Futures Trade Mixed

Elena
14 Dec, 2006
New York City

U.S. stock futures turned mixed Thursday as strong earnings from brokerage giants Bear Stearns and Lehman Brothers eased concerns over an expected cut in oil output by the OPEC. Bear Stearns reported record-high financial results in Q4, helped by robust capital markets and investment banking activity. Investment bank Lehman Brothers said Q4 profit rose 22% on strong underwriting fees and improved performance in its capital markets business.

[R]9:00AM Stocks futures traded mixed amid strong earnings and reduced oil output.[/R]
U.S. stock futures turned mixed Thursday as strong earnings from brokerage giants Bear Stearns and Lehman Brothers eased concerns over an expected cut in oil output by the OPEC. Light, sweet crude rose 77 cents to $62.14 a barrel. In economic news, a surprising rise in November import prices offset a decline in weekly jobless claims. The Labor Department said that import prices rose 0.2% in November, as prices for imported petroleum fell but prices for imported natural gas soared. According to another report, weekly jobless claims fell 20,000 to 304,000, the lowest level seen since mid-October. The data helped boost confidence in the U.S. dollar vs. the euro and yen.

On the corporate news front, Investment bank Lehman Brothers Holdings Inc. ((LEH)) said Q4 profit rose 22% on strong underwriting fees and improved performance in its capital markets business. The brokerage posted net income applicable to common shareholders of $987 million, or $1.72 per share, compared with profit of $807 million, or $1.38 per share a year ago. Fourth-quarter revenue rose 23% to $4.5 billion. Analysts had expected the company to earn $1.68 per share in Q4, on revenue of $4.41 billion.

Bear Stearns Cos. ((BSC)) reported record-high financial results in Q4, helped by robust capital markets and investment banking activity. The financial company said that profit attributable to common shareholders rose 38% to $557.6 million, or $4 per share, up from $401.5 million, or $2.90 per share, a year earlier. Revenue rose 28% to $2.4 billion. The results exceeded expectations for earnings of $3.36 per share on $2.2 billion in revenues.

Among other stocks in focus, Dow component United Technologies ((UTX)) confirmed its earnings outlook for 2006. For 2007, the diversified industrial conglomerate said it expects earnings of $4.05 to $4.20 a share on revenue of $51 billion. Again on the Dow, Procter & Gamble ((PG)) confirmed its Q2 earnings and sales targets. The company projected earnings of 81 cents to 83 cents a share on sales growth of 5% to 8%.Costco Wholesale ((COST)) reported Q1 profit of 51 cents a share, up from 45 cents, in the year-earlier period, beating estimates of 50 cents a share. Pier 1 Imports ((PIR)) reported a wider Q3 loss on 12% lower sales. Pier 1 reported the loss widened to 83 cents a share, from 8 cents last year.

S&P 500 futures were down 0.60 at 1,426.00, while Nasdaq 100 futures erased earlier losses to trade up 2.50 points at 1,809.50. Dow industrials futures dipped 13 points to 12,410. The economic data released in early morning pushed bond prices lower, and lifted the yield on the 10-year Treasury note to a 2 1/2-week high of 4.599%.


[R]7:30AM Asian markets advanced Thursday as Australia, China surge.[/R]
Asian markets advanced on Thursday. The Australian market ended at a record high, supported by M&A activity including an $8.73 billion private-equity takeover of Qantas Airways. The benchmark S&P/ASX 200 index finished up 1.55% at 5,573.1. Miners also closed higher, with BHP Billiton 1.9% higher and Rio Tinto rising 1.6%. Chinese stocks reached a new high, surpassing previous peak set in 2001 on renewed confidence in the expectations for a stronger local currency and a firmer market. The Shanghai Composite Index advanced 1.2% to close at 2,249.11.

In Japan, the benchmark Nikkei 225 stock index gained 0.82% to finish at 16,829.20. Toyota Motor advanced 0.96% and Kyocera added 1.12%. Other advancers included Canon Electronics, gaining 3.23% and Internet-services company Softbank, advancing 1.61%. Toshiba closed 0.13% lower after it reported the sale of its entire stake in Toshiba-EMI to EMI Group of Britain.

The Hang Seng Index in Hong Kong moved 1.1% higher to 18,919.40. Among the big advancers was China Communications Services, networks builder for phone operators. It gained 7.1% after U.S. telecommunications-equipment maker Cisco Systems announced it would pay $50 million for a stake in the Chinese company.

The Korea Composite Stock Price Index, or Kospi, surged 2.5% to close at 1418.38. Advances were across the board as Kookmin Bank gained 2.3% and Shinhan Financial Group advanced 3.1%. Samsung Electronics and Hynix Semiconductor added 2% and 2.7%, respectively. LG.Philips LCD soared 3.9% on profit-taking after four consecutive sessions of declines. Taiwan shares made a moderate rally that closed five consecutives sessions of declines. The Weighted Price Index of the Taiwan Stock Exchange gained 0.4% to close at 7480.41.


[R]6:30AM European markets gained Thursday on strong banks, upbeat miners.[/R]
European markets were higher on Thursday. By mid morning, FTSE 100 in London climbed 0.3% to 6,212.3, Frankfurt Xetra Dax gained 0.2% to 6,536.59, and the CAC 40 in Paris added 0.4% to 5,499.28.

Advancers

HBOS of Britain was the main advancer in the banking sector, higher after a strong trading update. Its shares added 1.8%. Resource stocks also gained as Morgan Stanley lifted its price target on Xstrata, raising its shares 3.4%. Rio Tinto, the world second-largest mining company by market value, climbed 2 percent. BHP Billiton rose 1.4%. Goldman Sachs upgraded Norsk Hydro, the Norwegian oil, gas and industrial metals group, from neutral to buy, lifting its shares 2.9%.

ABN Amro, the Dutch bank, subject of bid speculation on Wednesday, gained 1.3 %, as traders stated they expected the most likely offer would come from domestic rival ING. ING shares were up 1.5%. Porsche, the German sports car maker, gained 2.4% after HVB raised its price target, keeping its buy rating

Oil and gold

Crude oil advanced on speculation that OPEC will enforce compliance with an earlier production reduction in high inventories and mild weather in the U.S. Crude oil for January delivery gained as much as 37 cents, or 0.6%, to $61.74 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It traded at $61.67 a barrel in early trade in London. Brent crude oil gained 17 cents to $61.50 a barrel on the London-based ICE Futures exchange. Gold for immediate delivery was little changed at $628.85 an ounce in London.

Currencies

The euro gained against the U.S. dollar on Thursday, finding its feet having lost the previous day on upbeat economic news from the United States. The euro bought $1.3226 in early trading, up from $1.3204 in New York late Wednesday. The British pound strengthened to $1.9677 from $1.9660. The dollar fell to 117.33 Japanese yen from 117.52 yen.