Nasdaq Up 1.4%

123jump.com Staff
24 Jan, 2007
New York City

Market averages regained its climb as S&P 500 and other averages inched closer to a six-year high. A batch of positive earnings from several companies lifted the mood on the Wall Street. Oil rose on weekly inventory report however, natural gas fell. European markets gained on rising commodities prices and fall in tech stocks. Latin American stocks rose on higher earnings expectations.

[R]4:00PM NY – 10:00PM Frankfurt – 2:30 AM Mumbai[/R]
A fresh of positive earnings lifted stock averages. Corning, Sun Microsystems and Yahoo surprised but McDonald’s, AMD and Norfolk Southern disappointed investors. Crude oil prices retreat after government data showed an advance in crude and gasoline inventories and push the markets higher.

U.S. stocks were broadly higher Wednesday, lifting the Dow Jones Industrial Average to a record high, as the technology sector rallied on the back of positive news from Yahoo Inc. and Sun Microsystems Inc. Crude oil rises for second day as U.S doubles the petroleum reserve.

[R]Earnings Update[/R]

Corning Inc. ((GLW)), liquid-crystal-display glass for flat-screen televisions producer, said it swung to a fourth-quarter net profit of $646 million, or 41 cents per share, from a year-ago loss of $33 million, or 2 cents a share. Revenue for the quarter rose 14.1% to $1.37 billion from $1.2 billion a year ago. Excluding one-off items, Corning earned $488 million, or 31 cents per share in the quarter.

First Cash Financial Services Inc. ((FCFS)), pawn store and check-cashing company, said that its fourth-quarter net profit increased by 25.5% to $9.7 million, or 30 cents per share, compared with $7.7 million, or 23 cents per share a year ago. Revenue jumped 46.6% to $88.2 million, with same-store revenue rising 9%.

SAP AG ((SAP)), business software provider, said that the 30 million euro ($39 million) restatement of its third-quarter license revenue was a bookkeeping issue that would not impact cash flow at the firm. The restatement was due to a new contract with a U.S. customer that was undergoing a major restructure. SAP earned euro799 million (US$1.04 billion), up from euro619 in the same period a year earlier. Software sales rose 7% to euro1.26 billion (US$1.64 billion).

Allegheny Technologies Inc. ((ATI)), steel maker, reported fourth-quarter earnings of $167.1 million, or $1.63 per share, compared with a year-ago profit of $118.8 million, or $1.17 per share. Last year's results included a gain of $20.9 million, or 21 cents per share. Revenue jumped 56% to $1.4 billion versus $894.4 million in the same period a year earlier.

Yahoo Inc. ((YHOO)), Internet services provider, reported a 61% dip in profits on a 13% gain in sales. Yahoo said Tuesday that it earned $268.7 million, or 19 cents per share, during the final three months of 2006, traditionally the peak season for Web sites like Yahoo that depend on advertising for most of their revenue. Yahoo ended 2006 on the upswing, with fourth-quarter revenue of $1.7 billion, a 13 percent increase from $1.5 billion in the prior year.

ConocoPhillips ((COP)), oil company, said that its fourth-quarter earnings declined to $3.2 billion, or $1.91 per share, compared with a year-ago profit of $3.68 billion, or $2.61 per share. The latest results reflect a reduction of 17 cents per share related to previously disclosed impairments. On a continuing operations basis, the company earned $3.78 billion, or $2.69 per share, in the year-ago period. Revenue decreased to $41.5 billion versus $51.3 billion last year.

TD Banknorth Inc. ((BNK)), financial services company, said that its fourth-quarter net income increased by 50% to $83.4 million, or 36 cents per share, compared with $55.6 million, or 32 cents per share a year earlier. The company said quarterly total revenue jumped 40% to $424 million. The company said adjusted earnings were $117.8 million, or 51 cents per share for the fourth quarter, compared with $108.1 million, or 62 cents per share in the year-ago period. Net interest income rose 21% to $295.1 million.

Piper Jaffray Cos. ((PJC)), investment bank, said it earned $20.6 million, or $1.15 per share, in the fourth quarter, up from $16.4 million, or 87 cents per share, in the same period a year ago. Earnings from continuing operations climbed to $1.49 per share, including a 73 cents benefit from a reduction in a litigation reserve. Revenue jumped 24% to $146.6 million from $127.8 million last year.

