Intel and Dell Drive Market Higher

123jump.com Staff
13 Nov, 2006
New York City

Upgrades on Intel and Dell helped to rally semiconductor and tech stocks in general. Broader averages gained on comments fom the Fed President of Dallas. His assertion that the economy is expanding forcefully helped market to further gains in large cap stocks. Intel rose 1.9%, Dell gained 3% and Tyson Foods gained 4% on profit forecast in 2007. Wynn Resorts to issue a special dividend of $6 per share.

[R]4:00PM NY – 10:00PM Germany[/R]

Bond Yields for 10-year closed at 4.627% and 30-year closed at 4.72%.

Crude Oil fell $1.01 to close at $58.58 per barrel, natural gas price rose 11 cents to close at $7.91 per mBTU.

Gold futures rose 30 cents to close at $626.10 per ounce, silver rose 2.5 cents to close at $12.91 and copper rose 0.7 cents to close at $3.08 per pound.

Asian markets closed lower led by 1.54% decline in Indonesia, 0.6% loss in Japan and 0.5% fall in Taiwan and Thailand. Honk Kong fell 0.12% after Henderson Land raied $710 million over the weekend. Australia lost 0.4%. India bucked the trend in the region and rose for the second day in three days to close up 0.87% higher to a new record.

European Markets closed higher led by 0.8% rise in France, 0.57% jump in Germany and 0.67% surge in Spain. Arcelor Mittal rose 1.1% after trading lower in the morning hours on the news that the company will not be able to sell Canadian unit Dofasco as holders of the foundation that holds the unit’s share will not dissolve the foundation.

Latin American Markets diverged in the trading. Mexico led the region with a gain of 1%, followed by 0.3% rise in Argentina however, Chile lost 0.2% and Brazil traded 0.3% lower. Canada was dragged 0.2% down on lower metals prices in gold, aluminum and nickel.

[R]1:00PM European markets closed higher, led by telecoms.[/R]
European stock markets closed in the green territory Monday, helped by telecoms stocks and solid gains for Alstom. The German DAX 30 advanced 0.57%, boosted by 2.6% gain for Deutsche Telekom which also helped its peers Vodafone, France Telecom, and Telecom Italia to rise. The French CAC 40 rose 0.8%, led by engineering group Alstom with an advance of 8.5% after posting sharply higher first-half profit. The index was also supported by strength in the metals sector, as Arcelor Mittal gained 1.1%. London FTSE 100 added 0.23%, with gains limited by miners BHP Billiton, Rio Tinto and drug maker Novartis. It declined 1.2% after it said there will be a three-month extension of a U.S. Food and Drug Administration review for Galvus.

Crude oil prices sharply declined Monday. Crude oil December contract fell 76 cents to $58.85 a barrel. The U.S. dollar gained ground against its rival currencies. The euro was quoted at $1.2810, down from $1.2847. The dollar bought 118.12 yen, up from 117.62. The British pound stood at $1.9020, up from $1.9113. European gold prices declined. In London, gold traded at $622.80 per troy ounce, down from $628.50. In Zurich, the precious metal traded at $622.65 per ounce, down from $628.35. Silver closed at $12.82, up from $12.77.

[R]11:30AM Stocks rallied. Dell, Intel, Merck led the indexes higher.[/R]
U.S. stocks extended earlier gains into a solid advance on speculations that key economic data, due out this week, will show strength in the economy with tame inflation. A positive economic view of a Fed official along with a decline in the price of oil further lifted sentiment.

Intel ((INTC)) was the leading gainer both on the Dow and the Nasdaq. Intel rallied 1.7% after Citigroup upgraded the chip sector. The semiconductor sector showed a significant strength, with National Semiconductor ((NSM)), up 1.3%, Maxim Integrated Products ((MXIM)), up 1%, and Novellus ((NVLS)), 2.3% also contributing to the advance.

A 1.2% gain for Merck & Co. ((MRK)) also contributed to the Dow's advance as the drug maker benefited from a regulatory setback for rival Novartis. The Nasdaq benefited from strong gains by some computer hardware, software, and internet stocks. Dell ((DELL)) climbed 1.85% after Deutsche Bank raised its price targets on the personal computer giant. Among other gainers, Tyson Foods ((TSN)) gained 4.6% after reporting a fiscal Q4 loss vs. a year-earlier profit, with lower revenue, in line with estimates.

