Oil Runs to $60

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

President Bush, a day after sending Congress a $2.9 trillion budget, urged lawmakers to resist raising taxes and to address the unsustainable growth in entitlement programs by restraining spending. But, the President failed to explain what is he dong to lower defense spending and government borrowing. Asia finished higher on tech stocks, Europe gained boosted by solid gains in the health-care sector. Crude oil rose as freezing cold covered the eastern half of the U.S. Gold inched higher.

[R]4:00PM NY; 10:00PM Frankfurt; 2:30AM Mumbai[/R]
Market averages closed higher in the US, Europe and Japan. Tech stocks weakness dragged mild rally in Nasdaq stocks.

Yield on 10-year bond closed at 4.765% and the 30-year bond closed at 4.868%.

Gold gained $2.20 to close at $658.30 a troy ounce, silver advanced 10.5 cents to end at $13.665 a troy ounce and copper decreased $4.50 to close at $5313.50 per metric ton.

Oil gained 32 cents to close at $59.060 a barrel and heating oil advanced 1.94 cents to finish at 169.500 cents a gallon. Natural gas increased 1 cent to close at $7.644 per MMBtu. Gasoline went up 1.710 cents to end at 157.700 cents a gallon.

Asian markets closed a little higher as Japanese tech stocks advanced and some regional share indexes touched intraday records. The advancers were led by Taiwan with a gain of 1.19%, Hong Kong with an increase of 0.98% and South Korea with an advance of 0.75%. The decliners were Indonesia with a decline of 0.41%, Philippines with a decrease of 0.30% and India with a loss of 0.26%. Australia gained 0.75% where Australian-listed shares of BHP Billiton rose 1%, tracking gains in copper and zinc prices.

European markets closed higher boosted by solid gains in the health-care sector. The advancers were led by Spain with an increase of 0.59%, Belgium with an advance of 0.57% and U.K. with a gain of 0.45%. The decliners were Italy with a decrease of 0.19% and France with a loss of 0.08%.

Latin America markets ended higher with Mexico''s markets moving higher after a national holiday yesterday. The advancers were Argentina with a gain of 1.18%, Mexico with an advance of 0.44% and Brazil with an increase of 0.11%. There were no decliners. Canada gained 0.20% as a pullback in energy and tech stocks muted gains in materials and financials.

[R]2:30PM NY, U.S. Market Movers[/R]
Avon Products ((AVN)) reported a slight gain in fourth-quarter profit, helped by strength in its beauty business, as its restructuring took hold. Shares of Avon gained more than 10% at one point during touching $38.37, its highest level in more than a year. The New York-based seller of cosmetics, jewelry and said that bits net income increased to $184.1 million, or 41 cents per share, compared with $183.2 million, or 40 cents, earned in the final three months a year earlier. Quarterly revenue rose 9% to about $2.62 billion, including nearly $2.6 billion in net sales.

Benchmark Electronics ((BHE)) said that its fourth-quarter profit climbed as revenue grew. The company earned $28.3 million, or 43 cents per share, up 15% from $24.7 million, or 38 cents per share, during the same period in the previous year. Revenue climbed 18% to $737.3 million from $625.4 million a year ago.

Celanese ((CE)) said its fourth-quarter profit fell 56% on a higher tax rate and comparisons to a prior-year quarter that included a large one-time gain. Net income declined to $77 million, or 45 cents per share, compared with $175 million, or $1.02 per share in the year-ago period. Adjusted earnings increased to 77 cents per share from 60 cents per share. Sales rose 8% to $1.66 billion from $6.03 billion in the year-ago.

Shares of Hoku Scientific ((HOKU)) jumped 9.8% after the company said the value of its contract with Solar-Fabrik AG was increased. In early-December, Hoku said it expected to generate $120 million to $140 million from an agreement to supply polysilicon chunks to Solar-Fabrik. The company said the amount of the planned contract was raised to $175 million.

International Securities Exchange ((ISE)) said robust trading on the electronic marketplace pushed fourth-quarter profit up 51%.Profit for the latest quarter rose to $15.1 million, or 38 cents per share, from $10 million, or 26 cents per share, a year earlier. Total revenue increased 22% to $53.3 million from $43.6 million in the same quarter a year ago. Shares rose 7.8%.

Littelfuse Inc. ((LFUS)) said its fourth-quarter profit slipped from last year due to hefty charges. Net income for the quarter was $4.6 million, or 21 cents per share, down from $5.2 million, or 23 cents per share, for the fourth-quarter 2005. Excluding certain expenses and charges, earnings were 25 cents per share. Revenue for the quarter was $127.8 million, up from $115.4 million in the year ago period.

