Modest Gains on Higher Oil

Elena
26 Dec, 2006
New York City

U.S. stocks moved slightly higher at opening on Tuesday as an increase in oil prices lifted major energy stocks like Exxon Mobil Corp. and Chevron Corp. Light sweet crude rose 22 cents to $62.63. Returning from the holiday weekend, investors were interested in retail stocks which were largely under pressure amid concerns that the holiday shopping season was somewhat disappointing. Target Corp., Best Buy, Federated Department Stores were among the early decliners.

[R]9:45AM Stocks opened modestly up on higher oil.[/R]
U.S. stocks moved slightly higher at opening on Tuesday as an increase in oil prices lifted major energy stocks like Exxon Mobil Corp. ((XOM)) and Chevron Corp. ((CVX)). Shares of airlines traded mixed, with larger network carriers losing ground to smaller regional airlines. Crude prices rose to $62.63 a barrel after the Iranian government expressed determination to continue its nuclear research despite threats the UN would impose sanctions on the country.

Returning from the holiday weekend, investors were interested in retail stocks which were largely under pressure amid concerns that the holiday shopping season was somewhat disappointing. Target Corp. ((TGT)), Best Buy ((BBY)), Federated Department Stores ((FD)) were among the early decliners. Industry gainers included Circuit City Stores Inc. ((CC)), RadioShack Corp. ((RSH)). Elsewhere, pharmaceutical and biotech shares advanced, boosted by strength in King Pharmaceuticals Inc. ((KG)). However, shares of Telik Inc. ((TELK)) tumbled 70% after the company said results from three separate Phase III trials related to its cancer drug Telcyta were ‘extremely disappointing’. In the first hour of trading, the Dow Jones industrial average rose 4.70, or 0.20%, to 2,405.88. The Standard & Poor's 500 index was up 2.75, or 0.19%, to 1,413.51, and the Nasdaq composite index was up 4.48, or 0.19%, at 2,405.66.


[R]8:00AM Stock futures moved slightly higher on post-Christmas reopening.[/R]
U.S. stock market futures moved slightly higher Tuesday following gains for Asian markets overnight. Market is expected to gain ground after closing down on Friday amid concerns about slowing economic growth, sparkled by disappointing durable goods orders report. Tuesday trading volume will be very light as many investors haven’t returned from vacation. European stock markets remain closed for extended Christmas holidays.

In early Tuesday morning, shares of retail stocks were in focus after a report showed holiday sales rose by only 3% in 2006, lower than last year''s 5.2% growth. In the energy sector, an increase in oil prices is expected to help energy stocks move to the upside. Exxon Mobil Corp. ((XOM)) shares attracted some attention as U.S. crude oil prices rose almost 1% to $63.01 a barrel after Iran threatened to use oil exports as a weapon following the U.N. Security Council''s decision to impose sanctions on its trade in nuclear goods.

Shares of FedEx Corp. ((FDX)) were also expected to draw attention after the company said European regulators had asked it for information as part of a probe into possible anti-competitive behavior in the air freight transport industry. Shares of Amylin Pharmaceuticals Inc. ((AMLN)) and Eli Lilly and Co. ((LLY)) appeared in the spotlight after U.S. regulators approved their diabetes drug Byetta as an add-on therapy for people with type 2 diabetes. Standard & Poor''s 500 futures were up 0.9 point, just above fair value. Dow Jones industrial average futures were unchanged, and Nasdaq 100 futures were up 1.5 points.


[R]7:30 AM Asian markets finished mostly higher on Tuesday with Japan, China up.[/R]
Asian markets finished mostly higher on Tuesday. The Nikkei 225 Index gained 0.5% to close at 17,169.19, its highest close since May 9. Advancers included Nippon Steel, rising 5.1%, Sumitomo Metal Industries, advancing 3.6%, and Mitsubishi Materials surging 5.7%. Pharma stocks also gained, with Takeda Pharmaceutical gaining 0.7%.

The Korea Composite Stock Price Index, or Kospi, in South Korea declined 0.3% to 1,433.92. Korean Air shed 1.4% and Kosdaq-listed Asiana Airlines declined 2%. Banks gained 0.4% on expectations of stable annual dividends compared with other shares. Korea Exchange Bank jumped 1.8%. LG.Philips LCD also rose 1.7% on bargain-hunting, bucking the technology downtrend.

The Shanghai Composite Index in China advanced 1.8% to 2,479.73. The pending Jan. 11 share listing by China Life, the No. 1 life insurer in the country, is helping aid demand. ICBC gained 5.8% and BOC gained 2.3%. Some large-cap fell, though, on profit-taking. Shanghai Pudong Development Bank dipped 1.2%, China International Marine Containers lost 3% and China Yangtze Power lost 1.7%.