TCF Financial ((TCB)), financial services operator, said fourth-quarter net income fell 18% to $53.7 million, or 42 cents per share, from $65.5 million, or 50 cents per share in the year-ago period.

Vertrue Inc. ((VTRU)), Internet direct marketing services company, said that its second-quarter net earnings increased to $8.7 million, or 74 cents per share, compared with $7.66 million, or 66 cents per share, in the year-ago period. Revenue climbed to $178.6 million versus $160.1 million in the same period a year earlier.

EZCorp Inc. ((EZPW)), pawnshop operator, said that its first-quarter net earnings increased to $9.76 million, or 23 cents per share, compared with $6.76 million, or 17 cents per share, in the year-ago period. Revenue jumped to $91.7 million from $75.8 million in the first-quarter a year earlier.

Sun Microsystems Inc. ((SUNW)), computer server and software maker, reported a fiscal second-quarter profit of $126 million, or 3 cents per share versus a net loss of $223 million, or 7 cents per share, in the year-ago period. Revenue climbed 7% to $3.57 billion compared with $3.34 billion a year ago on better sales of server product lines. Sun received a $700 million investment from private equity firm Kohlberg Kravis Roberts.

[R]Global Market Update[/R]

Yield on 10-year bond closed at 4.811% and the 30-year bond closed at 4.908%.

Gold advanced $3.30 to close at $649.20 a troy ounce, silver gained 3.5 cents to end at $13.295 a troy ounce and copper increased 2.80 cents to close at 260.75 cents per pound.

Oil increased 25 cents to close at $55.290 a barrel and heating oil advanced 0.62 cents to finish at 158.250 cents a gallon. Natural gas lost 20.9 cents to close at $7.388 per MMBtu. Gasoline went up 1.39 cents to end at 146.120 cents a gallon.

Asian markets closed higher as some indexes hit another round of record closing highs. The advancers were led by South Korea with an increase of 1.47%, Philippines with an advance of 1.42% and Taiwan with a gain of 1.06%. The only decliner was Indonesia with a decrease of 0.16%. Australia advanced 0.61%.

European markets finished higher thanks to the oil and metals sectors, while investors shrugged off declines from technology companies SAP and STMicroelectronics. The advancers were led by U.K. with an increase of 1.40%, Spain with a gain of 1.20% and France with an advance of 1.13%. There were no decliners.

Latin America markets ended higher on expectations of strong corporate earnings reports. The advancers were led by Mexico with a gain of 1.69%, Brazil with an advance of 1.15% and Argentina with an advance of 0.74%. There were no decliners. Canada gained 0.87%.

Market movers Of the 10 stocks with the biggest gains in the S&P 500, six rose because of their earnings reports. Yahoo Inc. and Sun Microsystems Inc. revived confidence in technology companies after better-than-estimated earnings. Both of the companies helped the S&P 500 Information Technology Index snap a six-day decline. AT&T Inc. pushed the Dow Jones Industrial Average toward a record close after the telephone company's Cingular Wireless LLC unit added a record number of subscribers. Advanced Micro Devices Inc. had the sharpest decline in the S&P 500, sliding $1.39, or 7.9 percent, to $16.12.

[R]1:00PM European markets closed higher on oil and resource stocks.[/R]
European stocks closed in the positive, as strength in the oil and metals sectors offset declines from technology companies SAP and STMicroelectronics. Energy and resource stocks rallied on Wednesday, helped by gains from oil giant BP, up 1.4%, and miner Vedanta Resources, up 4.7%. Shares of computer-software maker SAP weighed on the tech sector with a decline of 4.4% in Frankfurt. Meanwhile, shares in STMicroelectronics lost 1.6% in Paris after the company reported disappointing Q4 operating profit and sales. Markets also benefited from gains from interest-rate sensitive stocks on speculations of further rate rises. Shares in Northern Rock rose 3.4%. Oberthur Card Systems rallied 6.3% in Paris after it said Q4 sales rose 15.4%.The oil-heavy U.K. FTSE 100 index rose 1.3% at 6,311.10. Among other indexes, the German DAX 30 increased 0.9% at 6,737.69 and the French CAC-40 rose 1.1% at 5,636.98.