National Oilwell Varco ((NOV)) said strong demand for its rig technology products and oil field supplies powered a steep rise in fourth-quarter profit. Net income more than doubled to $239.2 million, or $1.35 per share, from $101.6 million, or 58 cents per share, a year earlier. Revenue climbed 42% to $2.08 billion from $1.38 billion a year ago.

Nuance Communications ((NUAN)) Shares of Nuance Communications, Inc. jumped as the speech and imaging software company reported a 75% rise in revenue for the first quarter. Nuance reported $132.4 million in revenue. The company reduced its losses to $1.4 million, or a penny per share.

Anadarko Petroleum Corp. ((APC)), oil and gas company, reported fourth-quarter earnings of $1.92 billion, or $4.13 per share, up from a year-ago equivalent profit of $875 million, or $1.87 per share. The latest results included a number of items, including a gain of $1.77 billion, or $3.80 per share, from the sale of the company''s Canadian unit. On a continuing operations basis, the company earned $186 million, or 40 cents per share. Revenue climbed to $3.12 billion compared to $1.92 billion in the same period a year earlier.

Art Technology Group Inc. ((ARTG)), E-commerce software provider, said that its fourth-quarter net earnings increased to $5.06 million, or 4 cents per share, compared with $3.18 million, or 3 cents per share, in the year-ago period. Revenue climbed to $32.2 million versus $25.7 million in the same period a year earlier. Shares fall 17.2%.

[R]1:00PM European markets closed mixed after touching multi-year highs.[/R]
European stocks hit multi-year highs on Tuesday, boosted by solid gains in the health-care sector. Fresenius Medical Care climbed 3.9% in Frankfurt as investors mulled the revenue implications of potential changes to dialysis treatment payments in the U.S. Property stocks also contributed to the upside move, with shares in France''s Unibail up 2.6%, Italy''s Beni Stabili up 1.8% and Liberty International higher by 1.2.%. Among other advancing stocks, insurance group Aviva''s shares rose 1.8% after the company said its 2006 total sales rose 22% The U.K.''s FTSE 100 closed up 0.5 % at 6,346.30, after touching a new six-year high earlier in the day, lifted by gains for supermarkets Tesco and William Morrison. Lloyds TSB also helped, rising 1.4% after Credit Suisse raised its rating on the stock. U.K. oil giant BP limited the upward move with a drop of 1.2% on earnings news. The Dutch AEX index touched its highest level in just under five-years at 509.35. It closed up 0.2% at 507.40. The German DAX Xetra 30 closed flat at 6,875.70. The French CAC-40 index slipped 0.1% at 5676.78, reversing from a 51/2-year high.

Crude oil prices traded above $59 a barrel on expectations of increased fuel demand, due to colder winter weather. Light, sweet crude March delivery rose 46 cents to $59.20 a barrel. Heating oil added 2 cents to $1.7001 a gallon, while gasoline rose 2 cents to $1.5774. Natural gas fell 8 cents to $7.55 per 1,000 cubic feet. London Brent rose 75 cents to $58.85. The U.S. dollar traded mixed against its major currency rivals. The euro was quoted at $1.2946, up from $1.2931. The dollar bought 120.36 yen, up from 120.33. The British pound was quoted at $1.9678, up from $1.9602. European gold prices advanced. In London, gold traded at $652.03 per troy ounce, up from $648.55. In Zurich, the precious metal traded at $649.60 per ounce, up from $648.55. Silver closed at $13.57, up from $13.48.


[R]11:30AM Market averages turned lower, led by tech stocks.[/R]
U.S. stocks turned to the downside, reflecting rallying oil prices and weakness in the tech sector ahead of earnings release from Cisco Systems ((CSCO)) after the close. The Dow was dragged down by Hewlett-Packard ((HPQ)) which lost 1% on news that Eastman Kodak ((EK)) is introducing higher-priced printers with lower-priced cartridges. Apple ((APPL)) declined 0.6% after Wal-Mart ((WMT)) sad it was testing a download service. National Semiconductor ((NSM)) dropped 4.4% after the company projected a 14% to 15% drop in Q3 revenue, due to lower shipments. The downside move was limited by gains for blue chips Alcoa ((AA)), Dupont ((DD)) and Coca Cola ((KO)). Hewlett-Packard Co.

