Oil at Peak, Lowest Unemployment in 4 Yrs

123jump.com Staff
30 Nov, -0001
New York City

Treasury

U.S. AVERAGES

At the end market could not shake-off the inflation worries. The dip in the early trading on the news on stable unemployment level and higher than expected new jobs creations was overshadowed by the rising cost of employment.

The week end, higher oil prices and markets nearness to the four year-high levels have put several investors in profit taking mood.

In a hot IPO market, five companies priced shares raising $800 million. Baidu.com priced 4 million shares at $27 per share. The Chinese search engine company, in the first half of 2005, generated revenue of $14 million with profit of less than $2 million. The company at current stock valuation is worth close to $3.6 billion.

Investors could not shake off the fears of inflation amidst rising wages and rising oil and gasoline prices. For the last two weeks eleven refineries have experienced shut downs in the Gulf of Mexico and traders worry that the peak 4Q demand may not be met.

It was only a month ago that traders worried that the 3Q driving season will stretch the supply from the refineries. Of course, there was ample supply to meet the needs of the highway travelers.

The July employment grew and June employment was revised upwards however the hourly payroll cost rose by 0.4%.

During the trading tech stocks gained. Dell, Apple, and Microsoft traded higher. The large semi stocks gained in the session. Motorola, IBM, Intel, AMD and LSI participated in the brief rally.

ECONOMIC NEWS

Non-farm employment grew by 207,000 in July, and the unemployment rate was unchanged at 5.0 percent, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Over the month, payroll employment rose in many service-providing industries.

Both the number of unemployed persons, 7.5 million, and the unemployment
rate, 5.0 percent, were unchanged in July. A year earlier, the number of unemployed was 8.2 million and the jobless rate was 5.5 percent.

Over the month, the unemployment rates for most major worker groups—adult men (4.3 percent), adult women (4.7 percent), teenagers (16.1 percent), whites (4.3 percent), and Hispanics or Latinos (5.5 percent)--showed little or no change. The jobless rate for blacks declined from 10.3 to 9.5 percent over the month. The unemployment rate for Asians was 5.2 percent, not seasonally adjusted.

Average hourly earnings of production or non-supervisory workers on private non-farm payrolls rose by 6 cents in July to $16.13, seasonally adjusted. Average weekly earnings increased by 0.4 percent over the month to $543.58. Over the year, both average hourly and weekly earnings grew by 2.7 percent.


INTERNATIONAL MARKET NEWS

Asian-Pacific benchmarks closed lower, pressured by climbing crude-oil prices, weakness in U.S. markets and political uncertainty in Japan, referring to postal privatization. The Japanese Nikkei tumbled 1%, Hong Kong’s Hang Seng declined 0.4%, and South Korea’s Kospi slid 1.98%. Crude-oil ended up 52 cents at $61.38 a barrel on the NYME. The dollar was trading at 111.23 in Tokyo foreign exchange.

European markets were mixed in mid-day dealings on rising crude-oil prices, corporate earnings with Barclays and Michelin among the gainers, and on U.S. non-farm payroll data due later in the day. The German DAX 30 lost 0.3%, the French CAC 40 was flat, and the U.K.’s FTSE 100 rose 0.3% mainly on airline gains.

ENERGY, METALS AND CURRENCIES MARKETS

Crude-oil prices advanced for a sixth consecutive session on accelerating pace of the economy and expectations of increased fuel needs as a consequence. Light sweet crude for September delivery rose 93 cents to $62.31 a barrel on the NYMEX touching close to all-time intra-day high of $62.50 this week.

September gasoline and heating oil futures closed up 3.27 cents and 2.34 cents at $1.835 per gallon and $1.73 a gallon respectively.

Gold futures traded slightly up, while mining stocks declined after better-than-expected U.S. employment data were released and gave the U.S. dollar a boost, but lowered interest in metals markets. Gold for December delivery rose 40 cents to $444.10 per troy ounce on the NYMEX.

Silver for September delivery fell 3.2 cents to 47.22 per ounce. September copper contract declined 0.35 cents to $1.651 a pound.

The U.S. dollar advanced against the euro and the yen on positive jobs report. Against the euro the dollar stood at $1.2341, up from $1.2384. The greenback bought 112.05 yen, up from 111.23.

Gold declined slightly in Europe as traders awaited key U.S. payroll data. Spot gold was last traded at $437.75 per troy ounce, down from $438.00. Silver retreated to $7.19 per ounce, down from $7.24.

EARNINGS NEWS

Sequa, aerospace and auto parts industry supplier, posted 2Q net income of $1.14 a share, up from 48 cents a share in the year-earlier period on strong sales.