Crude oil prices retreated after government data showed an advance in crude and gasoline inventories. Light, sweet crude March delivery fell $1.04 to $54 a barrel. Heating oil lost 2 cents to $1.5497 a gallon, while gasoline fell 2 cents to $1.4230. Natural gas slipped 22 cents to $7.376 per 1,000 cubic feet. London Brent dropped 95 cents to $54.15. The U.S. dollar was mixed against its major currency rivals. The euro was quoted at $1.2961, down from $1.3021. The dollar bought 121.06 yen, down from 121.64. The British pound was quoted at $1.9659, down from $1.9825. European gold prices declined. In London, gold traded at $641.40 per troy ounce, down from $645.12. In Zurich, the precious metal traded at $639.35 per ounce, down from $643.55. Silver closed at $13.06, down from $13.19.


[R]11:30AM Stocks extended gains. AT&T led telecoms higher[/R]
U.S. stocks continued to move higher. The Nasdaq rose more than 1%, as Yahoo ((YHOO)) said it would launch a new Web advertising system and Sun Microsystems ((SUNW)) struck a deal for future financing. AT&T Inc. ((T)) shares led telecommunications stocks higher, rising 4.2% after the company's Cingular Wireless reported surging growth. Among other outstanding movers in t he sector, Tellabs Inc. ((TLAB)) rose 2.5% and Verizon Communications ((VZ)) added 1.3%%.

The energy and health sectors were little moved by President Bush's State of the Union address, with Exxon Mobil ((XOM)) down 0.7% and Pfizer ((PFE)) rising 1.1%. Shares in McDonald's ((MCD)) fell 1.6% after the restaurant chain posted doubled profit in Q4 which met average estimates. Hershey Co. ((HSY)), chocolate and candy maker, fell 2.8% on earnings-related news. The company posted 10% profit drop in Q4 as sales fell.

Crude oil prices slipped $1 to $54.04 per barrel after government data showed an advance in crude, gasoline and distillate inventories last week. Renewable energy stocks showed notable weakness. Xethanol Corp. ((XNL)), an ethanol maker, fell 12%, while larger rival Archer Daniels Midland Co. ((ADM)) lost 2.5%. In late morning trading, the Dow Jones industrial average was up 58.33, or 0.47%at 12,592.13. The Standard & Poor's 500 index was up 7.36, or 0.52%, at 1,435.35 and the Nasdaq composite index was up 29.18, or 1.20%, at 2,460.59. Bonds rose, with the yield on the benchmark 10-year Treasury note falling to 4.80% from 4.81% late Tuesday.


[R]Crude oil and gasoline inventories advanced.[/R]
Government data released Wednesday showed that crude oil inventories edged further higher in the most recent week, adding to a substantial build recorded in the previous period. Meanwhile, gasoline and distillate stockpiles also rose again. The Department of Energy's Energy Information Administration said that crude oil inventories rose 700,000 barrels in the week ended January 19. Specifically, the measure climbed to 322.2 million barrels from the previous week's level of 321.5 million barrels. This followed an increase of 6.8 million barrels in the previous week, a move that reversed losses in the previous couple weeks. Oil inventories for the January 19 week were 0.5% lower than last year. Meanwhile, gasoline inventories showed a week-over-week increase of 4 million barrels. The added to a recent streak of gains, including a rise of 3.5 million barrels in the previous week. The level of gasoline inventories was 2% above last year. Distillate fuel oil also had an inventory increase during the week ended January 19. Stockpiles of these products, which include heating oil, edged up by 700,000 barrels. This added to an advance of 900,000 barrels recorded in the previous week.


[R]10:30AM NY-9:30PM Mumbai
The Sensex finishes with a gain on stronger large-caps.[/R]

The Sensex on BSE ended 69.22 points, or 0.49%, higher at 14,110.46. The market-breadth was positive in the morning but turned negative in late trading. For 1,345 shares that declined on BSE, 1,287 advanced and 49 were unchanged. Of the 30 stocks in the Sensex, 18 advanced, while the rest declined. The turnover on BSE was Rs 4,448, higher than Rs 4,055.48 crore on Tuesday. On NSE, the turnover was Rs 8,186.52 crore, compared to Rs 8,026.16 crore on Tuesday.

