Stocks Seen Up on Falling Oil and Mergers

albena
30 Nov, -0001
New York City

Stocks are poised to open up Monday on a slide in oil prices and various merger news. Crude oil for August delivery marked the third trading day in a row that oil prices have declined as Hurricane Dennis missed the platforms in the Gulf of Mexico and helped relieve worries about U.S. supplies. No major economic data is due Monday.

U.S. MARKET AVERAGES

Dow Jones futures were recently up 20 points, while Nasdaq futures were ahead 3 points and S&P futures were up 1.6 point.

The 10-year Treasury dropped 6/32, or $1.86 per $1,000 invested, to yield 4.091%. The 30-year bond declined 11/32 to yield 4.344%. Yields move inversely to prices.

ECONOMIC NEWS

No major economic data is scheduled for release Monday.

International Trade Balance Data, or the difference between imports and exports of both tangible goods and services, is scheduled to be released Wednesday. Economists see trade difference for May at $57 billion, level with the previous April’s reading, when the nation’s trade gap increased to $57 million, or a billion less than expected. Exports in April soared 4.1% to $163.4 billion, while exports grew by 3% to $106.4 billion.

Also on Wednesday, the weekly Petroleum inventory data for the week ended, is scheduled to be released.

Consumer Price index reading for June is due on Thursday. Analysts forecast CPI to rise 0.3% in June. Excluding food and energy, the measure is seen to have risen by 0.2%. CPI for May showed a 0.1% decrease vs. expectations of a 0.1% positive growth. The May CPI reading showed the first downward shift in 10 months. The core CPI data, excluding food and energy, marked a 0.1% growth against expectations of a 0.2% growth.

The customary Jobless Claims data is slated to be released Thursday. Analysts expect Jobless Claims for the week ended July 9th to stay inchanged at 319,000.

Retail sales for the month of June are expected to have advanced by 0.9%. Excluding auto, analysts see 0.5% growth in retail sales. The reading is expected on Thursday.

Business Inventory data to be released on Friday is forecasted to mark a growth of 0.4% in May.

Producer Price, which is to be released on Friday, is expected to advance by 0.5% for June. Producer Prices in May fell 0.6%, the decline coming about mainly due to a 3.5% drop in energy prices. Excluding the volatile components, namely food and energy, the core Producer Price index edged up 0.1% for the month.

Industrial Production, which measures the physical output of the nation’s factories, mines and utilities is also expected Friday. Analysts look for 0.4% growth in the month of June. Industrial Production data for May rose 0.4%, higher than expectations of a 0.2% advance.

University of Michigan’s Consumer Sentiment index is to be released also Friday. Economists expect the index to be 94.6 for the month of July vs. 96 in June.

INTERNATIONAL MARKET NEWS

Asian stocks finished mostly higher returning to solid gains in reaction to strong U.S. market close Friday, positive U.S. jobs data and falling crude-oil prices. In early Asian trading crude-oil futures dipped to $58.66 a barrel, 77 cents down, as the expected hurricane Dennis was downgraded to a tropical storm. Japan’s Nikkei gained 1%, Hong Kong’s Heng Sang added 1.4%, and South Korea’s Kospi rose 2%. Through the region only China’s Shanghai Composite and Thailand’s SET ended down. In early trading the greenback quoted near 112.20.

European stocks advanced at mid-day trading following a strong close in U.S. markets Friday, gains in technology shares after the report of LG Philips, and crude-oil prices below $59 a barrel supporting airlines and carmakers. Averages in Germany added 1.1%, in France gained 0.6%, and in the U.K. rose 0.3% as business returned to normal after the attacks last week.

ENERGY, METALS AND CURRENCIES MARKETS

Oil fell in early trading after Hurricane Dennis came ashore Sunday in an area of the Gulf Coast that is unlikely to hit oil production. The storm reached southeast of Pensacola Sunday afternoon.

The August light crude contract lost 80 cents to $58.83 a barrel in electronic trading, while the August contract for Brent crude dropped $1.15 to $57.05.

The dollar traded at 112.24 yen, up vs. 112.08 yen late Thursday, while the euro slid to $1.1968 from $1.1943.

EARNINGS NEWS

Genentech is due to report second-quarter results after the closing bell Monday. Analysts see earnings at 26 cents a share versus 19 cents a share a year earlier.

LG Philips, flat screen maker, said its 2Q net income plunged 94% on weaker prices for LCDs but compared with the1Q when it posted a loss of $76 million, swung to a profit.

Posco, steelmaker, reported 38% profit increase for the second quarter on higher steel prices.

Pilgrim’s Pride, chicken products maker, raised its 3Q earnings outlook to the range of $1.17 to $1.22 a share vs. previously announced 81 cents to $1 per share. The lifted expectations are due to better results in U.S. and Mexico chicken operations.

CORPORATE NEWS

VNU said Monday it will buy IMS Health in a cash and stock deal worth nearly $7 billion, a premium of 16% over IMS's average stock price the last 30 days.

Pogo Producing released plans to buy Northrock Resources, the western Canadian crude-oil and natural-gas properties of Unocal, in a $1.8 billion deal.

Goldman Sachs Group Inc.'s private-equity division and Allianz AG of Germany are in talks to buy a stake of more than $1 billion in Industrial & Commercial Bank of China.