New Deals, Growing Service Sector, Lower Oil

123jump.com Staff
05 Feb, 2007
New York City

Survey on service industry reported higher than expected level of economic activity in the month of January. A similar survey in Europe reflected growing sector across the continent. Lower energy prices, higher wages and consumer willingness to dip in savings kept American retailing and construction sectors growing in the month of January. Las Vegas Sands reported 3.2% rise in earnings on 27% rise in sales. SEC approved Nasdaq to sell more services and raise listing fees.

[R]4:00PM NY; 10:00PM Frankfurt; 2:30AM Mumbai[/R]
Markets in the U.S. closed mixed. Bush administration proposes $2.9 trillion budget with higher defense spending and lower medical expenses. Tokyo market lost more than 1% on Nissan earnings results. Natural gas continued its climb in New York trading.

Yield on 10-year bond closed at 4.809% and the 30-year bond closed at 4.914%.

Gold gained $1.90 to close at $653.40 a troy ounce, silver advanced 15 cents to end at $13.525 a troy ounce and copper decreased $257 to close at $5318.00 per metric ton.

Oil lost 32 cents to close at $58.700 a barrel and heating oil declined 0.75 cents to finish at 167.650 cents a gallon. Natural gas increased 16.9 cents to close at $7.645 per MMBtu. Gasoline went down 1.170 cents to end at 156.120 cents a gallon.

Asian markets closed mixed after Japan closed lower as the Nissan Motor released disappointing results, pulling down auto sector and broader index. The advancers were led by India with a gain of 0.78%, Thailand with an increase of 0.57% and Philippines with an advance of 0.39%. The decliners were Japan with a loss of 1.15%, Indonesia with a decrease of 0.67% and Hong Kong with a decline of 0.53% and Australia closed lower 0.16%.

European markets finished little changed. With gains in the oil sector and increased profit outlook from Irish airline Ryanair offset by pressure from ad conglomerate Havas and utilities Endesa and E.On. The decliners were led by Germany with a loss of 0.2%, Netherlands with a decrease of 0.12% and Spain with a decline of 0.10%. The advancers were Italy with a gain of 0.23%, U.K. with an advance of 0.11% and France with an increase of 0.07%.

Latin America markets finished higher as oil prices moved higher. Stock markets in Mexico are closed for a national holiday. The advancer was Brazil with an advance of 0.62%, while Argentina lost 0.24%. Canada gained 0.29% with most sectors in positive territory, notably energy.

[R]2:30PM NY, U.S. Market Movers[/R]

Agilysys Inc. ((AGYS)), of information technology services, software and hardware provider, said that its fiscal third-quarter profit and revenue increased on growth in server and storage hardware sales. Agilysys earned $20 million, or 64 cents per share, up 31.6% from $15.2 million, or 49 cents per share, in the same period the previous year. Revenue climbed 9.9% to $585 million versus $532.2 million in the same period a year earlier.

B/E Aerospace Inc. ((BEAV)), aircraft cabin products maker, said that its fourth-quarter net income fell to $21.7 million, or 28 cents per share, from $62.1 million, or 96 cents per share, in the year-earlier period. Quarterly revenue jumped 44% to $321.6 million compared to $222.9 million in the same period a year earlier.

Cognizant Technology Solutions Corp. ((CTSH)), information technology service provider fourth-quarter profit rose above Wall Street's expectations as sales increased. The company said that its fourth-quarter earnings increased to $69.5 million, or 46 cents per share, up 21% from $57.7 million, or 39 cents per share, during the same period in the previous year. Revenue climbed 65% to $424.4 million from $256.9 million in a year-ago period. Stock traded 7% up.

Dell Inc. ((DELL)), Shares of the company traded higher after an analyst upgraded the stock, saying the computer maker can trim its budget and improve technology by buying other companies. Dell stock increased by 28 cents to $23.80.