Economic news

TRAI, the telecom regulator in India reduced tariffs on Wednesday for national roaming on mobile networks by up to 56%. The new tariffs would come into force from February 15th, and would apply for the GSM and CDMA networks.

The government removed the ban on sugar exports that was imposed on July 4, last year. The country will have a sugar availability of about 280 lakh tonnes during the current season, which comes against the domestic annual consumption of 190-195 lakh tonnes.

Trading highlights

Tata Motors Ltd., the biggest truck maker in India, announced after trading hours on Tuesday, its Q3 profit advanced 12%, supported by currency gains. Tata Motors reported fiscal third quartr profit of Rs 513.17 crore, 11.5% rise from a year ago on sales growth of 37%.

Most-active stocks

Pyramid Saimira was the most-active stock with a turnover of Rs 257.55 crore followed by Kotak Bank and Reliance Communications.

Advancers

Tata Steel led the advancers, up 4% to Rs 483.20. Tata Steel announced today that its Singapore-based subsidiary NatSteel Asia increased its holding in three of NatSteel units.

L&T also surged nearly 3% to Rs 1,577, after securing a Rs 355 crore order. Larsen & Toubro also announced that it will invest Rs 500 crore over the next five years in a technology park in Gujarat. Maruti Udyog gained 1.5% to Rs 934, after it launched a diesel version of the Swift.

Banking stocks advanced. ICICI Bank gained 1% to Rs 975.10, and HDFC Bank increased 2.8% to Rs 1,060. On Tuesday, the ADR of HDFC Bank jumped 1.6% to $75.89, while the ADR of ICICI Bank rose 1.8% to $44.54. HDFC added 2.2% to Rs 1,643, ahead of the Q3 results, later today.

ONGC advanced 2.7% to Rs 915, on the surge in oil price on Tuesday. Hindalco was up 2.8% to Rs 169.65, following the recovery in global base metal prices. The company releases Q3 results tomorrow. Bharti Airtel gained 0.4% to Rs 692.

Reliance Industries edged 0.4% higher to Rs 1,367. Pyramid Saimira Theatre soared 16% to Rs 292.85 as it was the most-active stock on BSE. Kinetic Engineering surged nearly 15% to Rs 150.70, on reports that the company hopes for sales of Rs 180 crore in calendar 2007.

Decliners

Tata Motors declined 3.3% to Rs 918 and Hindustan Lever lost 3% to Rs 215.30. Cipla shed 2.2% to Rs 248. After trading hours on Tuesday, Cipla posted a 5.2% growth in net profit in Q3 of 2006, to Rs 184.38 crore, compared with Rs 175.31 crore in the same period last year.

Reliance Communications slipped 1% to Rs 436.65. The finance ministry has approved the proposed issue of $1.2 billion of Reliance Communications of ADR. Infosys lost 0.6% to Rs 2,221.


[R]9:45AM Market opened higher, led by the tech sector.[/R]
U.S. stocks opened higher on Wednesday after better-than-expected earnings reports from several major tech companies boosted investor confidence in the technology sector. Sun Microsystems ((SUNW)) rose 8.8% after the company reported its first quarterly profit in years as revenue rose. Yahoo ((YHOO)) jumped 6.6% after the Internet-search company's Q4 profit topped analyst estimates, despite the 61% decline. Shares in AT&T ((T)) was a notable gainer on the Dow, rising 2.2% after its wireless unit Cingular reported better-than-anticipated earnings. However, Advanced Micro Devices ((AMD)) limited gains for the sector, falling 7% in early trading, hurt by Wall Street downgrades. Another drag was software giant SAP ((SAP)) which dropped 4.5% due to a disappointing margin outlook.

In other corporate news, McDonald's Corp. ((MCD)), the world's largest fast-food chain, said Q4 profit more than doubled, thanks largely to the spinoff of the Mexican-style eatery Chipotle and strong sales in Europe. The restaurant company earned $1.2 billion, or $1 a share, up from $608.5 million, or 48 cents a share a year ago. McDonald's revenue climbed 11% to $5.6 billion. Quarterly results beat expectations of 61 cents per share and revenue of $5.7 billion.