National Oilwell Varco, oil and gas drilling manufacturer, announced 2Q profit of 35 cents a share, up from 25 cents a share last year on more–than-doubled revenue. Apart from charges, earnings would have been 49 cents, topping analysts’ forecasts by 5 cents.

The Washington Post, newspapers publisher, posted 2Q net income of $8.16 a share, down from $8.82 a share in the year-ago period on strong revenue, missing analysts’ forecasts of $9.65 cents a share.

British Airways, U.K. carrier, reported 1Q doubled profit of 90 million pounds compared with 43 million pounds a year ago on increased passenger traffic, fuel surcharges and 8.3% higher revenue. The company posted pretax profit jump of 65%, beating estimates of 35%.

Cardinal Health, distributor of health-care products, posted 4Q net earnings of 66 cents a share, down vs. 90 cents gained in the same period in fiscal 2004 on quarterly revenue growth, missing analyst estimate of 89 cents a share.

Liberty Media, electronic retailing owner, announced 2Q loss was reduced to 4 cents a share, up from 11 cents a share for the same period last year, on increase in revenue.

Westwood One, radio and television stations services provider, posted 2Q net income of 25 cents a share, down vs. 26 cents a share in the year-earlier period on revenue growth, missing analysts’ forecasts of 27 cents a share.

Alliant Energy, electricity provider, posted 2Q loss from continuing operations of 8 cents per share, vs. income 30 cents per share in the same period last year, while analysts had seen earnings at 27 cents per share.

Allis-Chalmers Energy, drilling and oil field services provider, posted 2Q net income of 12 cents per share, vs. 5 cents per share in the same quarter a year earlier on strong revenue.

Pro-Pharmaceuticals, drug developer, posted a 2Q net loss of 6 cents per share, vs. a net loss of 6 cents per share for the same quarter last year.

Hovnanian Enterprises, single-family detached homes developer, said 3Q dollar value of net contracts rose 34.8%, while the number of net contracts jumped 16.6% compared with the same quarter a year ago. The sales value of contract backlog rose 55.7% and the number of homes in contract backlog climbed 33.3%.

ProspEx Resources, oil and gas company, posted 2Q earnings per share of C$0.03 for the quarter on strong 2Q net earnings compared with 2Q the prior year.

Century Casinos, casino operator, reported 2Q net earnings of 4 cents per share, down vs. 8 cents per share in the year-earlier quarter on revenue growth, missing analysts’ expectations of 8 cents per share

Dynatec, mining companies services operator, posted 2Q net earnings of C$0.012 per share, vs. C$0.007 per share in the year-ago comparable period on revenue growth.

Redwood Trust, real estate investment trust, reported 2Q earnings of $1.50 per share, vs. $1.74 per share in the same quarter a year earlier. Quarterly net interest income jumped to $53.2 million vs. $47.6 million in the year ago corresponding quarter.

Mills, real estate investment trust group, posted 2Q fund from operations of $1.01 a share, up vs. 94 cents a share in the same period last year despite falling revenue, matching analyst forecasts.

Chesapeake, a provider of paperboard and plastic packaging, announced it anticipates a 2Q loss ranging from 9 cents to 11 cents a share. The company also lowered its earnings outlook to between 80 cents and $1 a share.

CORPORATE NEWS

Newspaper giant Alex Spring AG agreed to buy broadcaster ProSiebenSat 1 Media from a consortium of U.S. private-equity investors for $3.01 billion. The deal will unite Germany’s leading newspaper and television companies.

The Justice Department is pursuing a criminal investigation of allegations that DaimlerChrysler AG's Mercedes unit paid bribes in at least a dozen countries and that senior executives may have been aware of the practice. The investigation came in following a civil inquiry by the SEC that disclosed late last year. Shares of the automaker ended at $49.51 in trading on the Big Board Thursday.

Delphi Corp. ((DPH)) is in discussions with former parent General Motors Corp. ((GM)) and the United Auto Workers about a comprehensive restructuring of Delphi's unprofitable U.S. operations in order to avoid bankruptcy reorganization. The talks are reported to be very constructive and management hopes to restructure out of court. The auto parts maker added that it has drawn $1.5 billion from a $1.8 billion credit facility related to the restructuring talks.


OTHER NEWS

The People’s Bank of China announced in its second quarter report that it will increase flexibility in its exchange rate at an appropriate time, based on market developments, economic and financial trends. Since the revaluation reform of July 21, the central bank has allowed the yuan to rise only slightly only.

A parliamentary committee approved to privatize Japan’s postal savings system and create the world’s largest bank. The package, which is in the center of a severe political dispute, will go to the upper house full chamber which is expected to vote on the measures on Monday.