$64 Oil

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

In a day of at least four merger deals, market

U.S. AVERAGES

The morning lift of averages quickly turned negative on the rise in oil price. Oil price advanced to $64 per barrel before trading lower. The fear of terrorist attack in Saudi Arabia and closure of the U.S. Embassy in Riyadh has oil traders worried.

In an otherwise quite day of summer market witnessed four merger deals news.

Kerr McGee agreed to sell its stake in North Sea oil to Dutch A P Moeller-Maersk and U.K. utility Centrica for $3.5 billion. The shares of Kerr McGee gained 4%.

Whirlpool has raised its offer price by $2 per share for Maytag for a total price of $2.6 billion. Yahoo is reported to be in talks with Alibab.com and acquire 35% stake at close to $1 billion. E*Trade is to acquire Harris Direct for $700 million in a fast consolidating on-line brokerage industry. Quest Diagnostics is to buy LabOne and enter risk assessment business for life insurance industry.

Home builder stocks are trading lower on the worries of rise in inflation and interest rate this week. The shares of Lennar, St. Joe, KB Homes, Toll Brothers and other are trading lower by 2% or more.

Nortel reported 2Q earnings of one cent after adjusting for restructuring and other one time charges on revenue of $2.86 billion dollar. The stock jumped 12%.

Recently listed IPO Baidu.com shares traded 12% higher adding to the 353% jump on Friday. The investors’ enthusiasm took the shares close to a high reached on Friday.

South African 100,000 miners strike for a pay increase of 10% or more. The mines of South Africa produce 15% of world’s gold and generate more than 7% of its GDP. Price of gold and shares of South African mines fell.

Oil trades at peak as several factors kept traders worried on the oil supply for the rest of the year.

ENERGY, METALS AND CURRENCIES MARKETS

The factors contributing to the today’s rise are include closure of the U.S. Embassy and Consulate in Saudi Arabia, resumption of Uranium enrichment processing by Iran, renewed attack by a minority rebel group in the remote province of India, and a minor fire at Sunoco’ refinery in Philadelphia.

Oil futures reached a new high of almost $64 a barrel in New York after U.S. shut embassy in Saudi Arabia on an unspecified threat. Light sweet crude for September delivery gained $1.63 at the close in New York to $63.94 a barrel. London Brent gained $1.31 to $62.38.

Gold traded lower together with the declining dollar. In London gold closed at $435.65 per troy ounce, down from $437.40. In Hong Kong the precious metal fell $1 to $437.05. Silver closed at $7.06 per ounce, down from $7.13.

The U.S. dollar lost ground against its chief counterparts. In mid-day New York trading the euro stood at $1.2359, up from $1.2340. The greenback changed hands at 111.84 yen; the sterling pound was quoted at $1.7858.

INTERNATIONAL MARKET NEWS

Asian-Pacific markets closed mixed with the Nikkei down 1% in morning trading ahead of parliamentary vote on privatization of Japan’s postal system, but as the reform proposal was rejected, the index rebounded and ended up 0.11%. Among the gainers in the regional markets, Australia’s All Ordinaries climbed 0.7%, China’s Shanghai Composite rose 0.9%. Averages in Taiwan and South Korea declined 1% and 0.3% respectively. The dollar was recently trading at 111.91 yen.

European stocks closed higher, boosted by soaring crude-oil prices and telecom equipment maker deal talk involving Nokia and Marconi. The German DAX 30 climbed 0.22%, the French CAC 40 added 0.44%, and the U.K.’s FTSE 100 rose 0.6%.

EARNINGS NEWS

Lamar Advertising, outdoor advertising company, announced that its 2Q net profit was up to 18 cents a share, from 7 cents a share in the year-ago period on revenue growth.

Conns, home-appliances retailer, announced that its 2Q same-store sales increased 12.1% with total sales for the period soaring to 21% on better performance in staffing levels, training and execution on the sales floor.

Standard Chartered, Asia-focused bank, posted 1Q net profit rise to $956 million, up from $727 million in the same period last year. The company raised its dividend to 18.94 cents from 17.06 cents and announced it's on course to achieve its goals for the year

Degussa, German specialty chemicals group, reported 2Q profit was slightly down to 96 million euros from 102 million euros in the same period last year despite sales growth and lower than the consensus forecast of 114 million euros.

Mobilcom, German telecom operator, posted 2Q net profit increase to 25.3 million euros, followed by strong growth in its wireless services unit and soaring sales, matching market estimate.

LabOne, laboratory services provider, announced that its 2Q net profit increased to 44 cents a share, up from 36 cents a share in the year-ago period on revenue growth.

El Paso, Houston energy provider, reversed to a 2Q loss of 38 cents a share, vs. net income of 1 cent, in the year-ago period on revenue decline, missing analyst estimate of 13 cents a share.

