Wells Fargo Profit up 13%

Elena
16 Jan, 2007
New York City

Wells Fargo & Co. posted net income rise of 13% to 64 cents a share, up from 57 cents a share a year ago on 11% revenue increase. Quarterly earnings met analyst expectations, while the revenue came in above average estimates. Company''s shares gained 1.4%. Forest Laboratories said Q3 profit rose 28% on a 16% sales growth. The pharmaceutical company earned 78 cents a share, compared with a profit of 57 cents a share last year on 18% revenue increase. The stock jumped 3.7% in pre-market trading.

[R]9:00AM Market futures turned lower on weaker NY manufacturing activity.[/R]
U.S. stock futures reversed from earlier gains, dragged by surprising weakness in manufacturing activity in the New York region and a warning from security software maker Symantec. The New York Fed said that its general business conditions index fell to 9.13 in January from 22.19 in December, disappointing analysts who had expected a decline to 20.0. Shares of Symantec ((SYMC)) dropped 7% in the pre-open after the company lowered its outlook citing a weaker-than-expected performance by its data center management business and higher deferrals than expected. The company cut its adjusted earnings estimate to 24 to 25 cents a share from 29 to 30 cents a share, and its revenue forecast to $1.30 billion to $1.32 billion from $1.325 billion to $1.355 billion.

On the earnings news front, Wells Fargo & Co. ((WFC)) posted net income rise of 13% to 64 cents a share, up from 57 cents a share a year ago on 11% revenue increase. Quarterly earnings met analyst expectations, while the revenue came in above average estimates. Company's shares gained 1.4%. Forest Laboratories ((FRX)) said Q3 profit rose 28% on a 16% sales growth. The pharmaceutical company earned 78 cents a share, compared with a profit of 57 cents a share last year on 18% revenue increase. The stock jumped 3.7% in pre-market trading. Precious metals miner Freeport-McMoRan Copper & Gold Inc. ((FCX)) reported Q4 profit drop of 8% to $1.99 per share, down from $2.19 per share last year, citing a decrease of production at its core Indonesian operations. The quarterly earnings missed estimates of 2.19 per share. The stock slipped 3.2%. S&P 500 futures erased earlier gains to trade down 0.20 of a point at 1,440.60 and Nasdaq 100 futures slipped 0.75 of a point to 1,861.50, after also seeing earlier gains. Dow industrial futures inched up 1 point to 12,627.

[R]NY manufacturing growth slowed more than expected.[/R]
AM Tuesday morning, the Federal Reserve Bank of New York released its report on activity in the manufacturing sector in the state of New York in the month of January. The report showed that pace of growth in the sector slowed much more than economists had expected. The New York Fed said that its general business conditions index fell to 9.13 in January from 22.19 in December, with a positive reading indicating growth in the sector. Economists had expected the index to fall to about 20.0.


[R]8:00AM U.S. stock futures traded slightly up, helped by $4.8 B acquisition deal.[/R]
U.S. stock market futures traded modestly higher after the long holiday weekend. Deal news from General Electric and economic data, expected to show improving New York-area manufacturing sentiment were in focus. On Friday, Wall Street ended higher, boosted by strength in the energy and technology sectors.

On Monday, General Electric ((GE)) agreed to acquire the aerospace business of Britain''s Smiths Group for $4.8 billion, and also agreed to a joint venture with Smiths in the area of detection. The market also awaited another batch of Q2 earnings reports, with Wells Fargo ((WFC)) and Freeport McMoRan Copper and Gold ((FCX)) on deck. Intel Corp. ((INTC)) is due to release its quarterly results after the close of trade. The world''s top chipmaker is expected to earn 25 cents per share for Q4. The chipmaker closed at $22.13 Friday. According to reports, Intel will restructure its Israeli operations and create a joint venture with STMicroelectronics ((STM)). Pfizer Inc. ((PFE)) may draw some attention on reports that CEO Jeffrey B. Kindler is about to announce several thousand job cuts. S&P 500 futures rose 2.2 points at 1,443.00 and Nasdaq 100 futures advanced 4 points at 1,866.25. Dow industrial futures rose 25 points.


[R]7:30 AM Asian shares ended lower on Tuesday on weak banks, car-makers.[/R]
Asian markets closed lower on Tuesday. The Nikkei Index in Japan ended the day 0.04% lower at 17,202. Toyota slipped 0.3% and Nissan shed 1.4%. Mizuho Financial Group edged 0.4% lower and Sumitomo Mitsui Financial Group lost 0.8%.

In Hong Kong, the Hong Kong Hang Seng Index lost 0.2% to 20,028. PetroChina shed 1.4%, as some analysts downgraded their forecasts and ratings on the stock after the company reported 2006 operating data Monday. Chong Hing Bank, one of Hong Kong smallest lenders, dipped 8.9% after denying Tuesday that it was in deal talks.

South Korean Kospi Index lost 0.1% to 1,390. Korean Air declined 4.6% in heavy volume on hopes it may have to borrow between 800 billion won ($856.7 million) and one trillion won if it buys 28.4% of S-Oil. LG.Philips LCD closed up 1% after some volatility ahead of the fourth quarter results. Hyundai Motor finished 2% higher on hopes for an early settlement of a dispute with its labor union over bonus payments.

In Australia, the stock market finished flat, with afternoon weakness in resources and banks. The biggest miner in the world, BHP, fell 1.5%, with selling gaining pace in the final session. Rival Rio Tinto shed 1.4%. ANZ Bank lost 0.7% and National Australia Bank slipped 0.2%.


[R]6:30AM European shares were lower Tuesday on weak miners, oil producers.[/R]
European markets traded lower on Tuesday. In early trade, FTSE 100 in London shed 0.3% to 6,246.5, Frankfurt Xetra Dax was fractionally lower at 6,730.33, the CAC 40 in Paris was unchanged at 5,630.32.

Decliners

Xstrata shed 3% and Antofagasta lost 2.6%. Norsk Hydro, the Norwegian oil and aluminium producer, shed 1.1%. SGS, the Swiss raw materials quality controller, fell 1.1% in spite of reporting a better-than-expected 19% rise in 2006 net profit. UBS, the Swiss investment bank, downgraded the shares from buy to neutral. Oil and gas producers fell in line with crude prices. The benchmark US Nymex front month contract fell below $53 a barrel in early trade on Tuesday. Norway Statoil fell 1.5 %, while Spain’s Repsol eased 0.5%.

Advancers

Safran, aerospace group, gained 4.1% after reporting unexpectedly strong full-year sales and targeting strong growth in 2007. Beverage makers advanced after a number of upgrades in the sector. Heineken, brewer, gained 2.5% after Morgan Stanley raised its rating from equal weight to overweight. Inbev, the Belgian beermaker, rose 1.7% after Sanford C Bernstein raised its price target.

Oil and commodities

Oil prices hovered above $53 a barrel on Tuesday, under pressure from warm weather and ample supplies. In early trading in London on Tuesday, U.S. crude was 18 cents higher at $53.17, while Brent futures gained 39 cents to $53.51.

Gold declined in London on speculation of increased investor sales because of declines in commodities. Gold for immediate delivery dropped 90 cents to $625.80 an ounce while copper gained on, erasing an earlier decline. Copper for delivery in three months on the LME gained $10, or 0.2%, to $5,640 a metric ton.

Currencies

The dollar traded at 120.48 yen in early trade, from 120.50 yen late yesterday, after reaching 120.74 yen, the strongest since Dec. 12, 2005. Against the euro, it was at $1.2898, from $1.2892 on Monday. The British pound traded at $1.9648, up from $1.9643.