Stock Futures Predict Gains

Elena
06 Mar, 2007
New York City

U.S. stock market futures were indicating a higher opening on Tuesday, boosted by a recovery in overseas bourses after the steep global decline in recent sassions. Asian stock markets advanced and European stock markets also moved higher. The U.S. dollar gained some ground against the rallying yen and helped provide further support to the pre-market sentiment. On the economic news front, January factory orders, statistics on January pending-home sales and Q4 productivity are due for release.

[R]9:00AM U.S. stock futures pointed higher, as overseas markets rebounded and the dollar gained ground.[/R]
U.S. stock market futures were indicating a higher opening on Tuesday, boosted by a recovery in overseas bourses after the steep global decline registered in recent sessions. Asian stock markets advanced, with the Nikkei 225 gaining 1.2% and the Hang Seng climbing 2.1%. European stock markets also moved higher. Investors were optimistic that the various worries have already been priced in. The U.S. dollar gained some ground against the rallying yen and helped provide further support to the pre-market sentiment. Oil and gold futures, hurt by the recent stock market drop, also rose in electronic trade. On the economic news front, January factory orders, statistics on January pending-home sales and Q4 productivity are due for release.

Among companies in the spotlight today, Citigroup ((C)) gained 1.1% in pre-market trading after the U.S. financial services company said it plans to buy Japanese brokerage Nikko Cordial in a deal worth around $11 billion. Topps Co. ((TOPP)) jumped 10% in the pre-open after it agreed to be acquired for $385.4 million by investment company Tornante Co. and private equity firm Madison Dearborn Partners. In other deal news, aircraft braking equipment maker K&F Industries Holdings ((KFI)) surged 9.2% as Britain's Meggitt agreed to buy it in a deal worth $1.1 billion, or $27 a share, which represents a 10% premium to Monday's close. Dow component Altria Group ((MO)) gained 1.2% ahead of the open after the tobacco company was upgraded to buy from hold at Deutsche Bank. S&P 500 futures climbed 14.70 points to 1,386.90 and Nasdaq 100 futures hiked up 17.50 points to 1,731.25. Dow industrial futures rallied 97 points to 12,133.


[R]8:30AM Asia ended mostly higher on Tuesday with Japan leading the way.[/R]
Asian markets closed mostly higher on Tuesday. In Tokyo, the Nikkei 225 benchmark index advanced 1.2% to 16,844.50. Japanese Internet and cellphone operator Softbank gained 3.5%, while Sony added 4.6%, as investors returned to shares as the yen eased. Brokerage firm Nikko Cordial advanced 13.7% after Japan''s third-largest brokerage said it was in advanced talks with Citigroup on a possible deal. Toyota rose 3.5%, leading broad gains among automotive shares.

Hang Seng Index in Hong Kong gained 2.1% to 19,058.56. Shares of China Life Insurance and other mainland financial stocks led the rebound. China Life surged 6.7%, while Industrial & Commercial Banking added 5.3% and China Construction Bank gained 4%. PetroChina, the listed entity of Chinese largest oil producer, ended 2.1% higher after oil prices recovered from a nearly two-week low in Asian electronic trading. HSBC Holdings advanced 2%, after the third-largest bank in the world posted a net income rise of 4.7% to $15.79 billion in 2006 from $15.79 billion.

Shanghai Composite Index in China finished 1.8% higher at 2,840.18. Australian S&P/ASX added 2.1%, while New Zealand NZSX-50 traded flat. Singapore Straits Times Index advanced 1.8% and Malaysia KLSE Composite gained 1.8%. Taiwan Weighted Price Index advanced1.5 % and South Korea''s Kospi Index rose 2%. Indonesia JSX Composite added 2%. Thailand SET Index bucked the broader trend, shedding 0.7% to 672.43.


[R]6:30AM European stock markets advanced in early trade on Tuesday.[/R]
European markets were higher on Tuesday. In early trade, the German DAX Xetra 30 rose 0.7% to 6,579.76, the French CAC 40 rose 0.5% to 5,410.65 and the U.K. FTSE 100 advanced 0.3% to 6,077.90.

Advancers

Swiss drugmaker Novartis surged 3% after it announced it won U.S. Food and Drug Administration clearance for Tekturna, a high-blood-pressure treatment. International Power rallied 4.3% after reporting a 44% profit increase on higher power prices in the U.K. as well as an improved performance from U.S. assets and a contribution from acquisitions. It also lifted its dividend 75%. Xstrata added 3.5% after the nickel and copper mining company reported annual adjusted profit more than doubled to a stronger-than-forecast $4.89 billion, with revenue rising 56% to $26.88 billion.

Financial and resource stocks were also higher on broker comment, recovering some of the heavy losses of recent sessions. Danske Bank gained 1.4% after Goldman Sachs upgraded the stock from neutral to sell. Credit Agricole rose 2.1% after Citigroup raised its recommendation on the French bank from sell to hold. Belgium Fortis meanwhile, gained 1.9% after WestLB lifted its rating from add to buy. German steelmaker Salzgitter gained 4% after Credit Suisse upgraded the stock from neutral to outperform.

Decliners

France Telecom fell 0.7% after reporting slumping profits, saying that its 2007 dividend won''t be raised and not providing a sales outlook. Frankfurt airport operator Fraport dropped 3.8% after warning that its 2007 profit would fall below 2006 levels, saying its dividend will be stable and reporting a below-consensus 7% rise in operating profit for 2006.

Oil and gold

Oil climbed away from $60 on Tuesday, drawing strength from an increase in Asian and European stocks after five days of losses. U.S. crude gained 37 cents to $60.44 a barrel, having dropped $1.57 on Monday to touch a two-week low of $59.55. London Brent crude was up 55 cents to $61.09.

Gold rose the most in two weeks on expectations a decline in the dollar against the euro will revive demand for the metal as an alternative investment. Gold for immediate delivery gained $7.80, or 1.2%, to $644.40 in early trade in London.

Currencies

The dollar recovered against the yen Tuesday from the previous day in Asia but remained slightly lower than overnight New York levels. The dollar was trading at 116.27 yen, down from 116.37 yen late Monday in New York, but above the 115.60 yen it cost late Monday in Asia. The euro rose to $1.3106, from $1.3098. The U.K. pound rebounded from a four- month low against the yen. The pound gained 1.1% against the yen, trading at 224.42 yen in early trade in London, from 221.88 yesterday. Against the euro, it was at 68.06 pence, from 68.16, and traded at $1.9263 from $1.9205.