Market also digested President Bush's State of the Union address in which he called for expanded health insurance coverage and a 20% reduction in the country's consumption of gasoline over the following 10 years. Renewable energy stocks, which had rallied before the speech, steeply dropped. Shares of Verasun Energy Corp. ((VSE)) fell 5%, Pacific Ethanol ((PEIX)) lost 4%, and Xethanol Corp. ((XNL)) fell 4.6%. In the first hour of trading, the Dow Jones industrial average was up 35.49, or 0.28%, at 12,569.29. The Standard & Poor's 500 index was up 4.00, or 0.28%, at 1,431.99 and the Nasdaq composite index was up 15.42, or 0.63%, at 2,446.83. Bonds rose, with the yield on the benchmark 10-year Treasury note falling to 4.80% from 4.81% late Tuesday.


[R]9:30AM NY-2:30PM London FTSE gains Wednesday on upbeat market sentiment.[/R]
The FTSE 100 in London gained 0.8% at 6,275.6, an increase of 48 points.

Advancers

Northern Rock was 2.5% higher on reports of a better-than-expected full year profit. Bradford & Bingley added 0.6%, and Barclays made gains of 0.6%, while HBOS was 1.2% higher.

Kazakhmys was the top advancers among miners after analysts at HSBC lifted the rating on the stock to neutral from underweight. Stronger metals prices on commodities markets brought the rest of the sector back into positive territory. Antofagasta was 1.6 % higher, Xstrata made gains of 2.5% and Rio Tinto was 2% higher.

Expectations of stronger demand for electricity and gas supported utilities. Drax, the electricity company, was 1.7% higher, Scottish & Southern Energy gained 1.3% and National Grid advanced 1.6%. BG Group added 2%. United Utilities, the water company based in the north west of England, climbed 2.4% after JP Morgan upped its rating on the stock to overweight from neutral .

JD Wetherspoon rose 2.7% after it posted a 5.5 % increase in same-store sales. Punch Taverns gained 0.7 % after it said the same-store sales in its core chain continued to rise.

Decliners

Chemists group Alliance Boots fell 0.8 % after Morgan Stanley reduced its rating on the stock to underweight from equalweight. Capita Group, the outsourcing company, lost 0.5 % after Deutsche Bank lowered its rating on the stock to hold from buy.

There were losses for BSkyB ahead of its Q2 subscriber numbers due next week. The company slipped 0.2 % on a potential mixed report from the pay TV broadcaster, which has suffered from slower growth.


[R]9:00AM Market futures were flat. Yahoo and Sun Micro advanced on earnings.[/R]
U.S. stock futures pointed to a flat market opening, with tech stocks ready for a better performance Wednesday, led by Yahoo Inc. and Sun Microsystems. On Tuesday, strong earnings reports from Texas Instruments ((TXN)) and United Technologies ((UTX)) helped generate positive mood in the sector. Yahoo ((YHOO)) rose 5.6% in pre-open trading, despite the 61% profit drop reported by the Internet search group. The company's shares gained on news that it would roll out new search ad technology, as well as expectations of improved revenue per page view. In addition, Goldman Sachs downgraded its shares, citing valuation. Shares in Yahoo's rival Google ((GOOG)) advanced 1.1% in pre-market trading.

Sun Microsystems ((SUNW)) rallied 8.8% in the pre-open, due to a better-than-forecast profit on 7% revenue group. Shares of mobile communications technology company RF Micro Devices ((RFMD)) rose 10.5% on strong quarterly results. However, not all tech stocks posted strength. Advanced Micro Devices ((AMD)) slipped 6.3% in the pre-open after the chipmaker said it swung to a loss in Q4 and provided a lower outlook.

Outside the tech sector, Dow component McDonald's ((MCD)) added 1% after it reported improved quarterly earnings, with earnings from continuing operations min line with expectations. Among companies due to release later today are Internet auction house eBay ((EBAY)) and microchip designer Qualcomm ((QCOM)). S&P 500 futures gained 1.30 points to 1,436.70, while futures for the technology-rich Nasdaq 100 futures climbed 8.00 points to 1,795.00. Dow industrial futures tacked on 8 points to 12,600.


