Monthly Retail Sales and Oil in Focus

albena
30 Nov, -0001
New York City

Stocks are poised to open lower on Thursday, as some profit-taking is expected at opening after a slight recovery of the futures market on a couple of good results across Europe. With little economic news scheduled for today, trading may be dull ahead of July unemployment report due Friday. Investors are likely to refrain from taking positions as oil prices edged up. Same-store sales at Wal-Mart rise 4.4% in July.

U.S. AVERAGES

With little economic news scheduled for release today, trading may be dull ahead of tomorrow's July monthly employment report.

On Thursday investors will get July sales reports from major retail chains. Analysts expect that sales at stores open at least a year, a closely watched retail measure known as same-store sales, advanced 4.1% in the month, stronger than the 3.1% increase in that measure a year ago.

The dollar stabilized vs. European currencies ahead of interest rate decisions from the Bank of England and European Central Bank, while oil futures bounced back above $61 a barrel in electronic trade.

Wal-Mart Stores ((WMT)), the world's largest retailer, said Thursday that July same-store sales, or sales from stores open at least a year, rose 4.4%. Wal-Mart's namesake stores posted a 4.2% gain, while Sam's Club increased 5.1%. Total sales for the 4 weeks ended July 29 advanced 10.7% to $22.81 billion vs. $20.61 billion last year. For August, the world's largest retailer forecast a 3% to 5% same-store sales increase. Shares in Wal-Mart dipped 12 cents to close at $49.68 Wednesday.

ECONOMIC NEWS

While investors gear up for the monthly employment report due Friday, weekly data on initial jobless claims is to be released before the opening bell on Thursday. Economists expect claims to come in at 315,000 for the week ended July 30, an advance from the previous week's level of 310,000.

INTERNATIONAL MARKET NEWS

Asian benchmarks closed lower with the Japanese Nikkei down 0.8% ahead of political uncertainty, retreating from a 15-month high on profit-taking in automakers, banks and select blue-chip stocks. The other regional markets followed the suit as Hong Kong’s Hang Seng lost 0.1%, South Korea’s Kospi dropped 0.5%, and Taiwan’s Straits Times was down 0.2%. In Tokyo the dollar was trading at 111.17 yen.

European markets traded lower at mid-day ahead of an unexpected interest rate cut from the Bank of England and bank stocks down after earnings reports from France’s Societe Generale and Royal Bank of Scotland. Oil shares also erased some of their recent gains after an overnight decline of oil prices below $61 a barrel. The German DAX 30 was flat, the French CAC 40 lost 0.3%, and London’s FTSE slipped 0.1%.

ENERGY, METALS AND CURRENCIES MARKETS

Crude-oil futures edged up after an overnight oil prices decline, despite positive U.S. inventory data, as traders remain cautious because of possible supply concerns, caused by refinery shutdowns and an approaching hurricane season. Light sweet crude for September delivery rose 17 cents to trade at $61.03 a barrel on the NYME. London Brent September delivery gained 13 cents to reach $59.78.

Gold futures rose in early European trading. In midmorning trading in London traders fixed a recommended price of $435.60 bid per troy ounce, up from $434.60. In Hong Kong gold gained $3.10 to close at $436.35. Silver opened at $7.25, down from $7.26.

The U.S. dollar was mixed in early European trading. The euro quoted at $1.2310, down from $1.2311. The greenback bought 111.38 yen, up from 111.14. The British pound stood at $1.7759, down from $1.7794.

EARNINGS NEWS

GPC Biotech, genomics and proteomics developer, posted a 2Q net loss of 53 euro cents per share, vs. a net loss of 43 euro cents per share in the year-ago comparable period on revenue decline.

Newcastle Investment, real estate investment trust, reported 2Q profit of 64 cents per share, up vs. 51 cents per share a year ago on strong revenue, matching analysts’ expectations of 64 cents per share.

Tesco, supermarkets, hypermarkets, and convenience stores operator, posted 2Q net income of 10 cents per share vs. a net loss of 4 cents per share in the same quarter a year earlier on revenue growth.

Gold Fields, gold exploration and development company, posted 4Q net earnings of 8 cents per share, up vs. 4 cents a share last year on revenue growth, topping analysts’ estimate of 3 cents per share.

AIXTRON, chip equipment maker, posted 2Q net loss of 2 euro cents per share vs. a net income 1 euro cent per share in the same period last year, despite a rise in revenue.

Pengrowth, oil and natural gas company, posted 2Q net income of C$0.34 per unit, up vs. C$0.24 per unit in the comparable quarter a year earlier on strong oil and gas sales.

Kubota, maker of tractors and farm equipment, posted 2Q net income of 19.1 billion yen, up vs. the comparable period last year on jump in income and strong sales.

Costco, wholesale club operator, posted net sales of $4.02 billion, up vs. $3.71 billion in the same period last year on sales growth.

UniLever, consumer products maker, posted 2Q net profit of 73 euro cents per share, down vs. 1.00 euro per share a year earlier, turnover edged slightly up.

Toll Brothers, builder of luxury homes, reported 3Q revenues increased to $1.54 billion from $991.3 million in the same quarter last year on rise in contracts.

ShopKo, discount stores operator, reported 4.9% decline in sales over the same month last year. 2Q earnings results due on August 18.

TODCO, provider of contract oil and gas drilling services, reported 2Q net income of 18 cents per share, compared to a net loss of 12 cents per share in the same quarter last year on revenue growth, matching analysts expectations.

PMI, provider and promoter of homeownership and mortgage transactions, said 2Q net income totaled $1.04 per share, up vs. 93 cents per share in the year-earlier comparable period on revenue growth, beating analysts’ expectations of $1.01 per share.

CORPORATE NEWS

Three major automobile manufacturers – Honda Motor Co., General Motors Corp. and BMW AG - are developing cooperative technologies for hydrogen fuel-cell vehicles, according to reports. The companies hope the collaboration will cut development costs and plan to standardize fuel nozzles and other parts so they can sell fuel-cell-powered vehicles around the world.

Infosys Technologies Company Ltd. ((INFY)), the China subsidiary of Infosys Technologies Ltd., announced that it has signed letters of intent with Shanghai Zhangjiang Company Ltd. and Administrative Commission of Hanghzhou Hi-Tech Development Industry Zone-Hangzhou, to set up software development centers in China. Infosys currently has 250 employees in China. The new centers, to be located in Shanghai and Hangzhou, would see total investment of $65 million in the next five years and would contain 6000 engineers. The Shanghai centre would get an initial investment of $10 million in the next two years. On the Hangzhou project, Infosys plans to invest $15 million in the next two years.

Private-equity firm Bain Capital and MacGregor Golf, one of the oldest names in golf equipment, are making a bid for Callaway Golf Co., lifting the chances that the world's largest golf-club maker will be taken private. The all-cash offer values Callaway at as much as $1.24 billion, or $16.25 a share, slightly more than an unsolicited all-cash offer of $16 a share made in late May by buyout company Thomas H. Lee Partners and insurance giant Fidelity National Financial.