FTSE Tracks U.S. Futures Lower

Ivaylo
20 Oct, 2006
New York City

Heavy truck maker Caterpillar failed to mpost results in line with expectations and led U.S. futures lower. The London benchmark index also followed suit. Corus, which has agreed to a deal from Indian Tata Steel, also declined. Next and media company SMG sank as well. Wolfson Microelectronics plummeted after the company said full-year revenues would fall below expectations. Hanson advanced despite profit warnings from Martin Marietta and ITV rose too. The FTSE 100 declined 1.4 points, or 0.02%.

[R]9:30AM The London benchmark FTSE 100 declines, following U.S. futures down.[/R]
The FTSE 100 in London declined 1.4 points, or 0.02%, to 6,155.4 in early afternoon on Friday.

Advancers

Pearson, the media group that owns the Financial Times, advanced 1.7%, its highest level since April. The advance was sparked by Goldman Sachs, which encouraged clients to buy ahead of the trading update of Pearson.

ITV ignored a profits warning from SMG, as talks of a private equity bid continued to emerge. Its shares improved 0.9%. Despite a profits warning from US rival Martin Marietta, building materials group Hanson gained 1.3%. Rumours of a private interest helped bookmaker Ladbrokes gain 3%

Decliners

SMG was down 26% and Corus slid 1.4% after the Anglo-Dutch steelmaker recommended an offer from Tata Steel of India. Next was also under pressure, falling 1.4% on further worries about tough trading.

Wolfson Microelectronics was in focus. Its shares slumped 37% after the chip designer warned full-year revenues would fall short of expectations because of a glut of consumer electronics goods. The Wolfson warning impacted fellow chip designer CSR, which was down 3%.

Other news

UK public borrowing hit 7 billion pounds in September, leaving the Treasury with much ground to make up if it is to reach its Budget public finance forecasts this financial year.

[R]7:30AM Strong U.S. close and oil production cuts led Asia to a broad rise.[/R]
Asian markets finished broadly higher on Friday. The benchmark Nikkei 225 rose 0.61% to finish at 16651.63. Canon gained 0.93% and Toyota added 1.47%. Machinery maker Komatsu climbed 1.83%, while Nippon Steel reported a 0.81% gain. Sony, however, shed 0.83% after the company revised its earnings forecast downward due to troubles with laptop batteries and delays at its games unit.

The Hang Seng Index in Hong Kong rose 0.7% to end at 18113.55. The China Enterprises Index was up 0.4% to 7,469.80. The Shanghai Composite Index declined 0.3% a day after mainland authorities announced that GDP growth was 10.4% in the third quarter, down from 11.3% annualized growth it the second quarter.

Australia S&P/ASX 200 index closed up 1% at 5335.4. South Korea Kospi index advanced 0.8% and Singapore Straits Times Index was up 0.2%. Taiwan''s Taiex index rose 0.5% and Malaysia KLSE Composite traded nearly flat. Shares traded in New Zealand were lower 0.2%. Indonesia Jakarta Composite Index declined 0.1%.

[R]6:30AM European stocks advance on oil cuts and strong overnight U.S. finish.[/R]
European markets were higher by mid-morning on Friday. The U.K. FTSE 100 gained 0.44% at 6,183.30, the German DAX 30 rose 0.4% at 6,204.16, the French CAC 40 advanced 0.5% at 5,384.01.

Advancers

BP and Royal Dutch Shell each advanced 1%, boosted by the unexpected oil production cut by OPEC. Shares of PartyGaming gained 1.6%, following its statement that in the few days since U.S. customers were prevented from accessing the real money sites, average daily gross revenue of the non-U.S. facing business has been 2% below that of the third quarter.

Valeo, a French auto parts maker, also gained after recent slips. Valeo shares jumped 6.8% after it reported that its quarterly profit sank76%. Valeo agreed on a memorandum of understanding to sell its electrical motors and actuators unit for an undisclosed price.

Decliners

Corus Group declined 1.5% as investors were disapponted that it gave its agreement to be bought by Tata Steel for 4.3 billion pounds ($8 billion). Wolfson Microelectronics, a Scottish chipmaker producing chips for the iPod music device of Apple Computer, fell 30% after registering a build-up of inventory in consumer electronics products, leading to a fourth-quarter revenue guidance between $52 million and $57 million.

Oil and gold

Crude oil for November delivery advanced 40 cents to $58.90 a barrel in on the NYME. December Brent crude on London ICE Futures exchange rose 33 cents to $61.20 a barrel.

Gold opened on Friday at a bid price of $600.15 a troy ounce, up from $596.00 late Thursday.

Currencies

The euro was steady against the U.S. dollar Friday, holding onto gains that it made on disappointing U.S. economic data. The euro bought $1.2624 in morning European trading, barely changed from its level of $1.2626 in New York late Thursday. The British pound was unchanged at $1.8777. The dollar rose to 118.32 Japanese yen from 118.15 yen.

[R]5:00AM Gold and silver prices rallied on Thursday, boosted by the oil increase.[/R]
The most-active December gold gained $9.90 to end at $602.50 a troy ounce at the NYME. The most-active December silver contract held onto gains and settled 34 cents higher at $12.16 an ounce. January platinum gained $1.70 to finish at $1,094.80 an ounce, while December palladium edged up $4.90 to close at $337.40 an ounce. The most-active December copper contract rose 1.35 cent to end at $3.5095 per pound.

November light, sweet crude oil settled up 85 cents at $58.50 a barrel. November heating oil advanced 2.42 cents to stop at $1.7201 a gallon. November unleaded gasoline moved up 1.91 cents to close at $1.4894 a gallon. November natural gas settled up 32.5 cents at $7.132 a million British thermal units.

On the New York Board of Trade, December Arabica coffee futures closed 0.40 cent lower at $1.0185 a pound, with March down 0.40 cent at $1.0585. Futures on raw sugar in foreign ports for March finished unchanged at 11.59 cents a pound, with May steady at 11.74 cents.