In earnings news, McClatchy Co. newspaper publisher, rose 2.4% after the company posted a Q4 loss following the sale of its largest newspaper, the Minneapolis Star Tribune. The company''s earnings before one-time expenses topped expectations. Las Vegas Sands Corp. ((LVS)) fell 5.5% after the casino company''s Q4 profit rose 3.3% amid increased revenue in Macau and Las Vegas. In late morning trading, the Dow fell 6.16, or 0.05%, to 12,655.58. The Standard & Poor''s 500 index fell 1.14, or 0.08%, to 1,445.85, and the Nasdaq composite index fell 10.27, or 0.42%, to 2,460.33. Bond prices fell while investors waited for the Fed officials'' remarks, with the yield on the benchmark 10-year Treasury note rising to 4.82% from 4.81% late Monday.


[R]9:45AM Market opened slightly higher. Rising oil boosted energy stocks[/R]
Wall Street opened slightly higher, with investors awaiting speeches by top Fed Reserve officials. An increase by the oil price provided some boost to energy stocks like Exxon Mobil ((XOM)) and Chevron Corp. ((CVX)). Anadarko Petroleum ((APC)) also advanced on news that its Q4 profit more than doubled. However, shares of BP ((BP)) dropped 1% after the oil giant reported a 22% profit drop and warned of lower future production. The Dow Jones Industrial average was supported by gains for Alcoa ((AA), Intel ((INTC)), and Coca Cola ((KO)). The blue-chip stock Wal-Mart ((WMT)) also provided a lift after the retailer announced that it is testing a possible video download service.

Elsewhere, Bankrate ((RATE)) rose 11% after posting 50% profit jump in Q4 on robust advertising on its Web sites. International Securities Exchange ((ISE)), the largest U.S. equity options market, reported 51% profit increase in Q4, helped by robust trading on the electronic marketplace. The stock climbed 9% in early trading. In merger-and-acquisition news, Mortgage insurance provider MGIC Investment Corp. ((MTG)) agreed to buy rival Radian Group Inc. for $4.9 billion in stock to form a mortgage and credit risk insurance company with total assets of nearly $15 billion. MGIC Investment shares jumped 10%. Equity Office Properties Trust ((EOP)) rose 1% after the real estate investment trust approved an improved bid for the company from Blackstone Group, valued at $55.50 a share cash, or about $39 billion. In the first hour of trading, the Dow rose 11.30, or 0.09%, to 12,673.04. The Standard & Poor''s 500 index rose 2.85, or 0.20%, at 1,449.84, and the Nasdaq composite index added 5.96, or 0.24%, to 2,476.56. Bonds fell, with the yield on the benchmark 10-year Treasury note rose to 4.82% from 4.81% late Monday.


[R]9:30AM NY-2:30PM London The FTSE 100 advanced on bid speculation.[/R]
The UK market was trading higher on Tuesday. By mid-day, the FTSE 100 was trading 25.4 points, or 0.56%, higher at 6,343.3. Supermarket groups were again in favor, with Tesco and William Morrison leading the advance as the market awaits further bid developments at J Sainsbury. Reportedly, private equity firm Cinven is in talks with Texas Pacific Group on a possible bid for the supermarket chain. Morrison rose 2.7%, while Tesco gained 2.5%. UBS also upgraded both Tesco and William Morrison. Lloyds TSB was also 1.6% higher on positive broker comment. Credit Suisse raised the rating on the bank from neutral to outperform. Bid talk also lifted Cable & Wireless, 2.3% higher, as reports suggest that Deutsche Telekom was considering a move for the UK group. The record defense budget that President George Bush requested from Congress boosted BAE Systems 3.2% higher. Aviva was another advancer up 0.3% on 25% growth in life and pensions sales in the UK.

Decliners

There were few decliners on the market, led by BP. The oil company was forced to cut its growth expectations for the next few years on weak results. BP forecasts production of more than 4.0 million barrels by 2009 and more than 4.3 million barrels of oil equivalent per day by 2012. The stock dipped 1.6%. Royal Dutch Shell followed suit and also declined 0.3%.


[R]9:00AM Market futures pointed slightly higher ahead of Fed officials’ comment.[/R]
U.S. stock futures pointed to a moderately higher opening on strong results from Tyco and corporate news from Wal-Mart. Investors also awaited comments from top Federal Reserve officials for clues about the outlook for U.S. interest rates.