Outside the tech sector, significant strength emerged among airline stocks on the back of weaker oil prices. At the same time, the price decrease contributed to some weakness among energy stocks. Similarly, gold stocks moved lower along with the price of gold. In late morning trading, the Dow Jones industrial average rose 55.15, or 0.46%, to 12,163.58. The Standard & Poor's 500 index was up 6.17, or 0.45%, to 1,387.07, and the Nasdaq composite index rose 16.58, or 0.69%, at 2,406.30. Bonds were weaker, with the yield on the benchmark 10-year Treasury note rising to 4.62% from 4.59% late Friday.


[R]10:30AM Strong earnings and foreign fund inflows boost Sensex to new high.[/R]
The Sensex on BSE finished 116.09 points, or 0.87%, higher to end at 13,399. The market-breadth remained strong. As 1474 shares advanced on BSE, 1080 declined and 72 stocks were unchanged. From the Sensex stocks, 22 advanced, while the rest declined. The turnover on BSE was Rs 3,925 crore, higher than Rs 4,568 crore on Friday. The turnover on NSE was Rs 6,744.13 crore, lower than Rs 8,232.44 crore on Friday.

Economic news

Wheat sowing in India has picked up sharply, the farm ministry said on Monday, with farmers planting a million hectares more in the first month of the new season than in the same period last year.

The government on Monday signed an agreement with the U.S. Federal Aviation Authority to help it develop and modernise its nascent but booming aviation sector.

Most active stocks

Shyam Telecom was the most active stock with a turnover of Rs 114.35 crore followed by Jaiprakash Associates, Hindustan Zinc, Reliance Communications.

Advancers

NTPC led the advance. The company jumped 5.5% to Rs 137.85, while Reliance Energy rose 2.9% to Rs 536. Infosys rose 1.2% to Rs 2,165.30. The stock had advanced after shareholders recently approved the proposal for a sponsored ADR issue.

Cellular services large-cap Bharti Airtel rose 4.6% to Rs 569.10. Bharti Airtel said on Monday it was talking to Microsoft, to offer software and other services to small and medium scale businesses in India.

Reliance Communications rose 3% to Rs 403.50. The stock also hit Rs 404.40, a record high duriing the trading. RCL and state-run BSNL, have entered into an agreement enabling subscribers to access 1-800 numbers or toll free numbers provided by either operator.

Housing finance large-cap HDFC jumped 4.6% to Rs 1,565. Zee Telefilms rose 3% to Rs 341, after it bought 50% stake in Dubai-based Ten Sports TV channel. Tata Motors gained 2% to Rs 835. HDFC Bank rose 1% to Rs 1,055, and ICICI Bank gained nearly 1% to Rs 840.

Index heavy, Reliance Industries, failed to capitalise on the rally today. The stock was flat at Rs 1,287.15, and traded within a narrow range.

Jaiprakash Associates jumped 5% to Rs 671, extending its recent advance after a court order which paved the way for the land development projects of the company.

Forbes Gokak jumped 20% to Rs 565.50, after the company said it had constituted a committee of directors to examine possibilities of restructuring.

Decliners

The large-cap decliners were Hero Honda which declined 1.52% to Rs 714.50, Tata Steel fell 1.19% to Rs 496.55, Hindalco sank 1.03% to Rs 182.05, ONGC fell 0.79% to Rs 872 and Ranbaxy fell 0.30% to Rs 397.

Other news

After its acquisition of 50% stake in Ten Sports, Zee Group has said there could be a possibility of merger of the Dubai-based channel with its sports channel, Zee Sports, in future.


[R]9: 45AM Stocks opened mixed on cautious trading ahead of key data release.[/R]
Stocks opened mixed Monday on cautious trading ahead of retail sales and inflation data later in the week. On Tuesday the Labor Department releases its Producer Price Index and the Commerce Department issues retail sales data. Both are expected to give investors a better reading on the economy, inflation and consumer spending.

Intel ((INTC)) was an early gainer, up 1.1%, lifted by an upgrade for the chip sector from Citigroup. SanDisk ((SNDK)) fell 2.2% after UBS downgraded the company to neutral from buy. Tyson Foods ((TSN)) reported a Q4 loss vs. a year-earlier profit. Revenue fell from a year ago, but matched forecasts. The stock rose 2.2% in early trading. ISIS Pharmaceuticals ((ISIS)) was a notable gainer, up 29% after the drug maker said data from two Phase II trials showed its drug, ISIS 301012, reduces LDL, or bad, cholesterol.
KB Home ((KBH)), homebuilder, rose 3% on news its longtime CEO, resigned under pressure on Sunday, agreeing to return $13 million in profit from backdated stock options. The review revealed that company had misreported several unspecified grant dates for options issued between 1998 and 2005. KB Home expects to take a charge to its earnings of no more than $50 million, but may be forced to cover tax obligations related to the improper grants.

