Earnings and Economic Data to Set the Pace

albena
30 Nov, -0001
New York City

Futures were little changed in early trading, pointing to a slightly higher to flat opening, after Amazon posted better-than-expected earnings and sales after the market close Tuesday. Kellogg and ConocoPhillips are also slated to report Wednesday. Investors are gearing up for U.S. durable-goods orders data, expected to be modestly lower in June. Oil prices will also be in focus as the latest U.S. inventory data, due at 10:30 is seen to point to a fourth weekly decline in crude oil stock piles.

U.S. MARKET AVERAGES

Stocks are seen to rise slightly at the open Wednesday following positive earnings results from Amazon.com, as investors await reports on durable-goods orders and new home sales. Oil prices will be in focus as the latest U.S. inventory data, due at 10:30 a.m. is expected to show a fourth weekly decline in crude oil stock piles.

The Internet retailer Amazon posted second-quarter profit decline of 32% due to an income-tax expense, but results generally beat views on strong sales by independent merchants who sell through Amazon's Web site. Amazon raised its full-year outlook, and its shares jumped 11% in after-hours trading Tuesday after the financial results news.

Shares of Amazon.com gained more than 10% and Boeing ((BA)), which also boosted its outlook, jumped nearly 2% before the opening bell on the Inet electronic brokerage system.

ECONOMIC NEWS

The Commerce Department is scheduled to release the June durable goods data at 8:30 a.m. Economists expect a 0.5% drop for durable goods orders in June on the average.

The Commerce Department is due to release the new-home sales data for June at 10:00 a.m. Economists are looking for a 0.2% increase to an annual rate of 1.300 million single-family homes versus a level of 1.298 million in May.

The Federal Reserve is due to release at 2:00 p.m. its latest Beige Book report summarizing economic activity throughout the country.

INTERNATIONAL MARKET NEWS

Major Asian markets closed generally higher Wednesday. Tokyo shares closed up the dollar rise vs. the yen and some important corporate results inspired buying of major electronics and automakers stock. The Nikkei 225 gained 0.8% to close at 11,835.08. Hong Kong's Hang Seng Index finished up 0.3% at 14, 817.47. Australia's All Ordinaries Index ended up 0.2% at 4,347.60, while Singapore's Straits Times Index gained 0.4% to 2,331.88. Seoul's Kospi index added 0.2% to 1,093.03 after S&P's boosted its debt ratings for South Korea to a seven-year high on increasing foreign-exchange reserves and stronger finances at lenders.

European shares advanced Wednesday, helped by steel producers such as Arcelor and Corus Group as investors scrutinized the flood of French corporate news. Chipmakers slid, following worse-than-expected results within the segment. Germany's DAX 30 index climbed 0.1% at 4,850, France's CAC 40 index added 0.4% to 4,438 and the U.K.'s FTSE 100 index advanced 0.2% at 5,266.

ENERGY, METALS AND CURRENCIES MARKETS

Oil prices were slightly down ahead of Wednesday's weekly report on U.S. fuel inventories.

The September light crude futures contract for NYMEX dropped 24 cents to $58.96 a barrel in electronic trading, while the September contract for Brent crude declined 30 cents to $57.73.

The benchmark 10-year Treasury note lost 1/32, or 31 cents per $1,000 invested, to yield 4.232%. The 30-year bond was unchanged to yield 4.451%. Yields move inversely to prices.

The dollar traded at 112.62 yen, up versus 112.51 late Tuesday, while the euro dropped to $1.1991 versus $1.2016.

EARNINGS NEWS

Kellogg ((K)) and ConocoPhillips ((COP)) are among the other major companies that are slated to report Wednesday.

WellPoint Inc. ((WLP)) reported second-quarter net income of 90 cents a share vs. 83 cents last year as revenue jumped to $11.3 billion vs. $4.61 billion on more than doubled premiums.

Monster Worldwide ((MNST)) reported a second-quarter profit from continuing operations of 21 cents per share, up vs. 12 cents per share last year. Analysts had expected the company to make 20 cents per share. Revenue rose 32% to $239 million. The company now expects earnings of 88-91 cents per share for the full year, with 23-24 cents per share in 3Q.

Colgate-Palmolive ((CL)), a household products maker, reported second-quarter earnings of 62 cents a share, down vs. 66 cents a share a year ago. Revenue rose to $2.84 billion from last year's $2.57 billion, beating analyst forecasts of $2.77 billion.

PepsiAmericas Inc. ((PAS)), the No. 2 bottler of Pepsi ((PEP)) beverage, reported second-quarter net income rose 18% on 12% higher revenue. Earnings reached 53 cents a share vs. 43 cents last year, beating estimates of 46 cents.

Sprint Corp. ((FON)) reported second-quarter earnings of 40 cents a share, up vs. a year-ago profit of 16 cents a share, topping estimates for a profit of 36 cents a share. Sprint forecast revenue growth of 3% to 4% for the full year and capital spending of between $4 billion and $4.2 billion.

International Flavors & Fragrances, flavor products maker, posted 2Q earnings of 60 cents a share vs. 59 a year ago on sales of $515.6 million. The company sees its 2005 earnings in the range of $2.08 to $2.18 per share.

Ipsco, steel maker, reported 2Q profit jump of $2.56 a share on 21.6% sales growth, beating expectations of $2.45 a share. Earnings in the 3Q are expected to be between $2.35 and $2.55 a share.

IT Group CGI, IT services provider, reported 3Q net income of 13 cents per share on sales increase of 11%. The company lowered its full-year guidance to a 17% rise in revenue and continuing operations profit.

Monaco Coach, manufacturer of recreational vehicles, posted 2Q earnings drop of 3 cents a share, down from 40 cents a year ago on sales decrease. Excluding one-time charge of 5 cents earnings would have been 8 cents a share.

Renault, French auto maker, reported first-half profit increase of 52% to 2.21 billion euros, supported by a rise in average interest-earnings loans outstanding and 3.8% revenue growth.

BG Group, natural gas company, posted 2Q net income jump of 43% to 275 million pounds on 18% revenue growth, key projects and company’s growth program.

B/E Aerospace, aircraft interior products maker, reported 2Q swung to profit of 14 cents per share on 12% revenue growth of $207.6 million, exceeding estimates of 12 cents per share. The company projected full-year earnings of 50 cents a share on $800 million revenue.

Puma AG, German sportswear maker, posted 2Q net income rise of 58.9 million euros on 12% sales increase. The company lifted its 2005 sales outlook up to 10% and earnings in the range of 264 to 274 million euros. Puma announced the formation of joint ventures in Japan, Hong Kong and China, and Taiwan.

Praxair, producer of industrial gases, reported 2Q profit rise to 63 cents a share, up from 53 cents in the prior-year same quarter due to 20% revenue growth, exceeding estimates of 62 cents a share. The company sees 3Q earnings between 61 and 64 cents a share.

CB&I, engineering & construction company, posted 2Q net income rise of 21 cents per share compared with 5 cents a year ago on 32% revenue increase.

CORPORATE NEWS

General Motors ((GM)) said it is to end its popular employee discount program next week after two months of strong sales, and instead will concentrate on permanently lower sticker prices.

France Telecom ((FTE)) agreed to acquire 80% of Spanish mobile operator Amena for $7.7 billion. France Telecom shares climbed 1.6% in Paris.

Software giant Oracle ((ORCL)) is in talks with Citigroup's private-equity unit over the purchase of its 43.1% controlling stake in India's I-flex Solutions, the maker of the world's best-selling banking software, in a deal that could be worth more than $650 million.