Wal-Mart ((WMT)) said it was launching a test version of a video download service, which will include more than 3,000 movies and TV titles from major Hollywood studios and TV networks. The service will compete with Apple Inc.''s ((AAPL)) download service. In earnings news, Tyco International ((TYC)) reported Q1 earnings rise of 43%, citing increased demand for its electronics and fire and security technology. Excluding non-recurring items, earnings would have topped analyst forecasts. Shares of the company gained 1.3% in pre-open. Duke Energy ((DUK)) reported Q4 earnings decline, but results excluding special items topped expectations. Cisco Systems ((CSCO)) which is due to report quarterly results after the close gained 1.1% in pre-open trading.

Among other pre-market highlights, Toyota Motor ((TM)) reported a 7% profit rise in Q4. Shares in BP ((BP)) fell 1.3% in pre-market trading after the oil giant reported a 22% profit drop and warned of future production decrease. In other corporate news, International Business Machines ((IBM)) inched up in pre-market trading. Late Monday the company said it sold its 3.5% stake in Lenovo for $123 million, selling its shares at roughly a 7% discount. S&P 500 futures edged up 1.30 points at 1,455.00 and Nasdaq 100 futures rose 3.50 points at 1,809.00. Dow industrial futures improved 12 points to 12,715.


[R]8:30AM NY-7:30PM Mumbai Sensex declines dragged by large-caps.[/R]
The Sensex on BSE finished 37.71 points, or 0.26%, lower, at 14,515.90. The market-breadth was positive as 1,399 shares advanced on BSE, 1,271 declined and 48 remained unchanged. Of the 30 stocks in the Sensex, 18 declined, while the rest advanced. The turnover on BSE surged to Rs 6,084 crore, compared to Rs 4,719 crore on Monday, as three block deals of 23.14 lakh shares each in TCS were struck. On NSE, the turnover was Rs 9,840.6 crore, higher than Rs 9,185.62 crore on Monday.

Economic news

Higher Education Secretary R P Aggarwal hinted that the government is for a 100% foreign direct investment in higher education. The current Foreign Education Bill allows a 50% foreign direct investment in higher education.

India, Pakistan and Iran are one step closer to agree on terms to transfer and purchase gas in the region from Iran. The pipeline is expected to cost at least $7 billion to build and transport 60 million cubic meters of natural gas per day to India and Pakistan. Mr Deora, oil and petroleum minister of India said that final price for the gas purchase will be determined based on the formula agreed by three nations. The price formula, as recommended by independent consultants will be based on price for Japanese crude oil basket for six trailing months.

The BT Group, British telecom network, said on Tuesday that it would buy i2i Enterprise Pvt Ltd, an Indian internet communications company. The acquiring company, BT Telecom India, a subsidiary of BT Group, did not disclose purchase price.

Trading highlights

TCS was the most-active stock with a turnover of Rs 910 crore followed by Auto Industries and Shree Ashtavinayak.

Advancers

Reliance Energy led the advancers today, up 2.10% to Rs 560. Reliance Energy has shown interest in buying the power sector assets of Globeleq. The stock was also boosted by a contract to build a large power project in Haryana.

Ranbaxy gained 1.35% to Rs 420, after the company said it signed a new agreement for cooperation with GlaxoSmithKline for new drug development in the therapeutic areas of anti-infectives and medicines to treat metabolic disorders.

ICICI Bank gained 1.39% to Rs 960 and rebounded from low of Rs 946.

Decliners

Reliance Communications led the decliners, ending 5.13% lower to Rs 488.65. Reliance fell after five consecutive sessions of gains in which the stock advanced 18%. Reliance Communications also raised a huge $1 billion on Monday through a convertible bond issue.

Other decliners included Hindalco shedding 2% to Rs 174.50, HDFC Bank shedding 1.58% to Rs 1,084 and and Maruti Udyog off 1.39% to Rs 950.

Bharti Airtel fell 1.67% to Rs 768.20 and Hero Honda lost 1.52% to Rs 719. Index heavy Reliance Industries was highly volatile in the session finishing unchanged at Rs 1,388, on a volume of 6.02 lakh share.




[R]8:00AM Toyota Motor reported record quarterly profit and sales.[/R]
Toyota ((TM)) reported a record 7.3% jump in Q4 profit on booming sales in North America and Europe that helped offset lower demand in the Japanese market. Toyota Motor Corp. posted group net profit of 426.8 billion yen ($3.6 billion), compared with 397.6 billion yen the same period last year. The auto maker reported solid sales growth of 15.2% to 6.15 trillion yen ($51.2 billion) from 5.33 trillion yen a year ago, boosted by strong demand for remodeled RAV 4 sport utility vehicle and Camry mid-sized sedan in North America, and the Yaris compact in Europe. Toyota said that vehicle production rose 9% to 2.09 million units in the quarter. Toyota, which also makes the Lexus luxury line, surpassed DaimlerChrysler AG as the No. 3 auto seller in the U.S. for the first time in 2006, according to data from automakers. The company kept its vehicle sales forecast for the fiscal year unchanged at 8.47 million vehicles. It also reiterated its forecasts for the full fiscal year through March, projecting earnings of 1.55 trillion yen ($12.9 billion) on 23.2 trillion yen ($193 billion) sales. Toyota shares closed up 1.8% in Tokyo at 7,960 yen ($66).


