Strong Earnings Weak Opening

Elena
30 Nov, -0001
New York City

Market remains cautious at the opening despite some companies reporting better than anticipated earnings. So far S&P companies are reporting earnigs of at least 9% or better than a year ago and 74% of the companies have beathen the estimates. The market remains in a cautious mood as it awaits the Consumer Confidence Index reading.

U.S. MARKET AVERAGES

Early trading in the market remains lackluster driven by select earnings. Major averages are not posting any gains but the stocks in general remain under pressure. At the opening the there are 31 news highs on NYSE and 27 on Nasdaq but there are also 29 new lows on Nasdaq.

Shares of Texas Instruments, DuPont, Black & Decker, BP PLC, and Netflix are likely to trade higher during the session on strong earnings report released last night.

INTERNATIONAL MARKET NEWS

Asian-Pacific benchmarks ended mixed, trading amid Wall Street losses and crude-oil gains. Japan’s Nikkei lost 0.2% as investors remained cautious, awaiting important earnings reports later in the day from Nissan Motor and Advantest Group. Taiwan’s Weighted Index shed 0.9% after earnings from the chip giant Taiwan Semiconductor.

The other markets in the region ended up, supported by optimism for domestic corporate profits. China’s Shanghai Composite climbed 2.6%, South Korea’s Kospi added 0.2%, and Singapore’s Straits Times rose 0.5%.

The dollar traded in the upper half of 111-yen in early trading in Tokyo and fetched 810.97 yuan. Crude-oil for September delivery rose 37 cents to $59.02 a barrel on the NYME.

European markets traded slightly up at mid-day, reflecting the effects of a weaker close to a volatile U.S. trading session after early gains were offset by rising crude-oil prices and somewhat disappointing earnings reports from German chip maker Infineon and French auto maker Peugeot.

The German DAX 30 edged up 0.1% as investors were affected by data, stating positive business climate, the French CAC 40 added 0.4%, and FTSE 100 in London rose 0.1%

ENERGY, METALS AND CURRENCIES MARKETS

The U.S. dollar climbed against the yen on fading expectations of further revaluation of the yuan, reaching 112.17 yen, up from 111.41. In early European trading the euro fell to $1.2016, down from $1.2062; the pound traded at $1.7373, up from $1.7464. In London gold futures traded lower at $424.60 per ounce, down from $425.40.

EARNINGS NEWS

Omnicom Group, advertising holding company, reported 2Q net income growth of $1.24 per share, up from $1.10 last year on higher consumer spending and revenue increase.

Argo, agricultural equipment maker, posted 2Q lower profit of 47 cents a share, down from 50 cents a year ago. The company sees 3Q earnings between 30 and 33 cents a share and 2005 income flat with 2004.

7-Eleven, food retailer, reported 2Q higher net income of 45 cents a share vs. 38 cents last year on boosted demand and strong same-store sales.

AK Steel, steelmaker, announced 2Q earnings drop of 8 cents per share compared with 85 cents a year earlier. Excluding non-recurring charges quarterly profit would have been 35 cents, below estimates of 38 cents a share. The company expects 3Q average selling prices to be lower than in 2Q.

Infineon Technologies, German chip maker, posted 3Q fourfold wider loss of 240 million euros compared with 56 million euros last year, citing one-time charges and low computer memory prices. The quarterly results failed to meet estimates of a loss of 118 million euros.

BP PLC, oil company, reported 2Q profit rise of $4.981 billion, up from $3.873 billion a year ago on high oil prices and 24% revenue growth. The quarterly results include $700 million charge to settle claims from a deadly refinery explosion in Texas.

Netflix, online DVD rental services provider, posted 2Q net income rise of 9 cents per share, up from 4 cents a year ago on lower costs and fewer subscriber cancellations. The company raised its 2005 profit to $2.4 million to $11.9 million compared with earlier forecast of a loss between $5 million to $15 million.

Archipelago Holdings, stock-exchange operator, reported net income fall of 6 cents per share vs. 42 cents for the last-year same quarter, citing sharply higher expenses, including acquisition costs.

Starwood Hotels & Resorts Worldwide, hotel and leisure services provider, announced 2Q profit drop of 65 cents a share, down from 72 cents a year earlier, including after-tax charge of $11 million. The company projected full-year profit before special items to be $484 million.

Waddel & Reed, fund manager, reported 2Q net loss of 9 cents per share on legal, personnel and restructuring charges. Excluding these items the company posted earnings of 27 cents a share vs. 31 cents a year ago.

Mother’sWork, maternity-apparel retailer, posted 3Q income fall of $1.03 per share vs. $1.24 a year ago on 9% lower same-store sales. The company forecast 4Q net loss in the range of 52 to 72 cents a share and same-store sales from down 1% to up 1%.