Lower Openings on Economic Data

Elena
16 Aug, 2005
New York City

U. S. market is trading in the negative territory ahead of economic data coming out today. The Labor Department, The Commerce Department and The Fed. Reserve are due to release reports. Crude-oil hovers over $66 a barrel. Wal-Mart and Home Depot release strong quarterly results.

U.S. MARKET AVERAGES

U. S. stocks are trading in the negative territory after higher closing on Monday. Investors’ attention is focused on economic data releases, including consumer prices, housing starts and industrial production reports for July.

Dow Jones futures were recently down 24 points, while Nasdaq futures fell 3 points and S&P futures dropped 2.10 points.

The Labor Department announced in its report that the Consumer Price Index rose 0.5% in July, making the highest jump in 3 months. The inflation went higher on 3.8% rise in energy costs.

Consumer prices rose in July on record-high energy products, but new car prices had their biggest decline in 30 years, helping the underlying inflation stay tame.

The Commerce Department is scheduled to launch the housing starts report for July at 8.30 a.m.

The Federal Reserve is due to announce the July industrial production data at 9.15 a.m.

In corporate news

Wal-Mart, the global largest retailer, posted 2Q 6% net income rise on better-than-anticipated results for July.

Home Depot, home-improvement retailer, reported 2Q 14% profit rise on higher store efficiency. The company raised its full-year guidance.

Gateway reported it swung to a profit in the 2Q on record sales, but lowered its sales and profit outlook for2005.

Hewlett-Packard is expected to report 2Q higher sales and profit later in the day.


INTERNATIONAL MARKET NEWS

Asian-Pacific markets ended mixed after edging higher in early trading on retreating crude-oil prices and U.S. equity gains. The regional markets were also helped by overnight advance in Wall Street as investors bought tech stocks. The banks were the leading losers, falling from recent highs. The Nikkei rose 0.5% extending last-week gains on restored confidence in the economic recovery of the country. Averages in Hong Kong fell 0.2% and in South Korea dropped 1.2%.

European stocks moved upward in mid-day dealings on telecommunication takeover news with Deutsche Telecom and Cable & Wireless in the focus and on U.S. stock markets overnight gains. Steady oil, recently traded at $66.02 a barrel, also provided a boost to the markets. The German DAX 30 gained 0.6%, the French CAC 40 added 0.5%, and London’s FTSE edged up 0.2%. The euro was up 0.1% at $1.2363.

ENERGY, METALS AND CURRENCIES MARKETS

Oil prices keep retreating from recent highs on subsiding supply concerns. Light sweet crude for September delivery dropped 44 cents to $65.83 a barrel on the NYMEX in European trading. London Brent was down 39 cents to trade at $65.19.

Gold declined in European trading as the U.S. dollar advanced. In midmorning London trading gold stood at the recommended price of $440.85 per troy ounce, down from $441.35. In Hong Kong the precious metal fell $1.50 to close at $441.25. Silver opened at $6.96 per ounce, up from $6.95.

The U.S. dollar gained against its major counterparts ahead of U.S. government report, expected to show higher consumer prices and accelerating inflation. In European trading the euro was quoted at $1.2325, down from $1.2361. The greenback bought 109.26 yen, down from 109.28. The British pound stood at $1.8094, down from $1.8101.

EARNINGS NEWS

Home Depot, building materials seller, announced 2Q net profit was up to 82 cents a share from the year-ago period on 11.7% revenue growth, with same-store sales up 4%, beating analyst estimate of 79 cents earnings a share.

Wal-Mart, retailer, posted 2Q earnings of 67 cents per share, up vs. 62 cents per share in the same period last year on sales increase, beating analyst estimate of 65 cents per share.

J.C. Penney, department store retailer, posted 2Q earnings from continuing operations of 46 cents a share, up vs. a year-earlier equivalent profit of 22 cents a share on strong operating performance and the positive impact of its ongoing buyback program, beating analysts’ expectations of 40 cents a share. Same-store sales rose 4.2% in the July period.

Applied Films, posted a 4Q net loss of 20 cents a share, down from a profit of 18 cents a share in the same period last year on revenue decline of 25%.

Estee Lauder, skin care, makeup, fragrance and hair care products manufacturer, announced that 4Q net income form continuing operations was down to 30 cents a share from 31 cents in the year-earlier period. Aside from a tax charge for repatriated foreign earnings, income from continuing operations would have been 42 cents a share, or 1 cent ahead of analysts' expectations. Sales for the period ended June 30 were up, beating of analysts' estimates.

Dick's Sporting Goods, sporting goods retailer, posted 2Q earnings of 45 cents a share, up vs. 34 cents a share in the year-earlier period on sales increase, matching analyst estimate.

American Eagle Outfitters, merchandise goods seller, announced that 2Q profit rose to 37 cents a share vs. 20 cents in the same period last year on strong sales performance, beating analysts’ forecasts by a penny.

TJX, apparel and home fashions retailer, announced that 2Q profit advanced to 25 cents a share, up from 23 cents in the year-earlier period on sales growth, with same-store sales up 1%, missing analyst estimate by a penny.

National RV Holdings, motor homes manufacturer, posted a preliminary 2Q net profit of 53 cents a share, up from 24 cents a share in the same period last year. Preliminary second-quarter sales were up 3%.


CORPORATE NEWS

Delta Airlines, announced a decision to sell one of its regional feeder subsidiaries to Sky West for $425 million, but the company added that the sale won’t be able to cover a new cash reserve needed to secure a new credit-card processing deal.