Stocks Struggle as Oil Rises

albena
30 Nov, -0001
New York City

Stocks were mixed in early trading Tuesday as traders shrugged off positive earnings news from Pepsi Co. Inc. and were cautious ahead of economic data and earnings reports scheduled later this week. With no major economic news due Tuesday stocks struggled with no direction and investors held onto their recent gains.

U.S. MARKET AVERAGES

The Dow Jones industrial average was up 70.58 to 10,519.72, the broader Standard & Poor's 500 dropped 0.35 to 1,219.09, and the Nasdaq composite fell 3.18 to 2,132.25.

The S&P Retail Index climbed to 459.7. Home Depot shares jumped 1%, or 38 cents, to $40.68.

Shares of Hudson United Bancorp ((HU)) rose in early Tuesday trading in the financial sector after the company agreed to be acquired by TD BankNorth at a 14% premium. Hudson shares leapt 11.2% to $41.70, TD BankNorth shares dropped 2% to $29.37.

7-Eleven added $2.07, or 6.6%, to $33.42. The company’s gasoline sales at stores open at least a year jumped 13% in June, and merchandise sales rose by 5.9%.

DreamWorks Animation SKG shares dropped 3.54, or 13%, to 23.27 after the animation studio cut its 2Q and full-year earnings outlook due to higher-than-expected video returns and disclosed the SEC has launched an informal inquiry related to trading of its shares and its financial disclosures.

Pilgrim's Pride leapt 2.18, or 6.1%, to 38.15. The company boosted 3Q guidance on better-than-anticipated results from its U.S. and Mexican chicken operations.

General Motors gained 1.12, or 3.2%, to 35.80. General Motors Acceptance Corp., the auto maker's financing arm, backed its outlook of consolidated net income of at least $2.5 billion for this year and reaffirmed that it plans to remit more than $2 billion in dividends to its parent auto maker.

Alcoa rose 49 cents, or 1.8%, to 27.69. The gain followed Alcoa's 4.3% jump on Friday, after the aluminum producer posted better-than-expected 2Q earnings.

INTERNATIONAL MARKET NEWS

Asian-Pacific markets ended mixed with Japanese and South Korean indexes up helped by technology shares and easing crude-oil prices. Japan’s Nikkei extended gains on optimism for strong corporate earnings and closed 0.2% higher. South Korea’s Kospi added 0.3% on the back of strong offshore buying of technology and bank shares. China’s Shanghai Composite rose 3.4% on a late-session surge in blue chips. Hong Kong’s Heng Sang fell 0.1%. The dollar bought 111.16 yen at 5 p.m, in Tokyo it traded between 111.08 and 111.79 yen.

European markets edged off three-year highs on declines in the oil sector and despite lifted forecasts which gave a boost to Alcatel and L’Oreal and telecom gains which offered some support. German’s DAX 30 fell 0.2% after the statistics office said that the value-added tax will be increased to 18%. The French CAC 40 lost 0.1% and the U.K’s FTSE 100 declined 0.2% on mixed corporate news and the continuing aftermath of the terrorist bombings.

ENERGY, METALS AND CURRENCIES MARKETS

Oil prices surpassed $59 a barrel under the threat of a new Atlantic storm after Hurricane Dennis had passed without causing major destruction to oil facilities. U.S. light crude delivery for August went up 31 cents to $59.23 a barrel. London Brent gained 24 cents to $57.68 a barrel.

Gold futures rose in London to $426.95 bid per troy ounce, up from $425.80. In Hong Kong gold gained $2.2 to close at $427.25 per ounce. Silver was also up to $7.11 per ounce from $7.07.

The U.S. dollar dropped against other major currencies. It fell to a2-week low vs. the euro on trade-deficient concerns. The euro quoted at $1.2170, up from $1.2072. The pound traded at $1.7673, a rise from $1.7575. The greenback bought 111.15 yen, down from 111.85.

EARNINGS AND CORPORATE NEWS

Marshall & LLsley, financial services firm, posted 2Q income growth of 81 cents per share vs. 67 cents a year ago on increased total loans and leases beating expectations of 74 cents a share.

Ameritrade, online broker, reported 3Q earnings rise of 18 cents per share vs. 15 cents a year ago on higher interest income and lower expenses. Analysts had expected 17 cents per share.

Audiovox , consumer electronics maker, reported 2Q profit increase of 25 cents per share vs. 16 cents last year on higher sales of flat-screen TVs and a tax benefit.

Bank of Granite posted 2Q earnings rise to 30 cents a share from 24 cents for the last-year same quarter.

Eagle Broadband, provider of broadband and communication services, reported 3Q net loss of $3.95 million, an improvement from a loss of $4.38 million a year ago mainly on depreciation and amortization expenses.

Energy Transfer Partners, posted a record 3Q profit jump to $189.5 million from $21.3 million last year including special items.

Horizon Health, contract manager of clinical services, posted 3Q net income increase of $3.5 million, or 24 per share vs. $2.7 million, or 24 cents a share a year ago. The company projected 2005 earnings between $1 and $1.02 a share.

Open Text, software maker, warned that 4Q results will be weaker than previously announced 30 to 40 cents per share though exact range is not given.

Smart & Final, food and supplies warehouse operator, posted 2Q net income of 25 cents per share compared with 26 cents a year earlier. Same-store sales rose 4.1%.

TTI Telecom International, networking software provider, posted a preliminary narrowed 2Q loss of 21 cents vs. a loss of 55 cents a year ago on positive restructuring effect.

Universal Forest Products, a maker of lumber and building materials, posted 2Q earnings increase of $1.20 a share compared with $1.06 last year on higher sales volume and better results for framing operation. The company raised its 2005 earnings outlook by 15 to 20%.

L’Oreal SA said that strong 2Q results and favorable currency fluctuations ‘lead it’ to expect a considerable improvement in 2005 results. 2Q sales grew 5.45% to $3.62 billion euros. Comparable-store sales rose 5.1%.

Alcatel, French telecom equipment maker, posted 2Q net income of 16 cents per share including a tax benefit and one-time capital gain exceeding analysts’ expectations of 14 cents a share.

Infosys Technologies, Indian software and consulting company, reported rise in 1Q profit of 45 cents per share, up from 31 cents a year ago beating estimates of 43 cents a share. The company lifted its 2Q guidance to the range of 46 to 47 cents a share.

ECONOMIC NEWS

There are no major economic news scheduled to be released Tuesday.

Economy in Singapore advanced at a faster-than-anticipated speed in the 2Q on strong growth in the services sector and improved manufacturing data. On seasonally adjusted and annualized basis GDP rose 12.3% rebounding from a first-quarter slump and allaying fears of recession.

Lehman Brothers continues to add investment bankers to its staff in Japan led by the ambition to be one of the top 5 merger-and-acquisition advisors in Japan over the next three years. It is trying to assert its presence in sectors such as health care, financial technology and natural resources.