Futures Gain Before Earnings

Elena
10 Oct, 2006
New York City

U.S. stock futures seemed poised for a positive market opening, with investors looking forward to the third-quarter earnings season. Dow component Alcoa will be first to release quarterly results, expected to earn 77 cents a share on revenue of $7.75 billion. The stock was up nearly 2% in pre-open trading.

[R]09:00AM Stock futures pointed to a positive start.[/R]
U.S. stock futures seemed poised for a positive market opening, supported by lower oil prices and gains for Internet stocks after Google agreed to buy video Web site YouTube Inc. Investors were also looking forward to the third-quarter earnings season.Dow component Alcoa ((AA)) will be first to release quarterly results, expected to earn 77 cents a share on revenue of $7.75 billion.

Drugstore chain CVS Corp. ((CVS)) rose 2.3% before the opening bell to $30.40 after the company raised its Q3 and full-year earnings outlook. The stock was up nearly 2% in pre-open trading. Shares of Supervalu ((SVU)) climbed over 3% in the pre-open after the grocery retailer reported Q2 earnings increase, beating forecasts.

Elsewhere, cruise operators Carnival ((CCL)) and Royal Caribbean Cruises ((RCL)) were downgraded at J.P. Morgan to neutral. The same brokerage took a more positive stance on homebuilders, upgrading D.R. Horton Inc. ((DHI)) and Standard Pacific Corp. ((SPF)) to overweight from neutral and Toll Brothers Inc. ((TOL)) to neutral from underweight. In merger-and-deal news, Google Inc. ((GOOG)) added 0.8% to $431.70 after the Internet services giant agreed to buy YouTube for $1.65 billion. S&P 500 futures edged up 0.70 of a point at 1,359.90 and Nasdaq 100 futures were up 3.75 points at 1,707.50. Dow industrial futures were flat at 11,928.


[R]8:00AM Google agreed to acquire YouTube for $1.65 billion.[/R]
Google Inc. ((GOOG)) agreed late Monday to takeover privately held YouTube Inc. for $1.65 billion in stock, with the boards of both Google and YouTube approving the terms of the deal. Google agreed to let YouTube operate as a separate unit and work out of its offices in Silicon Valley. It also allow youTube to keep all its employees. The deal is expected to close in the fourth quarter. Further details were not disclosed.

The acquisition of the No. 1 Internet video-sharing site on the Web is the biggest deal for Google, giving the online search engine a leading role in the Internet''s online-video marketplace. Like other Internet companies, Google relies on video to attract bigger numbers of customers and generate more advertising profits. There are plans for incorporating YouTube videos into Google search results, and making YouTube part of Google''s AdSense advertising feature. In its less than two years on the Web, YouTube currently streams 100 million videos daily to an audience of nearly 40 million a day. Shares of Google rose to $429, and were up as much as $4 a share in after-hours trading.


[R]7:30AM Asian markets recover from N. Korea scare, end higher on Tuesday.[/R]
Asian markets ended higher on Tuesday. The Nikkei 225 Average in Japan finished up 0.3% at 16,477.3. Shares of Canon gained 0.9, while automaker Toyota''s shares rose 0.7%. Shares of Toshiba Corp gained 2% after the company said it will invest 5.5 billion yen ($46 million) in a venture to produce LCD panels with a Polish subsidiary of South Korea''s LG.Philips LCD Co.

South Korea''s Composite Stock Price Index, or Kospi, was up 0.7%, at 1,328.37, rebounding from a 2.4% slump in the previous session. South Korean steelmaker Posco Co. advanced as much as 2.1% on expectations of further industry consolidation in the wake of Tata Steel of India bid for the Anglo-Dutch Corus Group Plc. Shares of Samsung Electronics Co ended up 0.2%.

Hong Kong Hang Seng Index gained 0.8% to 17,823.7. The China Enterprises Index rose 1.3% and shares listed in Malaysia, New Zealand and Shanghai traded nearly flat. Singapore Straits Times Index edged up 1%, while Indonesia Jakarta Composite was up 0.7%.
Australia S&P/ASX 200 index advanced 1%. BHP Billiton advanced 3.1%. Upbeat oil prices inspired shares of oil and gas producers. Inpex Holdings Inc gained 1.5%. Australian Woodside Petroleum advanced 1.6%


[R]6:30AM European markets advanced, recovering from political concerns.[/R]
European markets were higher by mid-morning on Tuesday. London FTSE 100 gained 0.3% to 6,048.0, Frankfurt Xetra Dax added 0.5% to 6,111.41, and the CAC 40 in Paris climbed 0.4% to 5,306.83.

Advancers

EADS, the French aerospace group, rose 3.9% after the new chief executive of the company troubled Airbus unit said there would be painful job cuts. The U.K. index got a boost from mobile phone giant Vodafone shares of which climbed 2.4%.

French aero-engine maker, Safran, gained 3.3% after it revealed late on Monday its CFM56 engine set a new sales record at the company. Ras Holding gained 1.6% and French group Axa rose 1.1%

Banca Intesa in Italy rose 1.5% as it neared agreement on a sale of a number of its branches to Credit Agricole in order to meet regulatory terms for the approval of its merger with Sanpaolo IMI. Sanpaolo shares gained 1.3%. Sanofi-Aventis shares added 0.6%.

Decliners

There was no eminent decliner this morning in Europe.

Oil and gold

Crude oil for November delivery rose 58 cents to $60.54 a barrel in Asian electronic trading on the NYME. November Brent crude at London ICE Futures traded 31 cents higher at $60.85 a barrel.

Gold rose as high as $579.60 an ounce and slid to $578.40/579.40 an ounce, still higher than $576.00/577.10 an ounce late in New York.

Currencies

The euro inched down to $1.2598 from $1.2605.The dollar initially gained to 119.35 yen, its highest level since hitting 119.40 yen Feb. 3, but fell to 119.10 yen, down from 119.12 yen late Monday in New York. The British pound traded at $1.8672, compared with $1.8706 yesterday.