Oil Hits New High But Market Rises

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

July retail sales gained 1.8% better than gains in June and 4-week average and last week

U.S. AVERAGES

Labor market and retail sales strength gave early boost to the averages at the opening which have been sustained at mid-day. Weakening rally in the last one hour still remains firm and broad.

Retail sales in July were $357 billion, up 1.8% from June and up 10.3% from one year ago. Excluding automobiles, retail sales were $271.4 billion, up 0.3% from last month and up 8.1% from July 2004.

Oil price briefly touched to $66 before settling at $65.45 per barrel. Paris based International Energy Agency confirmed the view expressed by the U.S. EIA that the world oil demand will grow slowly this year and daily demand for oil will rise by 1.6 million barrels less than previously thought.

Oil price is up 50% from a year ago and 40% since the beginning of the year.

Today’s rally is driven by rise in energy, mining, discount retailers and select bio-tech and REIT stocks. Refco, financial services firm prices 25 million shares at $22 and at close the share jumps 23%.

Whirlpool Corp. made an aggressive move to secure the deal to acquire rival Maytag Corp. by boosting its offer for a third time to $1.79 billion, or $21 a share. Including the assumption of $977 million of Maytag debt, the entire deal was valued at $2.7 billion.

Yahoo! ((YHOO)) said Thursday morning that it has agreed to take a 40% economic interest in Chinese e-commerce company Alibaba.com. Yahoo! said it would pay $1 billion in cash and add its China business to that of Alibaba, with the 2 firms working together to increase the Yahoo! brand in China. Yahoo! revealed that the deal gives it 35% of Alibaba's voting rights.

Target Corp reported 2Q earnings of 61 cents vs. 39 cents on a continuing operations basis. The last year’s earnings were at $1.53 when recently sold results of Marshall Field’s chain were included. Total revenue in the quarter rose 14% and same store sales grew 6.7%.

Advance Auto Parts Inc., auto parts retailer, reported 2Q net earnings of 90 cents a share vs. 70 cents a share, in the year-ago quarter, beating analysts’ estimate of earnings at 87 cents a share. Net sales rose to $1.02 billion vs. $908.4 million last year. The company sees 3Q earnings at 78 - 83 cents a share and 4Q per-share profit at 50 - 54 cents. For 2005, the company lifted its earnings forecast to $3.12 - $3.18 a share.


NTERNATIONAL MARKETS

European markets fell across the region as investors weigh the impact of oil on corporate earnings and economic growth. Other than oil-heavy FTSE index in London and Norway, markets in Germany fell 0.7% and in Paris declined 0.4%.

German telecom giant Deutsche Telekom ended lower 2.1% after it reported second quarter income growth of 63%. ING, Dutch insurance and banking giant fell 2.7% after second quarter earnings fell 6.7%.

Insurance company stocks experienced heavy trading as Britain’s Aviva and Royal Sun & Alliance declined 2% each despite rise in earnings of 21% and 100% respectively. Aegon, Dutch insurance stock declined after reporting rise in net of 71%. Allianz just a day ago reported 64% rise in net income.

U.S. ECONOMIC NEWS


ADVANCED JULY SALES FOR RETAIL SALES AND FOOD SERVICES

July retail sales advanced 1.8% less than expected 2% but more than June gain of 1.7% driven by auto discounting from auto manufacturers. Excluding auto sales the retail sales advanced 0.3% less than estimates of 0.6%.


The following is the unedited transcript of the text from the U.S. Census Bureau News which can be accessed at www.economicindicators.gov.

The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for July, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $357.0 billion, an increase of 1.8 percent from the previous month and up 10.3 percent from July 2004.

Total sales for the May through July 2005 period were up 8.8 percent from the same period a year ago. The May to June 2005 percent change was unrevised from +1.7 percent.

Retail trade sales were up 1.9 percent from June and were up 10.7 percent above last year. Gasoline station sales were up 20.3 percent from July 2004 and sales of motor vehicle and parts dealers were up 17.9 percent from last year.

LABOR MARKET

The weekly and four-week average for the unemployment claims declined as reported by the Labor Department. The weekly initial claim for the week ending August 6th declined by 308,000 was in stark contrast to the Wall Street’s expectation of rise to 315,000. The four-week average moved to the lowest level reached since February 26.

The following is the unedited transcript of the news release from the Labor Department, which can be obtained at www.dol.gov.


