Market Updates

Apple Sinks 5% on Stock-Option Forgery

Elena
27 Dec, 2006
New York City

    Stock markets opened higher for a second day in a row, lifted by bargain hunting on a broad-market scale. The tech-heavy Nasdaq advanced in early trading, supported by gains fot Microsoft, up 0.3%, Intel higher by 1.1%, and Dell, rising 1.3%. However, shares of Apple Computer dropped 5% to $77.48 amid a news report, saying that company officials could have falsified past stock-option documents to maximize profits for executives.

[R]9:45AM Stock markets opened higher, helped by strong tech stocks.[/R]
Stock markets opened higher for a second day in a row, lifted by bargain hunting on a broad-market scale. The trading session is expected to be of thin volume, typical of the week at the end of year. Oil and natural gas prices continued to decline due to mild winter weather. Light sweet crude fell 23 cents to $60.87 a barrel on the Nymex. The New York Stock Exchange honored the late U.S. President Gerald Ford with two minutes of silence.

The tech-heavy Nasdaq advanced in early trading, supported by gains for Microsoft ((MSFT)), up 0.3%, Intel ((INTC)) higher by 1.1%, and Dell ((DELL)), rising 1.3%. However, shares of Apple Computer ((AAPL)) dropped 5% to $77.48 amid a news report, saying that company officials could have falsified past stock-option documents to maximize profits for executives. Auto stocks were also in the spotlight in opening hours. Ford Motor ((F)) gained 1.9% at $7.63 after Toyota Motor Co. ((TM)) confirmed that the two auto makers held talks in Japan last week. Toyota rose 1.4% to $133.50.

Merger-and-acquisition activity also generated positive mood. Cadmus Communications ((CDMS)) soared 16.6% after it agreed to be acquired by Cenveo ((CVO)) in a deal of about $235.1 million that will create the third-largest graphic services provider in North America. Cenveo rose 4.7%. In the first hour of trading, the Dow Jones industrial average rose 53.59, or 0.43%, to 12,461.22. The Standard & Poor's 500 index was up 5.25, or 0.37%, at 1,422.15, and the Nasdaq composite index rose 12.55, or 0.52%, to 2,426.06.


[R]9:30 AM London benchmark index advanced Wednesday on miners, oil stocks.[/R]
The FTSE 100 in London started 0.8% higher at 6,239.6, an increase of about 50 points.

Advancers

London-listed oil leaders supported the FTSE 100 uptrend as crude prices recoverd from losses in the previous session to re-state themselves around $61 per barrel. BP gained 0.8% with Royal Dutch Shell advanced 0.5%.

Mining stocks were also in focus in line with stronger commodities markets, adding their weight to the overall advance. Vedanta Resources was 2.4% higher and Anglo American added 1.6%.

Pre-Christmas talk of bid interest in InterContinental Hotels supported its shares as trading resumed. The company gaine further 5.6% and kept its place at the top of the large-cap advancers.

Drinks company Diageo, brewer of Guinnes, Bailey’s and Johnnie Walker whiskey, advanced 2.3% on strong buying interest.

Barclays stated that its sale of FirstCaribbean to the Canadian Imperial Bank of Commerce generated $989 million in cash. Its shares gained 1.2%.

Decliners

There were no major decliners in an opening of strong index gains. Only drug developer Skypharma is flat following its statement that its Flutiform project is costing more than expected.


[R]9:00AM Stock market futures traded higher.[/R]
U.S. stock market futures traded higher on Wednesday, bolstered by speculations for a potential alliance between giant automakers Toyota Motor ((TM)) and Ford Motor ((F)). Toyota shares rose more than 2.5% to a record high in Tokyo. Shares of Ford were up 1.5% at $7.60 in early electronic trading. Investors were also awaiting key housing data, expected to provide clues on the health of the U.S. economy. In deal news, Cenveo Inc. ((CVO)) agreed to acquire Cadmus Communications Corp. ((CDMS)) for $24.75 per share in cash to become the third-largest graphic services provider in North America. Standard & Poor''s 500 futures were up 4.2 points, above fair value. Dow Jones industrial average futures were up 43 points, and Nasdaq 100 futures were up 8.75 points.