Hewitt Associates Inc. ((HEW)), human-resource services provider, said that its first-quarter earnings declined to $30.1 million, or 27 cents per share, compared with a year-ago profit of $31.5 million, or 29 cents per share. The latest results included a pre-tax severance charge of $16 million and $6 million in higher compensation expense, according to the Lincolnshire, Ill., provider of human resources outsourcing and consulting services. Net revenue climbed 4% to $726.6 million versus $701 million a year earlier.

Longview Fibre Co. ((LFB)), Shares of Brookfield increased by 20 cents to $49.07 in midday trading on the New York Stock Exchange. Longview shares jumped $3.46 or 16.5%, to $24.47. Brookfield Asset Management plans to buy Longview Fibre Co. for $24.75 a share in a deal valued at $1.63 billion, based on 65.76 million outstanding shares.

Potlatch Corp. ((PCH)), real-estate investment trust that owns forestland, said that its fourth-quarter earnings increased to $44.1 million, or $1.13 per share, compared with a year-ago profit of $9.9 million, or 34 cents per share. The latest results included a gain of $24 million, or 62 cents per share, related to the company's share of the negotiated settlement of the softwood lumber trade dispute between the U.S. and Canada, as well as an income tax adjustment of $3.9 million, or 10 cents per share, stemming from an asset transfer. Revenue jumped to $390 million against $389.3 million a year earlier.

Novatel Wireless ((NVTL)), Shares of Novatel Wireless hit a 52-week high after it said fourth-quarter earnings and sales could top the company’s previous forecast. Novatel shares jumped 97 cents, or 8.6%, to $12.22 on the Nasdaq during morning trading. The company said that it expects net income to be within or above 2 cents to 4 cents per share, thanks to surging demand for its wireless communications cards.

SLM Corp. ((SLM)), Shares of SLM fell $4.33, or 9.3%, to $42.13 in afternoon trading on the New York Stock Exchange after President Bush's budget request included a proposal to cut lender subsidies by 0.5 percentage points, an amount one company said would increase the burden on taxpayers. Shares dipped $12.12, or 6.1% to $187.23.

Triad Hospitals Inc. ((TRI)), Shares of Triad jumped $6.48, or 15%, to $49.75 in afternoon trading on the New York Stock Exchange. Earlier, shares set a new 52-week high of $49.95, topping a previous high of $45.67 after the company agreed to be acquired for about $6.4 billion, including the assumption of $1.7 billion in debt.

British Airways ((BAB)) reported a 14% drop in quarterly earnings on the back of increased fuel charges, fog-related delays and the cost of heightened security requirements at London's Heathrow Airport.

NewMarket Corp. ((NEU)), developer of petroleum additives, said that its fourth-quarter net earnings declined to $4.5 million, or 26 cents per share, compared with $11.1 million, or 64 cents per share, in the year-ago period. Excluding special items, the company posted a per-share profit of 60 cents versus 46 cents. Revenue climbed to $306.2 million from $293.7 million in the same period a year earlier.

[R]1:00PM European markets closed flat.[/R]
European stocks finished little changed on Monday, as losses for ad conglomerate Havas and utilities Endesa and E.On offset the positive sentiment generated by gains in the oil sector and some airline stocks. Oil companies advanced as crude prices rose. Shares of BP gained 1.3% in the U.K and France's Total added 0.7%. BP was also upgraded at Goldman Sachs. Most airlines were lower.. British Airways fell 1.8%, while budget airlines Ryanair and easyJet gained 3% each. Shares in Ryanair surged after the company said its Q3 net income rose 30% raised its profit guidance. Meanwhile, shares of media company Havas slipped 3% in Paris after the company said late Friday that its revenue rose just 0.8% to 1.5 billion euros in 2006. In the utility sector, Endesa fell 2.5% in Madrid after German utility E.On made a final bid for the Spanish utility of 38.75 euros a share. The U.K. FTSE 100 index added 0.1%, the German DAX 30 declined 0.1%, and the French CAC-40 edged 0.1% higher.