UNEMPLOYMENT INSURANCE WEEKLY CLAIMS REPORT

SEASONALLY ADJUSTED DATA

In the week ending Aug. 6, the advance figure for seasonally adjusted initial claims was 308,000, a decrease of 6,000 from the previous week's revised figure of 314,000. The 4-week moving average was 309,250, a decrease of 7,250 from the previous week's revised average of 316,500.

The advance seasonally adjusted insured unemployment rate was 2.0 percent for the week ending July 30, unchanged from the prior week's unrevised rate of 2.0 percent.

The advance number for seasonally adjusted insured unemployment during the week ending July 30 was 2,573,000, a decrease of 8,000 from the preceding week's unrevised level of 2,581,000. The 4-week moving average was 2,582,000, a decrease of 11,000 from the preceding week's revised average of 2,593,000.


UNADJUSTED DATA

The advance number of actual initial claims under state programs, unadjusted, totaled 267,461 in the week ending Aug. 6, an increase of 5,819 from the previous week. There were 291,611 initial claims in the comparable week in 2004.

The advance unadjusted insured unemployment rate was 1.9 percent during the week ending July 30, a decrease of 0.1 percentage point from the prior week. The advance unadjusted number for persons claiming UI benefits in state programs totaled 2,475,224, a decrease of 33,668 from the preceding week. A year earlier, the rate was 2.2 percent and the volume was 2,755,373.
Extended benefits were not available in any state during the week ending July 23.

Initial claims for UI benefits by former Federal civilian employees totaled 1,670 in the week ending July 30, an increase of 151 from the prior week. There were 1,984 initial claims by newly discharged veterans, a decrease of 61 from the preceding week.

There were 16,569 former Federal civilian employees claiming UI benefits for the week ending July 23, an increase of 424 from the previous week. Newly discharged veterans claiming benefits totaled 29,951, an increase of 1,378 from the prior week.

The highest insured unemployment rates in the week ending July 23 were in Michigan (3.3 percent), Alaska (3.2), New Jersey (3.0), Pennsylvania (3.0), Rhode Island (2.8), Oregon (2.7), Arkansas (2.5), Connecticut (2.5), Massachusetts (2.4), California (2.3), New York (2.3), and Wisconsin (2.3).
The largest increases in initial claims for the week ending July 30 were in Washington (+428), Arkansas (+350), Maine (+186), Idaho (+158), and New Mexico (+55), while the largest decreases were in North Carolina (-6,263), Tennessee (-2,737), Georgia (-2,643), Puerto Rico (-1,751), and Missouri (-1,749).

EARNINGS NEWS

Creative Technology Ltd. ((CREAF)), Singapore-based digital entertainment company, reported a 4Q net loss of 38 cents a share vs. net earnings of 8 cents a share a year earlier, blaming the quarterly loss on the lower-than-expected selling prices for MP3 players and inventory write-downs. Net sales rose to $305.4 million vs. $201.8 million last year.

Standard Parking Corp. ((STAN)), Chicago-based parking management service company , reported 2Q net earnings of 40 cents a share vs. a net loss of 24 cents a share a year ago. Revenue rose to $147.4 million vs. $140.9 million last year. The company sees 2005 earnings in the range of $1.40 - $1.50 a share.

Zoltek Companies Inc. ((ZOLT)), carbon fiber developer, reported a 3Q net loss of 8 cents a share vs. net earnings of 4 cents a share a year ago. Revenue rose to $19.7 million vs. $13.3 million a year earlier.

Interchange Inc. ((INCX)) , paid-search advertising services provider, reported a 2Q net loss of 10 cents a share vs. net earnings of 2 cents a share last year. Revenue rose to $4.8 million from $4.3 million. Interchange also cut its 3Q revenue guidance to a 3Q net loss of $1.5 - $1.6 million, or 17 - 18 cents a share, on revenue of $4.3 - $4.6 million. In April, it had targeted a 3Q loss of 6 - 9 cents a share on revenue of $6.1 - $6.4 million.

Tommy Hilfiger Corp. ((TOM)), clothing retailer, reported preliminary 1Q revenue of $319 million, down vs. $329 million a year ago. The company expects to post a narrower loss vs. the same period a year earlier. Tommy Hilfiger forecast 2006 capital expenditures of $90 million.

Advance Auto Parts Inc. ((AAP)), auto parts retailer, reported 2Q net earnings of 90 cents a share vs. 70 cents a share, in the year-ago quarter, beating analysts’ estimate of earnings at 87 cents a share. Net sales rose to $1.02 billion vs. $908.4 million last year. The company sees 3Q earnings at 78 - 83 cents a share and 4Q per-share profit at 50 - 54 cents. For 2005, the company lifted its earnings forecast to $3.12 - $3.18 a share.