Significant weakness was visible in the gold sector, due to lower price of the precious metal. While a decrease by the price of oil contributed to some weakness among energy stocks, the oil-sensitive airline sector benefited from the price decrease. In the first hour of trading, the Dow Jones industrial average fell 19.69, or 0.16%, to 12,088.74. The Standard & Poor's 500 index was down 1.38, or 0.10%, at 1,379.52, and the Nasdaq composite index dropped 1.32, or 0.06%, at 2,388.40.


[R]9:30AM FTSE 100 advances on Monday on merger and acquisition talks.[/R]
In late morning, the FTSE 100 in London gained 7.6 points, or 0.1%, at 6,216.3.

Advancers

Resolution, the closed life assurance fund consolidator, was a leading gainer, up 3.9%. Talk in the market was of a possible merger with life assurer Prudential, up 2.4%, while others suggested Resolution could tie-up with Scottish Widows, the life assurance arm of Lloyds TSB, up 0.8 %.

ITV gained 2.9% amid reports that NTL was planning to meet with the shareholders of the broadcaster to explain a takeover approach.

Rumours of a counterbid from the US pushed Scottish Power up 1.3%. Iberdrola, the Spanish energy company, has confirmed an interest in buying the Scottish power company.

Decliners

The falling price of copper sent miners south. Mining group Rio Tinto fell 4.1% while Antofagasta dropped 3.4% and Xstrata was 2.3% lower.

Biofuels lost 8.9% as Numis Securities reiterated its price target on the biodiesel producer. Biofuels said on Friday that the lower oil price and a recent rise in feedstock prices had led to tighter profit margins.

Other news

The Office for National Statistics announced that output prices climbed by 1.7% in the year to October, down from the increase of 1.8% seen the previous month and the lowest reading since March 2004.


[R]9:00AM Stock futures pointed to a flat opening on weaker oil.[/R]
Stock futures turned flat, as crude oil retreated from an early rally toward $60, falling 77 cents to $58.82. S&P 500 futures were down 0.8 point, about flat with fair value. Dow Jones industrial average futures were down 7 points and Nasdaq 100 futures gained 0.25 point.

Among stocks to watch, SanDisk Corp. ((SNDK)) was downgraded to neutral from buy at UBS, with the broker citing expectations for a likely oversupply in flash memory chips in 2006-2007.Citigroup raised utility operator Sierra Pacific Corp. (((SPP)) to ‘buy’ from ‘hold.’

Of companies in focus, Tyson Foods Inc. ((TSN)), the world's largest meat processor, reported a wider-than-expected Q4 loss to 17 cents per share, compared with a profit of 33 cents per share last year, missing estimates of a 4-cent loss. The wider loss was attributed to one-time charges and losses in the chicken and beef sectors.


[R]8:00AM Stock futures pointed to a positive start.[/R]
Stock market futures moved slightly higher Monday morning, with investors shifting their focus from election news toward inflation and CPI data later this week. Dow Jones futures were recently up 12 points, S&P 500 futures were unchanged and Nasdaq futures rose 2 points. Last week, stocks finished positive, as American International Group results and retreating crude oil helped offset disappointment with Walt Disney & Co.'s latest financial results.

Isis Pharmaceuticals ((ISIS)) soared 36% in pre-open trading after the company said that results from Phase II trials showed that ISIS 301012 significantly reduced cholesterol.
Companies releasing quarterly earnings Monday include Tyson Foods ((TSN)) and Dick's Sporting Goods ((DKS)). In corporate news, KB Home ((KBH)) announced late Friday that CEO Bruce Karatz is leaving after the conclusion of a stock-option grant price probe. He'll repay the company $13 million. International Business Machines ((IBM)) is reportedly joining a consortium led by Citigroup that is bidding for China's Guangdong Development Bank.