Crude oil prices rose amid forecasts of colder winter weather. Light, sweet crude March delivery rose 52 cents to $59.54 a barrel. Heating oil added 2 cents to $1.7043 a gallon. Natural gas rose 30 cents to $7.775 per 1,000 cubic feet. London Brent rose 64 cents to $59.05. The U.S. dollar traded mixed against its major currency rivals. The euro was quoted at $1.2934, down from $1.2967. The dollar bought 120.30 yen, down from 121.07. The British pound was quoted at $1.9611, down from $1.9673. European gold prices gained ground. In London, gold traded at $650.30 per troy ounce, up from $644.75. In Zurich, the precious metal traded at $648.55 per ounce, up from $644.15. Silver closed at $13.48, up from $13.25.


[R]11:30AM Market averages showed lackluster performance.[/R]
Stock market averages traded near the flat line, reflecting robust growth in the service sector in January, a flurry of multibillion-dollar merger deals, as well as earnings news. The ISM index gained 59% suggesting continued economic growth. The Dow was supported by gains for Boeing ((BA)), up nearly 1% on news that UPS ordered 27 Boeing 767 freighters worth between $3.86 billion to $4.19 billion at list prices. Wal-Mart Stores ((WMT)) also provided support to the blue-chip average, rising by 1.3% on same-store sales increase. At the same time, Microsoft ((MSFT)) weighed on the tech-heavy Nasdaq, posting a decline of 1.5%. Micron Technology ((MU)) dropped 0.5% on brokerage downgrade to hold from buy. On a positive note, KLA-Tencor ((KLAC)) gained 2.1% although the semiconductor industry products maker's earnings fell short of analyst expectations.

Among earnings-inspired gainers, Cognizant Technology Solutions ((CTSH)) rose 7% after reporting better-than-expected Q4 profit. The information technology service provider earned 46 cents per share, up 21% from 39 cents last year on 65% sales increase. In corporate news, Lear Corp. ((LEA)) surged 14% after the auto-parts supplier said top shareholder Carl Icahn offered to buy all of the company's outstanding stock. In late morning trading, the Dow rose 6.65, or 0.05%, to 12,646.84. The Standard & Poor's 500 index was down 1.44, or 0.10% at 1,446.95, and the Nasdaq composite index fell 3.09, or 0.12%, to 2,472.79. Treasuries largely shrugged off the ISM numbers. Bonds rose, with the yield on the benchmark 10-year Treasury note down to 4.80 percent from 4.82% late Friday.

[R]Service sector grew faster in January.[/R]
Monday morning, the Institute for Supply Management released its report on business activity in the services sector in the month of January, showing that the pace of growth in the sector accelerated faster than economists had anticipated. The ISM said that its index of activity in the service sector rose to 59.0 in January from 56.7 in December, with a reading above 50 indicating growth in the sector. Economists had expected a much more modest increase to about 57.0. The faster pace of growth came in spite of a slowdown in the pace of new orders and employment growth, as the new orders index edged down to 55.4 in January from 55.6 in December while the employment index fell to 51.7 from 53.2. At the same time, the report showed a contraction in inventories, with the inventories index falling to 47.0 in January from 53.5 in December. This marks the first time in 24 months that there has been contraction in service sector inventories. The report also showed that the prices index fell to 55.2 in January from 59.7 in December, indicating a slowdown in the pace of price growth in the service sector. Last week, a separate report from the ISM showed that the manufacturing sector contracted in the month of January, as the index of activity in the sector fell to 49.3 from 51.4 in the previous month. Economists had expected the index to edge up to 51.5.


[R]9:45AM Market opened lower on lingering economic concerns.[/R]
Wall Street opened in the negative territory Monday, as investors turned to profit-taking and waited for a report on the service sector of the economy. An increase by the oil price also contributed to recent gains consolidation. Oil prices hovered round $60 a barrel. Dow component Wal-Mart ((WMT)) provided support, rising 1.1% after the retailer reported better-than-expected same-store sales. At the same time, the company also said that sales performance is on track to deliver the lowest growth rate in more than 25 years.

