack but weak Japan machinery order data killed the Japanese index rally and cast a pall across markets in the region. The Nikkei ended down 0.2%, China’s Shanghai Composite lost 2% and Hong Kong’s Hang Seng fell 0.5% dragged down by heavyweight HSB and China Mobile. The dollar was trading at 112.36, up 0.31 yen.

European markets quickly recovered after the confusion caused by the terror attacks in London on sentiment that markets were oversold as well as on Wall Street gains. London’s FTSE 100 rose 0.8% with travel stocks and British Airways among the early gainers, Germany’s DAX 30 added 0.8%, and France’s CAC 40 also climbed 0.8%. The euro and the pound were down 0.3% against the dollar.


ENERGY, METALS AND CURRENCIES MARKETS

Oil futures headed forward record highs as markets shrugged off the impact of London attacks and a hurricane neared U.S. Gulf oil facilities. U.S. crude-oil for August delivery rose $1.02 to reach $61.75 a barrel. London Brent gained 94 cents to $60.26. In the afternoon trading oil traders changed their mind. Oil traders could not decide whether to hold on to the gains or take profit on the recent rally on energy futures. In the end oil futures lost momentum of the day and turned in loss of $1.10 and closed at $59.63 per barrel. While gold fell 40 cents but silver was up 4 cents and copper traded up 2.05 cents closing at $1.556 per pound.
Major currency rates were influenced by the U.S. jobs data and the euro dropped as low as $1.1874 before climbing back to $1.1922, the British pound reached a 13-month low quoting at $1.7310, down from $1.7425 in late Thursday trading. The dollar also gained against the yen to quote at 112.22.

The U.S. dollar strengthened against other major currencies on U.S. non-farm payroll data. The greenback gained 0.4% against the euro to $1.1904, and 0.4% up against the yen to quote at 112.35. The pound fell to a 19-month low and quoted at $1.7370.

EARNINGS AND CORPORATE NEWS

LG Philips LCD which is in a heated race with Samsung Electronics, announced that it will
make an attempt at selling nearly $1.2 billion of its shares in the current quarter. This decision signifies that the company keeps a continuing appetite for funds to build factories and its belief of improved sentiment on the flat-screen sector.

Regis, hair salons operator, posted 4Q same-store sales 0.9% higher than a year ago. The company projected 1Q earnings below analysts’ expectations between 51 and 56 cents a share.

Polo Ralph Lauren ((RL)), fashion company, raised its 1Q outlook on boosted operating margin but didn’t provide earnings-per-share target. Analysts are looking for earnings of 25 cents a share.

Kyphon ((KYPH)), medical device maker, lifted its 2Q earnings outlook to the range of 16 to 18 cents per share from a previous forecast of 12 to 13 cent a share due to better-than-expected sales and lower expenses.

Pro-Dex ((PDEX)), drive system maker, forecast 4Q earnings in the range of 7 to 8 cents a share compared with 5 cents last year.

Somera Communications ((SMRA)) projected 2Q net loss of 15 to 17 cents a share on charges and acquisition expenses.

Borland Software ((BORL)) posted lower 2Q outlook as it sees wider earnings loss of 24 to 26 cents per share vs. previous forecast of a loss between 19 to 21 cents.

Alcoa (AA)), aluminum company reported 2Q net income of 52 cents per share vs. 46 cents a year ago beating expectations of 47 cents a share. The 14% rise is due to the sales of its shares in a Norwegian company and a tax benefit which offset high energy prices and restructuring costs.

Accenture ((ACN)), consulting and technology services firm, posted 3Q increase in profit to 51 cents per share up from 37 cents last year on consulting recovery and reorganization benefits.

Electroglas ((EGLS)), supplier of test handling solutions for the semiconductor industry, reported a net loss of 23 cents per share and 57 cents per share for the two and a five month transition periods respectively.

CalAmp ((CAMP)), reported 1Q increased profit of 9 cents per share vs. 7 cents for the comparable period last year. The company forecast 2Q earnings ranging from 10 to 14 cents a share.

Innovo ((INNO)), apparel company, swung to 2Q profit of a penny a share vs. a net loss of 21 cents a share a year ago boosted by strong sales.

Laidlaw ((LI)), bus company & Greyhound lines operator, posted profit decline of 29 cents per share vs. 33 cents a year earlier on high fuel prices and other expenses. The results failed to meet expectations of 36 cents per share. The company declared a 15-cent quarterly dividend.

Shaw Group] ((SGR)), industrial comprehensive services provider, reported 3Q net loss of 30 cents per share vs. net income of 11 cents last year including special items. Analysts had expected a loss of 22 cents per share before charges.

UAP Holding ((UAPH)), agricultural inputs distributor, reported 1Q 33% earnings rise of 91 cents per share on sales growth.


OTHER NEWS

The meeting of G-8 summit which was overshadowed by the terror attacks in London ended with a defiant talk and pledges to fight both poverty and climate change. The G-8 countries agreed on a $50 billion package aid for Africa, as well as on canceling the debt of 18 of the poorest countries with 14 of them African. They also approved a declaration to fight global warming as this topic will be further discussed at a meeting in November held by Britain. African nations voiced their skepticism and said that they heard this all before.

Brazilian markets closed down 0.28% on the fears that the current graft scandal is likely to widen beyond few government officials. The latest read on the inflation came in at two-year low as a government report showed that most consumer prices fell for the first time after two years. Real gained as much as 0.7% before settling 0.2% higher at 2.373 against the U.S. dollar.

The strikes at mines in Arizona and in Chile drove copper prices higher by one percent. Copper inventories according to London Metal’s Exchange survey are at 30-year low and latest read showed a drop of 1% to 29,150 metric ton.