[R]7:30 AM Asian markets finished mostly higher Wednesday, Japan, HK rally.[/R]
Asian markets finished mostly higher on Wednesday. The Nikkei 225 Index in Japan gained 0.31% to close at 17,223.15, which is the highest closing level since May 8. Export-oriented stocks and buying in large-caps boosted the market pacing overnight gains on US markets in post-holiday trading. Toyota gained 1.9% after reports that an official at the company met last week in Tokyo with his counterpart from U.S. auto maker Ford. Other advancers included Honda, 0.99% higher and electronics maker Sony, up 0.54%.

The Hang Seng Index in Hong Kong advanced 2.1% to 19,725.73, supported by China Netcom which soared 31% on talks that it may buy assets from rival China Unicom, which surged nearly 8%. Chinese financial stocks also rallied tracking a surge on the domestic market and proposed tax policies on the mainland. Financial firm China Life gained 11.7%, Ping An rallied 17.2% and Industrial and Commercial Bank of China jumped 13.2%.

The Shanghai Composite Index in China added 2.3% to 2,536.39. The benchmark stock index settled above the 2,500 level for the first time, as securities funds were eager to push up large-capitalized companies. Singapore shares ended up after hitting a record high intraday on broad strength in large-caps. The Straits Times Index advanced 0.6% to 2,961.25.

In Australia, expectations of a strong month end fueled stocks to a record high. The S&P/ASX 200 Index edged 0.7% higher to a record high finish of 5,643.2. In New Zealand stocks touched a new all-time high in thin post-holiday trading. The NZX-50 Index gained 0.3% to 4,032.07. Taiwan closed marginally higher as the Weighted Price Index of the Taiwan Stock Exchange inched 0.1% higher to 7,733.18.

[R]6:30AM Europe advanced in early trade Wednesday on stronger euro, weaker oil.[/R]
European markets were higher on Wednesday. In early trading, the FTSE 100 in London was up 0.8%, Frankfurt DAX gained of 1.2%, and the French CAC 40 rose 0.9%.

Advancers

InterContinental Hotels led UK advancers, advancing more than 4% on bid talk. The company has turned down any comments in the past on such rumours.

Diageo and SABMiller, both beer makers, gained each around 1.5% and cigarette maker British American Tobacco edged 1.3% higher. Tobacco shares in Europe have advanced since Gallaher Group stated it was in takeover talks.

U.K. clothing retailer Moss Brothers rallied 10% after a report that it may get an 80-million-pound offer from Icelandic investment group Baugur

DaimlerChrysler AG, the fifth-largest carmaker in the world, and Arriva Plc, the biggest operator of buses in London, gained supported by lower energy costs. Daimler gained 1.2% and Arriva added 2%.

Decliners

UCB SA was the leading decliner, down 2.4%. Shares in the Belgian maker of the Zyrtec allergy drug plummeted after U.S. regulators wanted more information on its experimental Cimzia treatment for Crohn disease.

Oil and gold

Crude oil was near $61 a barrel on forecasts that mild weather in the U.S. will reduce demand for heating oil. Crude oil for February delivery dropped 1 cent to $61.09 a barrel in after-hours electronic trading on the New York Mercantile Exchange in early trade in London. Brent crude for February settlement rose 11 cents to $61.21 a barrel on the ICE Futures exchange in London.

Gold for immediate delivery rose $2.50, or 0.4%, to $627.20 an ounce in early trade in London. Prices rose $3.95 yesterday.

Currencies

The U.S. dollar was mostly down versus other major currencies in European trading Wednesday morning. The euro traded at $1.3157, up from $1.3111 late Tuesday in New York. The British pound is set for its biggest annual gain since 1990 as it became the third-most popular reserve currency in the world and the Bank of England raised interest rates to their highest in five years. Against the dollar, the pound traded at $1.9598 early trade in London, up from $1.9534.

The dollar has plunged this month against the yen on speculation a slowing economy will make the Federal Reserve lower interest rates next year. The dollar fell to 118.65 yen from 119.15 late yesterday in New York.

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