A flurry of deal news, the largest amount of merger activity since the beginning of 2007, also helped limit early losses. Herbalife ((HLF)) surged 21% after it received an acquisition offer of $2.7 billion from Whitney V L.P. and its affiliates. Triad Hospitals ((TRI)) jumped 15% in early trading after it accepted a takeover bid of $6.4 billion, including $1.7 billion of debt. In the financial sector, State Street Corp. ((STT)) dropped 4.6% after it agreed to buy Financial Services Corp. ((IFIN)) for about $4.5 billion in stock. Shares of Investors Financial jumped 29%.

On the earnings front, health benefits group Humana Inc. ((HUM)) traded up 1.1% after it reported Q4 doubled profit and lifted its full-year earnings outlook. In the tech sector, KLA-Tencor ((KLAC)) gained 2.8% after the semiconductor industry products maker reported disappointing quarterly earnings. The chip-maker booked a $370 million non-cash charge related to stock options it intentionally backdated. Micron Technology ((MU)) dropped after the company's stock was downgraded. Cognizant Technology Solutions ((CTSH)) rose 6% after the information technology service provider reported better-than-expected Q4 profit on sales growth. The company earned $69.5 million, or 46 cents per share, up 21 percent from $57.7 million, or 39 cents per share last year on 65% sales increase. In the first hour of trading, the Dow fell 7.21, or 0.06%, to 12,646.28. The Standard & Poor's 500 index was down 1.52, or 0.10%, to 1,446.87, and the Nasdaq composite index fell 1.56, or 0.06%, to 2,474.32.


[R]9:30AM The FTSE 100 in UK gained on Monday with Johnson Matthey surging.[/R]
The UK market advanced on Monday. By mid-day, the FTSE 100 gained 5.7 points to 6,316.6. The top performer on the market was platinum producer Johnson Matthey on an update from UBS, which raised its rating on the stock from neutral to buy, citing that Johnson Matthey was the stock in focus among chemicals. Property stocks Land Securities and Hammerson were higher after reports that the finance minister is about to relax the rules on REITs. Both companies were 0.5% higher. Man Group advanced 3.7% as it said its US-listing of its Man Financial brokerage was under way. BT gained 2.4% as Dresdner Kleinwort raised its rating on the stock from hold to buy. The leading stock among the mid-caps was Countrywide, up 6.3%, as it received a new bid approach. Shareholders rejected an offer from 3i only ten days ago.

Decliners

Wilson Bowden and British Land were the only decliners on the market. Wilson Bowden proposed an offer for Barratt Developments at 2.2 billion pounds and the bid was accepted. Wilson Bowden lost 1.99% and British land bucked the uptrend in property stocks and dipped 0.2%.


[R]9:00AM Market futures pointed lower ahead of key economic data.[/R]
U.S. stock markets looked poised for lower opening Monday, as investors tried to lock in profits after solid gains posted the previous week. The market awaited an economic report from the Institute of Supply Management, expected to show that the services sector is expanding at an increasing rate. Wal-Mart Stores ((WMT)) was a pre-market highlight as the world's biggest retailer warned that it will deliver the lowest annual same-store sales growth in more than 25 years after posting 2.2% rise in January same-store sales. At the same time, the results topped analyst predictions that sales in U.S. stores open for at least one year would rise annually by 1% to 2% in the five-week period, ending Feb. 2.

Several merger-and-acquisitions deal also attracted attention. In the financial sector, Investors Financial Services Corp. ((IFIN)) climbed 35% before the opening bell after the company agreed to be acquired by State Street Corp. ((STT)) for about $4.5 billion. In another deal, Triad Hospitals Inc. ((TRI)) accepted a takeover bid from private equity buyers in a deal worth $6.4 billion, including about $1.7 billion of debt. The stock jumped 15% in pre-market trading. Herbalife ((HLF)) said it received an acquisition offer of $2.7 billion from Whitney V L.P. and its affiliates. The offer represents a 14.8% premium to the Herbalife's closing share price Friday of $33.10. Company's shares traded up 19% in pre-open. Hanover Compressor ((HC)) and Universal Compressor ((UCO)) agreed to swap stock in a $3.8 billion deal. Hanover's stock rose 8%, while Universal Compressor gained nearly 5%. S&P 500 futures slipped 2.80 points at 1,450.30 and Nasdaq 100 futures dropped 3.00 points at 1,804.25. Dow industrial futures fell 21 points at 12,668.