Of the stocks, driven by analyst comments, SanDisk ((SNDK)) was downgraded to neutral from buy at UBS, with the broker citing expectations for a likely oversupply in flash memory chips in 2006 and 2007. In contrast, Gannett ((GCI)) was upgraded to buy from neutral at Merrill Lynch.

Among European movers, Deutsche Telekom ((DT)) rose in Frankfurt after announcing that CEO Kai-Uwe Ricke had submitted resignation. Novartis ((NVT)) moved down after the Swiss drugmaker said it is submitting more data to the U.S. Food and Drug Administration on its diabetes drug Galvus. The company expects that the new data will push back an FDA review by three months.


[R]7:30AM Asian markets end mostly lower Monday, Japan leading the decline.[/R]
Asian markets declined on Monday. The Nikkei 225 Index shed 0.6% to finish at 16022.49. Traders were also cautious ahead of July-September GDP data due Tuesday. Commodity and domestic demand issues fell in early trading. Mizuho Financial Group posted a 2.1% fall and Shinsei Bank lost 2.6%. Nippon Oil shed 0.98% and trading company Itochu sank 3.2%. Major machinery maker Fanuc fell 0.9%.

The Hang Seng Index in Hong Kong fell 0.1% to 18868.54. Henderson Land fell 6.3% after it raised $710 million through a share placement over the weekend. Shares of other developers fell as concern grew that they may follow suit. Sun Hung Kai fell 1.27% and Cheung Kong Holdings declined 1.29%.

South Korean shares finished flat, with strong gains in technology shares offsetting losses in shipbuilders. The Korea Composite Stock Price Index, or Kospi, ended up 0.1% at 1396.69. Technology shares rose on bargain-hunting, with Samsung Electronics advancing 1.6% and Hynix Semiconductor gaining 2.6%. Hyundai Heavy Industries dropped 5.7%, Daewoo Shipbuilding & Marine Engineering lost 2.8% and Samsung Heavy Industries lost 5%.

In Taiwan, shares end down 0.5% at 7136.06, with technology stocks leading the decline. TSMC fell 1.3%, UMC declined 1.1% and MediaTek lost 1.9%. Gains in paper and property-related stock countered losses. Chung Hwa Pulp rose 5.8%, while Goldsun Development & Construction rose 5.4%. Australia S&P/ASX 200 Index fell 0.3% to 5418.4, as plunging metal prices pressured the market and sent miners Rio Tinto and BHP Billiton sharply lower.


[R]6:30AM European stocks move higher Monday on upbeat earnings.[/R]
European markets were higher on Monday. In early trade, the FTSE 100 in London climbed 0.2% to 6,218.0, Frankfurt Xetra Dax gained 0.1% to 6,365.67, and the CAC 40 in Paris added 0.3% to 5,459.83.

Advancers

Alstom It reported a 27% rise in first-half operating profit, together with an operating margin of 6.32%. The outlook was also positive, targeting an operating margin of 7% for 2007 and full-year sales growth of more than 10%. Alstom shares rose 5.1%.

Spanish Sacyr Vallehermoso, rose 4.1% ahead of its nine-month results. Deutsche Telekom rose 2.6% after the company announced on Sunday the resignation of Kai-Uwe Ricke.

Decliners

Miners declined the most on fears that a slowdown in the global economy would hurt demand for metals. Rio Tinto fell 2.4%, while BHP Billiton lost 1.7%.

Shares in Swiss drugmaker Novartis fell 1.6% after asking the US Food and Drug Administration to extend its review period on Galvus, its diabetes treatment, to consider new data showing that skin problems in animal tests were not seen in trials on patients.

Iberdrola, the Spanish utility, fell 1.8% after ratings downgrades followed announcement on Friday that it was in merger talks with Scottish Power.

Oil and gold

Crude oil fell as mild weather in the U.S., the world's largest energy consumer, reduced demand for heating oil. Crude oil for December delivery fell 27 cents to $59.32 a barrel in electronic trading on the NYME. Brent crude oil was down 7 cents to $59.64 a barrel on the London-based ICE Futures exchange.

Gold for immediate delivery gained as much as $4.15, or 0.7 %, to $632.70 an ounce. Gold futures for December delivery rose $3.50, or 0.6 %, to $633.60 an ounce.

Currencies

In morning trading, the euro bought $1.2857, up from $1.2847 late Friday in New York. Among other currencies, the British pound rose to $1.9122 from $1.9113 while the dollar was down slightly to purchase 117.41 Japanese yen from 117.62 yen.