Stocks Flat in Early Trading

albena
30 Nov, -0001
New York City

The core rate of inflation at the wholesale level fell 0.2% vs. expected rise 0.4% in June. The New York Federal Reserve Bank's Empire State Manufacturing index rose to 23.9 in July vs. a revised 10.5 in June. U.S. industrial production climbed 0.9% in June, the strongest monthly increase since Feb. 2004. Economists were expecting production to rise 0.4%.

U.S. MARKET AVERAGES

General Motors jumped 3.2% on a government report showing strong auto sales in June.

Exxon Mobil fell dropped 1.8% on the decline in oil prices.

ECONOMIC NEWS

The Producer Price Index, a measure of wholesale inflation, was unchanged for June. The data, released by the U.S. Labor Department, marked a 0.1% decline in core PPI, which excludes the volatile food and energy sectors.

Inventories at U.S. businesses rose 0.1% in May, to $1.3 billion, the Commerce Department reported Friday.

That rise outpaced the 0.1% drop in sales, the Commerce Department figures show.
The inventory-to-sales ratio was at 1.30 in May for the second month in a row. Economists were expecting inventories to rise 0.3%. Retail inventories rose 0.2% in May. Excluding motor vehicles, retail inventories climbed 0.6%. Inventories at manufacturing firms were unchanged in May for the second month in a row. Manufacturing sales jumped 1.8% after dropping 5.9% between March and April. Inventories at wholesalers grew 0.1%, while sales climbed 1.6%.

The Federal Reserve Bank's Empire State Manufacturing index rose to 23.9 in July from a revised 10.5 in June.

Manufacturing activity in the New York area continued to rebound in July, according to the New York Federal Reserve Bank. The bank's Empire State Manufacturing index climbed to 23.9 in July versus a revised 10.5 in June. The index continues to advance after hitting a two-year low of -11.1 in May. Readings over zero indicate expansion. Economists forecasted the index to remain flat at about 11.6 in July.

INTERNATIONAL MARKET NEWS

Major Asian benchmarks ended lower on falling crude-oil prices as forecasts show that Hurricane Emily won’t have a major impact on oil production in the U.S Gulf, on declining dollar and early gains in the tech sector which markets failed to hold throughout the day. Japan’s Nikkei ended down 0.1% as investors took profit ahead of a three-day holiday. South Korea’s market leader Samsung Electronics led the index downward 0.2% on reporting 46% decline. Crude-oil prices fell $2.21 to close at $57.80 a barrel on the NYME, and in after-hours trading it was $58.16. The dollar was down 0.4% against the yen at 111.86.

European markets turned higher at mid-day after early losses, reflecting gains in airlines shares which were boosted by declining crude-oil prices which sent oil giants such as BP and Total in the negative territory. Oil companies lost as oil tumbled to a two-week low and held below $59 a barrel. Oil-sensitive Air France gained 1.3% and British Airs rose 2.2%. German’s DAX 30 climbed 0.2%, France’s CAC 40 added 0.1%, and London’s FTSE 100 was down 0.1%.

ENERGY, METALS AND CURRENCIES MARKETS

Oil futures rebounded after recent declines as Hurricane Emily progressed through the Gulf of Mexico while investors were digesting a report showing weaker Chinese energy demand for 2005. Light sweet crude for August delivery in NY added 50 cents to $58.30 a barrel. September contract of London Brent rose 51 cents to $57.47.

Gold was tightly traded in early European trading with the market trying to establish poise after falling to a six-week low as the strong dollar weighed. Gold futures traded from $419.20 to $419.90 bid per troy ounce. Dealers said sentiment was tending weaker with further fall seen probable. Silver was fairly steady at $6.96 to $6.99 per ounce.

The U.S. dollar gained versus the euro and pared a decline against the yen after a Fed. Reserve index of NY state manufacturing suddenly climbed. The dollar advanced against the euro to $1.2032. The greenback bought 112.26 yen.

EARNINGS NEWS

GE ((GE)) posted second-quarter earnings of 44 cents a share on revenue of $41.6 billion. GE boosted the low end of 2005 earnings outlook, now expecting earnings of $1.80 to $1.83 per share for the year, while analysts expect $1.82 earnings per share.

National City ((NCC)) also reported its second-quarter earnings Friday morning, posting earnings for the three-month period of $0.97 per share, an increase versus last year's level of $0.83 per share. The results surprised analysts, who had expected the company's profit to decline to $0.75 per share.

First Data ((FDC)) posted earnings for the second quarter of $0.50 per share, including $0.04 per share of Concord integration expense and $0.02 per share of other charges. In the same quarter a year ago the company earned $0.53 per share. Analysts had forecasted a quarterly profit of $0.57 per share. Revenue for the quarter totaled $2.6 billion, up 3% versus last year.

Sony Ericsson, a mobile-phone manufacturer and a 50-50 joint venture between Sony ((SNE)) and Ericsson ((ERICY)) said Friday second-quarter net income dropped to 75 million euro versus 89 million euro in the last year’s comparable quarter mainly due to continued research and development investment. Pre-tax profit dropped to 87 million euro versus 113 million euro, disappointing analysts' views for pre-tax profit of 92 million euro. Sales for the three-month period advanced to 1.6 billion euro versus 1.5 billion euro as the number of units shipped rose to 11.88 million versus 10.4 million a year earlier.

Samsung Electronics reported 2Q profit decline in line with expectations. The company earned 1.69 trillion won vs. 3.13 billion last-year same quarter due to falling memory chip prices.

A.O.Smith, maker of electric motors and water heaters, posted 2Q earnings fall of 22 cents a share vs. 58 cents a year ago. Excluding restructuring charges earnings would be 48 cents a share, 2 cents ahead of expectations.

CORPORATE NEWS

In corporate news, computer and peripheral maker Hewlett Packard ((HPQ)) is expected to announce a restructuring later this month that could lead to large job cuts.

European Commission will approve Procter & Gamble's ((PG)) $57 billion deal for Gillette ((G)) according to reports Friday. The deal isn’t likely to endanger competition in the consumer goods market, though the final decision on whether to approve the merger is up to Competition Commissioner Neelie Kroes.

Strategic Hotel Capital Inc. ((SLH)) said it has agreed to acquire the Fairmont Chicago hotel from an affiliate of The Swig Company of San Francisco for $154.7 million.

Late Thursday, drug maker Novartis said it agreed to acquire the North American consumer-medicines business of Bristol-Myers Squibb for $660 million.

OTHER NEWS

Royal Dutch Shell Group unveiled a $10 billion cost overrun and delays at an important Russian energy project. Shell announced costs in the second stage of the massive Sakhalin II natural-gas project may double to $20 billion and expects a delay of the project by half a year.