[R]8:30AM NY-7:30PM Mumbai - Sensex rallies on the back of strength in telecom and auto stocks.[/R]
The Sensex on BSE ended the session on Monday 112.13 points, or 0.78%, higher at 14,515.90. The market-breadth was strong as mid-cap and small-cap companies also took part in the rally. For every three advancers, there were two decliners. As 1,529 shares advanced on BSE, 1,135 declined and 60 shares were unchanged. Of the 30 stocks in the Sensex, 21 advanced, while the rest declined. The turnover on BSE was Rs 4,691 crore, lower than Rs 5,433 crore on Friday. On NSE, the turnover amounted to Rs 9,185.62 crore, lower than Rs 10,257.56 crore on Friday.

Economic news

Indian Finance Minister P Chidambaram said earlier on Monday that India’s increased credit rating will be beneficial to foreign fund inflows. Investors hope that the finance ministry will pay special attention to agriculture and infrastructure in the budget.

Trading highlights

Shree Ashtavinayak was the most-active stock with a turnover of Rs 314.80 crore followed by Auto Industries and Reliance Communications.

New issue, First Source is oversubscribed 47 times according to baking sources.

Advancers

Reliance Communications led the advancers, surging 5% to Rs 515.75. Mobile services companies rallied today on the decision of the Telecom Regulatory Authority of India to reduce termination charges. Bharti Airtel also advanced 1% to Rs 779.40. Auto stocks rallied on investor expectations that in the upcoming budget excise and sales tax may be lowered on small cars. Largest auto maker Maruti Udyog gained 2% to Rs 965, while Tata Motors added 1% to Rs 920. Bajaj Auto advanced 1.7% to Rs 2,827 and Hero Honda edged 1.2% higher to Rs 724.90.

Strong demand for housing loans helped HDFC to gain 4%, to Rs 1,818 while Reliance energy surged 2.8% to Rs 549 on reports that it will bid for Globeleq, a British power investment company. Tata Steel advanced 1.7% to Rs 471. Index heavy Reliance Industries gained 1.3% to Rs 1,390 and The State Bank of India edged 1.2% to Rs 1,196 on the news that the company plans to raise $700 million by the end of this quarter. Indiabulls Financial Services surged 2.3% to Rs 452.25, as the company reported it was considering restructuring and separating its financial brokerage and consumer finance business to a separately listed company.

Decliners

The decline in base metal stocks on the London Metal Exchange brought metal shares down. Hindustan Zinc shed 5.7% to Rs 653.50, Sterlite Industries lost 6.6% to Rs 485.50 and Hindalco plunged nearly 3% to Rs 177.80. Wipro declined 1.3% to Rs 635.


[R]8:00AM State Street agreed to buy Investors Financial Services for $4.5 B.[/R]
State Street Corp. ((STT)) announced an agreement to buy Investors Financial Services Corp. ((IFIN)) in a deal worth about $4.5 billion in stock. In terms of the deal, Investors Financial shareholders will receive 0.906 shares of State Street common stock for each share held, based upon the closing price of State Street common stock on February 2. The average number of State Street common shares issued in the transaction will be 62 million. The transaction is expected to be dilutive to State Street's operating earnings in 2007, neutral to earnings in 2008 on an operating basis. Ii is also anticipated that the deal will boost earnings in 2008 on a cash basis and lift operating earnings in 2009, based on anticipated pre-tax cost savings of approximately $345 million to $365 million in the first two years following closing. State Street expects to take restructuring charges of between $625 million to $675 million. After the completion of the deal, State Street will possess more than $14 trillion in assets under custody.