Sourcecorp Inc. ((SRCP)), business process outsourcing services provider, reported 2Q net earnings of 33 cents a share, up 11% vs. 30 cents a share a year ago. Revenue rose to $106.5 million vs. $97.1 million last year. The company cut its 2005 earnings forecast to $1.27 - $1.47 a share from $1.35 - $1.55 a share. Sourcecorp also lowered its 2005 revenue outlook to $405 - $415 million from $400 - $425 million targeted earlier.

Rupert Murdoch's News Corp. ((NWS)) said its 4Q profit rose 67% to 22 cents a share vs. 15 cents a share, in the year-ago period on higher operating profits at its filmed entertainment and cable network divisions. Revenue rose 12% to $6.1 billion. Analysts expected a profit of 17 cents a share on revenue of $5.86 billion.

TOM Online ((TOMO)), Chinese Internet services company, announced that 2Q net profit rose 1.8% to 19.5 cents a share on record revenue up 38.5%, missing analysts’ estimate of 20 cents a share.

Liberty Global, ex-U.S. cable operator, reversed to a pro-forma 2Q loss of 67 cents a share despite revenue growth of up 35% and due to increased foreign currency transaction losses.

Spirent, U.K. telecom testing equipment provider, announced it turned to a first-half net loss of 36.8 million pounds vs. a net profit of 12 million pounds in the year-ago period on weak performance in its service assurance division.

Carlsberg, Danish brewer, announced that 2Q net profit reached DKK633 million ($105 million) from DKK178 million in the year-ago period due to special items last year.

Aegon, Dutch insurer, posted a 2Q net income rise of 71% to 760 million euro after 567 million euro of investment gains, with pre-tax operating earnings up 12% to 507 million euro, beating expectations of 450 million euro.

ING Groep, Dutch bank, announced 2Q net profit was down 6.7% to 1.55 billion euro mainly due to gains on divestment in the year-ago period, beating expectations of 1.22 - 1.466 billion euro.

Deutsche Telekom, telecommunication services group, announced 2Q net income rose 63.4% to 943 million euros on fewer financial expenses and lack of mobile license impairments. Revenue was up 2.6%, helped by 1.9 million new customers.

CORPORATE NEWS

First Financial Bankshares Inc. ((FFIN)) has agreed to buy Bridgeport Financial Corp. for $20.3 million, plus the assumption of $5.5 million in debt and trust preferred securities. The deal for Bridgeport, parent company of First National Bank in Texas, is expected to be completed in the fourth quarter.

Genesee & Wyoming Inc. ((GWR)) said that its North American traffic for the month of July advanced 25.1% to 66,213 carloads vs. the same month last year. Monthly Australian traffic climbed 0.3% to 80,284 carloads vs. the year ago period.

Goldman Sachs Group agreed to build a new $2 billion headquarters across the street from the former World Trade Center site, reversing its decision this spring to abandon its building plans.

CV Therapeutics said the first of two pivotal Phase 3 studies of regadenoson, which helps detect coronary artery disease, met its primary end point.

Tommy Hilfiger, apparel maker, resolved an 11-month federal investigation by agreeing to pay a total of $18.1 million in back taxes and interest.

Elron Electronic Industries Ltd. ((ELRN)) disclosed the completion of a new investment of about $7 million in Israel-based BrainsGate Ltd., a developer of implantable medical devices to treat various central nervous system related diseases. Elron said it would hold 20% of BrainsGate, on a fully diluted basis, after the investment.

Impala Platinum Holdings Ltd., Dynatec Corp. and Sumitomo Corp. revealed that Dynatec and Sumitomo have entered into a deal, confirmed by Implats, in which Sumitomo would buy a 25% interest in the Ambatovy Nickel Project in Madagascar.

Yahoo! Inc. ((YHOO)) and Alibaba.com disclosed a definitive agreement to form a long-term strategic partnership in China. Under the terms of the agreement, Yahoo! would contribute its Yahoo! China business to Alibaba.com and both companies would work together in an exclusive partnership to grow the Yahoo! brand in China.

In addition, Yahoo! noted that it is investing $1 billion in cash to purchase Alibaba.com shares from the company and other shareholders. The deal allows Yahoo! to hold about 40% economic interest with 35% voting rights in Alibaba.com. Yahoo said the overall transaction is valued at more than $4 billion. The transaction is seen to end in 4Q of 2005.