[R]8:00AM Yahoo profit plunged 61%.[/R]
Yahoo Inc. ((YHOO)) said that its Q4 profit tumbled 61% from a year ago but exceeded analyst estimates. Yahoo reported net income drop of $269 million, or 19 cents a share, down from $683 million, or 46 cents a year earlier, when it had a $340 million gain from the sale of investments. The Internet bellwether said Q4 results were also hurt by considerably higher costs for employee stock options. Fourth-quarter profit was higher than the expected earnings of 13 cents a share.

The company said sales rose 13% to $1.7 billion on stronger demand for the company's display ads. Excluding expenses on Internet traffic, sales rose 15% to $1.23 billion, slightly above analyst expectations and in line with Yahoo's own forecast. Still, sales increase was the lowest reported in several years, due to a heightened competition in the online ad market from Google. Analysts expect the long-awaited features to help Yahoo better compete with its rival. Yahoo shares traded up 5.5% in after-hours trading, as the company said it would roll out new search ad technology next month, earlier than expected.


[R]7:30 AM Asian markets rallied Wednesday with Tokyo near six-year record.[/R]
Asian markets ended higher on Wednesday. Nikkei 225 Index in Japan closed up 0.6% at 17,507.40. Shares of Toyota gained 2% and Canon shares advanced 1.2%. Among domestic-related issues, Nippon Steel added 1.3% while consumer-focused lender Aiful put up 1.8%. Kawasaki Kisen Kaisha Ltd was up 7.7% and Mitsui OKS Lines Ltd rose 4%. The largest oil producer in Japan, Inpex Holdings advanced 2.4%.

Hong Kong Hang Seng Index advanced 0.7% to 20,912.23. The Hang Seng China Enterprises Index gained 0.9% to 10,033.59. Shares of China Mobile surged 3.8%, jumping sharply for a second day in a row after Merrill Lynch earlier raised its price target on the share. Ping An Insurance gained among mainland insurance companies, with shares up 2.5%.

Australian S&P/ASX 200 settled up 0.4% with Woodside Petroleum adding 1.2%. Singapore Straits Times Index edged up 0.6% and Weighted Price Index in Taiwan rose 0.8%. Malaysia Composite Index added 0.8%, while Thai SET index increased 0.9%. Indonesian Jakarta Composite Index was the only one to buck the trend, declining 0.1%. New Zealand NZSX-50 rose 0.1%.


[R]6:30 AM Europe was higher Wednesday on oil and banking stocks upmove.[/R]
European markets gained on Wednesday. In early trade, FTSE 100 in London climbed 0.6% to 6,262.4, Frankfurt Xetra Dax added 0.3% to 6,696.07, and the CAC 40 in Paris gained 0.5% to 5,605.1.

Advancers

Shares in HVB gained 5.8% and Bank Austria added 5.5 % after Unicredit, which owns 95 % in both businesses, announced it was to buy out the remaining shares in the two banks. Italian banks were higher following upgrades to the sector late on Tuesday by Morgan Stanley. Banca Monte dei Paschi di Siena edged 0.3% higher, while Capitalia edged up 0.5% after the broker raised its rating from underweight to equal weight.

Crude prices surged overnight after the US announced it would double the capacity of its emergency reserves stockpile. European oil producers all benefited. Total of France gained 1%, Cepsa of Spain notched up 1.9% and Statoil of Norway rose 2%. BP advanced 1.2% and miner Vedanta Resources gained 2%.

Decliners

SAP shares declined 5.4% after it announced that its 2007 operating margins would fall. The company posted Q4 profit and sales figures matching its warning from a few weeks ago, with net income up 29% and revenue up 7%.

Oil and gold

Crude oil for March delivery dropped 59 cents, or 1.1%, to $54.45 a barrel in after-hours electronic trading on the New York Mercantile Exchange, as a government report today may show commercial stockpiles advanced for a second week. It traded at $54.50 in early trade in London. Gold traded in London at $643.00 per troy ounce, down from $645.12 late Tuesday.

Currencies

The dollar was mostly higher against other major currencies in European trading Wednesday morning. The euro was at $1.3002, down from $1.3021 late Tuesday. The British pound was quoted at $1.9760, down from $1.9825. The dollar bought 121.44 Japanese yen, down from 121.64.