[R]7:30AM Asian market finished mixed on Monday with Japan down on Nissan.[/R]
Asian markets finished mixed on Monday. The benchmark index Nikkei 225 Index in Japan finished 1.2% lower at 17,344.80. Nissan Motor slumped 8.4% after it reported a 23% decrease in Q3 net profit and reduced its full-year guidance. Toyota and Honda also declined 1.6% and 3.6% respectively. Inpex Holdings, the leading Japanese oil producer also shed 0.4%, but Nippon Oil, the largest refiner in Japan advanced 1.7%. Consumer-electronics company JVC gained on rumors that its parent firm Matsushita Electric Industrial is considering selling its stake in the JVC to a private-equity group.

In South Korea, the Kospi index edged up 0.3% to 1,417.95. Hyundai Motor declined 0.8% as its chairman was sentenced to three years in prison on fraud. In HK, the benchmark index Hang Seng Index finished 0.5% lower at 20,455.62 as traders took profits in China Mobile and HSBC. HSBC finished 0.6% lower, while China Mobile shed 0.3%. Apparel retailer, Esprit Holding bucked the trend and gained 3% after Citigroup and UBS lifted their target prices on the share. China Shanghai Composite continued its losing streak and dipped 2.3%, Australian S&P/ASX 200 shed 0.2%, while New Zealand NZSX-50 gained 0.1% and Taiwan Weighted Price Index ended 0.1% higher.


[R]6:30AM European markets traded flat on Monday on weakness in banks, autos.[/R]
European markets were flat on Monday. By mid morning, FTSE 100 in London was marginally 0.1% higher at 6,314.3, Frankfurt Xetra Dax dipped 0.2% to 6,874.6 and the CAC 40 in Paris was flat at 5,674.98.

Advancers

Irish airline company Ryanair surged 6.1% on an upbeat figures of Q3 results. The company posted a surprising 30% increase in Q3 net profit, contrary to analysts’ expectations. Oil companies gained as the price of crude oil was firm around $59 in early trading. French Total advanced 0.7%, while BP added more than 1.3%. Property groups were also stronger with Unibail of France leading the sector higher, rising 4.8% on an update to overweight from neutral by JP Morgan.

Decliners

The leading decliners were Credit Suisse, falling 1% and pulling the sector lower as ING lowered its recommendation on the stock and reduced its rating from buy to hold, which led to profit-profit. Faurecia, the largest maker of auto interior in Europe plunged 5.6% after it said its loss widened after writing down assets for a second year in a row. Faurecia led other major companies lower like Renault, down 1% and DaimlerChrysler AG, off 0.4%. Of the stocks in focus, Endesa lost 2.8% after German utility Eon submitted its renewed bid for acquiring the Spanish company, which was lower than Endesa closing price on Friday.

Oil and gold

Oil prices declined on Monday below $59 and were down 15 cents for light, sweet crude for March delivery at $58.87 a barrel on the New York Mercantile Exchange. Brent crude for March delivery on the ICE Futures exchange dipped 31 cents to $58.10 a barrel. A report of losses at metals-trading hedge fund Red Kite Management Ltd sent gold futures lower on Monday. Gold for immediate delivery fell $1.37 an ounce, or 0.2%, to $646.48.

Currencies

A decision on European interest rates later this week weighed on the euro and the 13-nation currency lost to the US dollar. The euro fetched $1.2940 in morning European trading, down from $1.2967 in New York late Friday. The British pound also declined to $1.9591 from $1.9673, while the dollar retreated to 120.74 Japanese yen from 121.07 yen.



[R]7:45AM State Street agreed to buy Investors Financial Services for $4.5 B.[/R]
State Street Corp. ((STT)) announced an agreement to buy Investors Financial Services Corp. ((IFIN)) in a deal worth about $4.5 billion in stock. In terms of the deal, Investors Financial shareholders will receive 0.906 shares of State Street common stock for each share held, based upon the closing price of State Street common stock on February 2. The average number of State Street common shares issued in the transaction will be 62 million. The transaction is expected to be dilutive to State Street's operating earnings in 2007, neutral to earnings in 2008 on an operating basis. Ii is also anticipated that the deal will boost earnings in 2008 on a cash basis and lift operating earnings in 2009, based on anticipated pre-tax cost savings of approximately $345 million to $365 million in the first two years following closing. State Street expects to take restructuring charges of between $625 million to $675 million. After the completion of the deal, State Street will possess more than $14 trillion in assets under custody.