[R]7:30AMAsian markets ended mostly higher Tuesday on Japanese tech stocks.[/R]
Asian markets finished broadly higher on Tuesday. The Nikkei 225 Index in Japan closed 0.4% higher at 17,406.86. Tech stocks shone on Tuesday on strong quarterly results. Nikon, the fifth-largest digital camera maker in world, surged 5.4%, while Olympus, the fourth biggest, climbed 3.9%. Nikon raised its profit guidance for this fiscal year after reporting an 80% gain in its Q3 net income. Olympus also updated its profit projection by 13% and said its net income climbed 59%. Toyota Motor Corp. rose 1.8% before posting higher-than- estimated earnings as soon as the market closed. Sumco Corp. surged 8.9% after the company announced sales and pretax profit will increase 40% for this fiscal year.

Chinese Shanghai Composite closed 2.4% higher at 2,675.69. The market bounced back from a three-week low, on strength in lenders after Industrial Bank Co. announced earnings growth accelerated last year. Net profit surged 51% and the shares rallied 7.4%. Hong Kong Hang Seng Index ended 1% higher, up 199.58 points to 20,655.20. China Shipping Container Lines boosted the index, gaining 7.4''''%, adding to strong gains Monday after the company said it is in talks to buy a stake in an unnamed company. Lenovo Group Ltd. fell 7% before the shares were suspended on information on a stake sale. Australian S&P/ASX 200 advanced 0.8% to close at 5848.50, supported by gains in banks, telecoms and mining shares. The Reserve Bank of Australia is to meet today and will probably leave the overnight cash rate target at a six-year high of 6.25%. Miner BHP Billiton gained 1%, pacing gains in copper and zinc prices.


[R]6:30AM European stocks advanced on Tuesday on strength in financial stocks[/R]
European markets gained on Tuesday morning. Of the main indexes, the FTSE 100 in London climbed 0.4% to 6,342, Frankfurt Xetra Dax added 0.3% to 6,896.19 and the CAC 40 in Paris edged 0.2% higher to 5,691.01.

Advancers

Capitalia, the Italian bank, advanced 1.9% after reports that Banco Santander Central Hispano of Spain was considering raising its stake, which is now 2%, to help the Italian bank in its struggle to defend itself from the bid approach by Dutch ABN Amro. Santander added 0.5%, while ABN Amro gained 0.8%. Allied Irish Banks was another stock in the sector that climbed 1.1% after S&P Equity Research lifted its target price on the stock. The mining and metals sector traded up by around 0.6%, with Anglo American shares up 2.1% and SSAB Svenskt Stal shares up 3% in Sweden. SSAB was lifted by an upgrade to outperform by Credit Suisse. Renewable Energy Corp, the Norwegian solar power systems company, bounced back from some of the previous session’s heavy losses and added 4.6%.

Decliners

In earnings news, BP, the British oil company, reported Q4 loss of 12% on output decline and costs increases. The stock declined 1.9%, while Dutch telecom group KPN also shed 0.4% as its Q4 profit plunged 32%. Another underperformer was Kemira which fell 7.2% after posting unexpectedly small gains in Q4 operating profit.

Oil and gold

Oil recovered and was trading above $59 on Tuesday on hopes that the coldest weather of the U.S. winter would increas the demand for heating oil. U.S. crude oil was up 69 cents at $59.43 a barrel in early trade in London, while Brent crude gained 65 cents to $58.75. Gold advanced in London for a second day in a row on speculation a rebound in some commodities will raise the appeal of the metal as a hedge against inflation. Gold for immediate delivery climbed $4.40, or 0.7%, to $652.85 an ounce in early trade in London.

Currencies

The euro traded lower against the U.S. dollar on Tuesday. The 13-nation currency bought $1.2928 in morning European trading, slightly up from $1.2927 in New York late Monday. The British pound advanced to $1.9629 from $1.9596 as there are expectations that the Bank of England may consider hiking the interest rates at its meeting on Thursday. The dollar was up to 120.46 Japanese yen from 120.35 yen on Monday.