Belief in Stronger Economic Gains

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

Traders have decided to focus on the positive news in the Fed

U.S. AVERAGES

The morning trading is driven by the belief that economy is on sound footings as reported by the Fed in yesterday’s rate hike report. The traders have relied on the fact that Fed states that the consumption and spending is growing while the inflation is contained.

In the first hour of trading tech, semiconductor, homebuilders and luxury retailers are trading higher while Internet, oil drillers, and restaurant stocks are trading lower.

Shares of Federated Department Stores are trading up by better than $2 on meeting the earnings estimates. Cicso is trading lower by 4% after reporting rise of 11% in revenue and 12% in earning, however, the company lowered the guidance for the next quarter.

AIG shares are up by better than $1. The company reported this morning earning of $1.52 vs. $1.21 estimates.

INTERNATIONAL MARKET NEWS

Asian-Pacific markets closed mostly up with the Nikkei among the leading gainers, rising 1.66% on optimism for the Japanese economy and strong gains on Wall Street after the Fed Reserve raised interest rates in line with expectations. In Tokyo all sectors gained with export-related issues in the lead. Among the other gainers in the regional markets, Hong Kong’s Hang Seng added 1.98% and South Korea’s Kospi rose 0.5%. The dollar was trading at the upper end of 111-yen.

European markets traded mostly higher at mid-day, supported by data of slowing inflation pace in the U.S., increased U.S. interest rates to 3.5%, bullish Japanese equity markets and upbeat results in the regional stocks from insurer Allianz and airline Lufthansa. The German DAX 30 gained 0.6%, the French CAC 40 added 0.4%, while London’s FTSE 100 lost 0.1%, hurt by stocks trading without rights to dividend payments. The euro and the pound gained 0.2% to trade at $1.2382 and $1.7904 respectively.

ENERGY, METALS AND CURRENCIES MARKETS

Global crude-oil prices rose ahead of the latest weekly U.S. inventory data. Light sweet crude for September delivery gained 54 cents to trade at $63.61 a barrel. London Brent advanced 75 cents to $62.73.

Gold futures rose on falling dollar in early European trading. Gold in London traded at $436.30 per troy ounce, up from $433.35. In Hong Kong gold gained 90 cents too close at $435.65. Silver opened at $6.98, up from $6.96.

Copper advanced on London Metal Exchange on stock speculation and supply concerns. Copper for delivery in three months rose $19 to $3,508 a ton. It has risen 11% this year and is the best performer on the LME.

The U.S. dollar was mostly lower against its major counterparts in the morning European trading. The euro was quoted at $1.2406, up from $1.2366. The yen stood at 110.90, down from 111.96. The British pound was traded at $1.7946, up from $1.7864.

EARNINGS NEWS

Cisco Systems’s 4Q net income rose 11.6% to 24 cents a share vs. 20 cents a share a year ago. Sales at the network equipment maker rose 11.1% to $6.58 billion.

Walt Disney Co. reported a 41% jump in earnings to 41 cents a share vs. 29 cents a share a year ago. Revenue was $7.72 billion vs. last year's $7.47 billion.

Panera Bread’s 2Q net earnings rose 61% to 33 cents a share vs. 21 cents a share, in the year-ago period, meeting analysts’ forecasts. The company expects a 3Q per-share profit of 34 - 35 cents, and 4Q net earnings of 46 - 47 cents a share. For 2005, Panera forecast net earnings of $1.57 - $1.59 a share and comparable sales growth of 6.2% - 7.8%

ECost.com, online discount retailer, reported a 2Q net loss of 54 cents a share vs. breakeven last year, citing cited additional operating costs and increased public company costs from its spinoff from PC Mall Inc., as well as a $6.5 million non-cash tax provision.

AIG Inc., posted 2Q profit of $1.53 per share vs. $1.01 per share last year, attributing the increase to large accounting gains booked during the quarter. Analysts expected the New York-based insurer to earn $1.21 per share during the period.

Allianz AG, insurer, said 2Q net income, adjusted for goodwill amortization, climbed 65% to 846 million euros, with revenue up 6.6% to 23.7 billion euros, beating the company’s expectations.

Lenovo Group, PC maker, said 4Q earnings rose 6% to HK$357 million ($46 million), with revenue up 234% to HK$19.6 billion.

Lufthansa, airline company, said it reversed to a 2Q profit of 116 million euros as operating profit rose 87.2% and revenue was up 4.3% on increased sales and better average fares.

CORPORATE NEWS

Yahoo is set to pay $1 billion and transfer its China operations to Alibaba.com Corp. to get in return 35% stake in the Chinese e-commerce company. According to the deal, Alibaba will maintain Yahoo brands for its search engine, but would gain access to its users and advertisers.

Tupperware Corp. ((TUP)) is near a deal to buy the direct-selling unit of Sara Lee Corp. ((SLE)) for between $500 million and $600 million, according to reports Wednesday.

Unocal Corp.'s shareholders vote today on Chevron Corp.'s $17.8 billion cash and stock acquisition offer. Cnooc Ltd., China's largest offshore oil producer, last week abandoned a months-long effort to buy Unocal, blaming the political atmosphere in Washington.

SES AMERICOM and Comcast Media Center, a unit of Comcast Cable revealed a joint marketing and services agreement that focuses on providing centralized solutions to support the cable industry delivery of advanced services offerings, such as HD, VOD, and VOIP.

Questerre Energy disclosed the receipt of regulatory approval for the re-entry program at the Beaver River Field in British Columbia. The company targets production from shallow Mattson sands and expects production from the wells in early 2006. Apace Petroleum Inc., the company's farm-in partner, intends to start the first phase of the program in September 2005. It would work on re-entry, perforation and testing of two existing wells, with two additional re-entries scheduled for the winter, and fracture stimulation, if required. Apace Petroleum would fund 100% of the costs of the initial program and would receive 50% interest in the wells for the Mattson and Questerre would retain the remaining 50% interest.

OTHER NEWS

China revealed for the first time that the U.S. dollar, the euro, the Japanese yen, and the Korean won are the main currencies, composing the basket of currencies, used to set the yuan’s value. The currencies of Singapore, Britain, Malaysia, Russia, Australia, Canada and Thailand are also considered in setting the yuan’s foreign-exchange rate.