Dell up 6% on Management Change

Elena
01 Feb, 2007
New York City

Kevin Rollins announced he will quit as chief executive and founder Michael Dell will re-take control over the company in an attempt to regain eroding market share and to deal with an ongoing federal accounting investigation. Following the news, Dell was upgraded at Merrill Lynch and JPMorgan Securities.

[R]8:00AM Dell shares rose 5.7% on management change.[/R]
Dell ((DELL)) shares climbed 5.7% to $25.65 in pre-open trading as investors cheered a management shake-up at the company, expressing belief that the move will block negative sentiment and bring about a turnaround for the struggling computer maker. Kevin Rollins announced he will quit as chief executive and founder Michael Dell will re-take control over the company in an attempt to regain eroding market share and to deal with an ongoing federal accounting investigation. Dell's return overshadowed the PC maker''s warning that Q4 results would miss expectations. Investors anticipate more aggressive approach to lower cost structure, margin and sales improvements. Following the news, Dell was upgraded at Merrill Lynch, with the brokerage lifting its rating on the company to ‘Buy’ from ‘Neutral’. JPMorgan Securities also lifted rating on the company to ‘Neutral’ from ‘Underweight,’ citing the management change.


[R]7:30 AM Asian stocks finished higher on Thursday with Japan and HK rallying.[/R]
Asian markets ended higher on Thursday. Japanese Nikkei Index finished 0.8% higher at 17,520. Daiichi Sankyo rallied 5.1%, Asahi Kasei surged 4% and All Nippon Airways soared 4.3%. Nikko Cordial plummeted 16%, however, as investors remained worried about a potential delisting on abuse of venture capital by former executives.

The Hong Kong Hang Seng Index surged 1.6% to 20,430. Retail store supplier Li & Fung advanced 4.7%. Sun Hung Kai Properties rose 2.2%, while Sino Land gained 3.7%. South Korean Kospi Index added 1.7% to close at 1,383. Korean car makers advanced in line with the market despite new data showing weak car sales in January. Hyundai Motor gained 1.3% and Kia Motors climbed 2.2%.

The Shanghai Composite Index bucked the upward trend and shed 0.03% to close at 2,785 after falling 4.9% Wednesday. China Minsheng Banking rose 2.3% after plummeting 9.3% Wednesday and Citic Securities gained 2.3% after plunging 7.2% in the previous session. Daqin Railway, however, fell 5.2% and Hua Xia Bank dropped 2.7%.

Australian S&P/ASX 200 gained 0.7% to 5,814. Miner Rio Tinto advanced 2.2%, making the biggest contribution to strength in the market, ahead of its earnings report. Alumina jumped 5.6% after posting a 62% increase in full year profit. Adelaide Bank also rose 4.2% after posting its results. The index in Taiwan ended 0.02% higher at 7,702.


[R]7:00AM European markets advanced Thursday supported by financial shares.[/R]
European markets were higher on Thursday. By mid morning, the FTSE 100 in London climbed 1.1% to 6,269.3, Frankfurt Xetra Dax added 0.9% to 6,846.57, and the CAC 40 in Paris gained 1.1% to 5,671.68.

Advancers

Deutsche Bank, the biggest bank in Germany, posted a forecast-topping record full-year net profit of 6 billion euros on strong growth in investment banking and trading income. The stock rose just 0.1%. UBS, the Swiss investment bank, rose 1.2%, while Société Générale of France and BNP Paribas, whose price targets were upgraded on Wednesday by Oddo Securities, gained 1.4% and 1.6% respectively. Axa, the second-biggest insurer in Europe, gained 2.7% after reporting that full-year sales rose by nearly 10%.

Oil stocks were led by Royal Dutch Shell, which rose 2.1% in Amsterdam after reporting a forecast-topping 2.6% rise in underlying Q4 profits. European peers were buoyed by the news and Total of France rose 1.5%, while Austrian OMV added 2.3%.

Novo Nordisk, the Danish drugs company which posted strong earnings in the previous session, rose 2.8%. Novartis, the Swiss drugmaker, gained 1.1% after JPMorgan upgraded the stock from neutral to overweight and raised its price target.

Decliners

Henkel, the German household goods group, fell 3.9% after its 7.3 % rise in Q4 earnings fell short of expectations, while improvements in profit margins also disappointed.

Oil and metals

The front-month March crude oil contract on the New York Mercantile Exchange rose $1.17, or 2.1%, to $58.14 a barrel, the highest settlement of crude futures since Jan. 3. Gold for immediate delivery was little changed at $653.40 an ounce in early trade in London. Silver rose 4 cents to $13.565 an ounce today, palladium gained $1 to $339.50 an ounce and platinum advanced $3 to $1,183 an ounce.

Currencies

The dollar advanced against the euro, stopping a three-day drop, before a U.S. report expected to show manufacturing grew in January at the fastest pace in four months. The currency traded at $1.3010 versus the euro in early trade. in London, from $1.3032 late yesterday in New York. The dollar traded at 120.59 yen, from 120.70 yen. The pound was at 66.21 pence per euro in London from 66.31 pence late yesterday. It was also at $1.9645 versus the dollar from $1.9655.