SciClone, life-threatening diseases therapeutics developer, reported a 2Q net loss of 4 cents a share, up from 6 cents a share in the same period last year on revenue growth.
WCI, luxury homes and mid- and high-rise residential towers builder, posted 2Q net income increased to $1.61 from 42 cents for the same period last year on strong revenue growth, beating analyst estimate of 75 cents per share.

Alcan, aluminum producer, posted 2Q income from continuing operations of 56 cents per common share, down from 77 cents per common share a year ago on decline in revenue, missing analysts’ expectation of 61cents per share.

Ventiv, commercial and clinical services provider, posted 2Q earnings of 32 cents per share, up from 19 cents per share for the year- earlier quarter on revenue growth, beating analyst estimate of 25 cents per share.

Tecumseh, compressors, small engines and power-train products producer, reported a second quarter loss of $6.63 per share, down from a profit of 22 cents per share in the same period last year on revenue decline, missing analysts’ forecasts of a loss of 19 cents per share.

Isis, drug producer, posted a 2Q net loss of 34 cents per share, up from a net loss of 47 cents per share for the same period last year on revenue growth, missing analysts’ expectations of 31 cents per share.

Amerco, trucks and trailers rental services provider, posted 1Q earnings of $1.53 a share, down vs. $1.98 a share for the same period last year despite revenue growth, due to pre-tax charge, missing analyst estimate of $1.67 a share.
Central European Distribution, beer, spirits, and wines distributor, posted earnings of 33 cents a share, up vs. 28 cents a share in the same period last year on sales growth, missing analyst estimate by a penny.


CORPORATE NEWS

Citigroup ((C)) plans an expansion program of bank acquisitions in growth markets such as Latin America, Asia and Eastern Europe once a regulatory ban stopping such big purchases is lifted next year. Management hopes to make more acquisitions such as that of KorAm Bank in South Korea, which Citigroup bought last year for $2.7 billion.

Yahoo Inc. ((YHOO)), online media company, is in advanced talks to acquire about 35% of Alibaba.com, China's biggest homegrown e-commerce company, for almost $1 billion. The deal would be the biggest investment by a foreign company in China's Internet industry.

Four Chinese airlines and Boeing Co. ((BA)) signed agreements for the sale of 42 Boeing 787 jets at a total price of $5.04 billion. Air China Ltd. and China Eastern Airlines Corp. will each buy 15 planes, Shanghai Airlines Co. will buy 9 planes, and Xiamen Airline Co. will buy 3 planes, according to reports.

Kerr-McGee ((KMG)) has reached deals to sell its North Sea operations for about $3.5 billion in cash. The transactions consist of the sale of interests in 4 non-operated fields and related exploratory acreage and facilities to Centrica plc for $566 million and the sale of all remaining North Sea assets to Maersk Olie og Gas AS for $2.95 billion. Kerr-McGee stated that the agreements also call for the acquirers to assume $182 million in carrying value of abandonment obligations and $175 million in derivative liabilities.

Hovnanian Enterprises ((HOV)) revealed that it has acquired the assets of privately-held homebuilder First Home Builders of Florida for an undisclosed cash amount. The company said the acquisition target is ranked first in the greater Fort Myers-Cape Coral market and had revenues of $308 million in 2004.

Nokia ((NOK)) could be the target of a Cisco ((CSCO)) bid, according to reports over the weekend. A Nokia spokeswoman said the company wouldn't comment on market rumors.

The Nasdaq Stock Market plans to withdraw from a system that links the nation's major stock markets, as part of a program to improve its technology and compete more directly against the New York Stock Exchange. The Nasdaq plans could be announced today and then sent to the SEC for approval. They already have been approved by Nasdaq's board.

RadioShack Corp. ((RSH)) said that it has executed an overnight share repurchase transaction of 20 million shares of the company's stock for about $500 million. The transaction was financed with about $300 million in short-term borrowing and $200 million in cash. About $200 million of the short-term borrowing is expected to be paid back through a sale-leaseback of the company's new corporate headquarters. The sale-leaseback transaction is scheduled to close this fall.

Italian dairy concern Parmalat SpA is suing JPMorgan Chase & Co. and UniCredito Italiano SpA for $5.4 billion in damages for the banks' role as co-lead managers of Parmalat bonds issued from 1994 through 2001.

OTHER NEWS

Saudi Prince Alwaleed sold a 40.1% stake of his holding in London’s Canary Wharf office complex. Trusts for the prince and his family had sold $28 million shares in Songbird’s Estates and based on this, the stake is valued at $71.2 million.

Japan's upper house of Parliament rejected a postal-system reform proposal that included creation of one of the world's largest banks, sending the government into a crisis. After the 125-108 defeat of his legislative package, Prime Minister Junichiro Koizumi called an emergency Cabinet meeting to dissolve Parliament and schedule a national election for Sept. 11.