[R]7:30AM Asian market finished mixed on Monday with Japan down on Nissan.[/R]
Asian markets finished mixed on Monday. The benchmark index Nikkei 225 Index in Japan finished 1.2% lower at 17,344.80. Nissan Motor slumped 8.4% after it reported a 23% decrease in Q3 net profit and reduced its full-year guidance. Toyota and Honda also declined 1.6% and 3.6% respectively. Inpex Holdings, the leading Japanese oil producer also shed 0.4%, but Nippon Oil, the largest refiner in Japan advanced 1.7%. Consumer-electronics company JVC gained on rumors that its parent firm Matsushita Electric Industrial is considering selling its stake in the JVC to a private-equity group.

In South Korea, the Kospi index edged up 0.3% to 1,417.95. Hyundai Motor declined 0.8% as its chairman was sentenced to three years in prison on fraud. In HK, the benchmark index Hang Seng Index finished 0.5% lower at 20,455.62 as traders took profits in China Mobile and HSBC. HSBC finished 0.6% lower, while China Mobile shed 0.3%. Apparel retailer, Esprit Holding bucked the trend and gained 3% after Citigroup and UBS lifted their target prices on the share. China Shanghai Composite continued its losing streak and dipped 2.3%, Australian S&P/ASX 200 shed 0.2%, while New Zealand NZSX-50 gained 0.1% and Taiwan Weighted Price Index ended 0.1% higher.


[R]6:30AM European markets traded flat on Monday on weakness in banks, autos.[/R]
European markets were flat on Monday. By mid morning, FTSE 100 in London was marginally 0.1% higher at 6,314.3, Frankfurt Xetra Dax dipped 0.2% to 6,874.6 and the CAC 40 in Paris was flat at 5,674.98.

Advancers

Irish airline company Ryanair surged 6.1% on an upbeat figures of Q3 results. The company posted a surprising 30% increase in Q3 net profit, contrary to analysts’ expectations. Oil companies gained as the price of crude oil was firm around $59 in early trading. French Total advanced 0.7%, while BP added more than 1.3%. Property groups were also stronger with Unibail of France leading the sector higher, rising 4.8% on an update to overweight from neutral by JP Morgan.

Decliners

The leading decliners were Credit Suisse, falling 1% and pulling the sector lower as ING lowered its recommendation on the stock and reduced its rating from buy to hold, which led to profit-profit. Faurecia, the largest maker of auto interior in Europe plunged 5.6% after it said its loss widened after writing down assets for a second year in a row. Faurecia led other major companies lower like Renault, down 1% and DaimlerChrysler AG, off 0.4%. Of the stocks in focus, Endesa lost 2.8% after German utility Eon submitted its renewed bid for acquiring the Spanish company, which was lower than Endesa closing price on Friday.

Oil and gold

Oil prices declined on Monday below $59 and were down 15 cents for light, sweet crude for March delivery at $58.87 a barrel on the New York Mercantile Exchange. Brent crude for March delivery on the ICE Futures exchange dipped 31 cents to $58.10 a barrel. A report of losses at metals-trading hedge fund Red Kite Management Ltd sent gold futures lower on Monday. Gold for immediate delivery fell $1.37 an ounce, or 0.2%, to $646.48.

Currencies

A decision on European interest rates later this week weighed on the euro and the 13-nation currency lost to the US dollar. The euro fetched $1.2940 in morning European trading, down from $1.2967 in New York late Friday. The British pound also declined to $1.9591 from $1.9673, while the dollar retreated to 120.74 Japanese yen from 121.07 yen.