U.S. Market to Open High

Elena
08 Mar, 2007
New York City

U.S. stock futures advanced on Thursday, boosted by solid gains in overseas markets and strength in the U.S. dollar vs. the Japanese yen. The dollar rose 1.2% at 116.97 yen. Sluggish retailer sales in February and a rate hike from the European Central Bank failed to hurt the upside trend. Among pre-market highlights, Hollis-Eden Pharmaceuticals fell 21% as U.S. Dept. of Health found its Neumune drug ''technically unacceptable''.

[R]9:00AM U.S. stock futures pointed higher on strengthening dollar.[/R]
U.S. stock futures advanced on Thursday, boosted by solid gains in overseas markets and strength in the U.S. dollar vs. the Japanese yen. The dollar rose 1.2% at 116.97 yen. Sluggish retailer sales in February and a rate hike from the European Central Bank failed to hurt the upside trend. Some of the largetst nation's chain stores reported sales results for February, with the overall performance expected to be tepid after cold weather hit parts of the U.S. Among pre-market highlights, Hollis-Eden Pharmaceuticals ((HEPH))fell 21% as U.S. Dept. of Health found its Neumune drug 'technically unacceptable’.

Among companies releasing quarterly results, warehouse retailer Costco Wholesale ((COST)) posted a Q2 profit decline of 16%, blaming faster growing costs. Net income for the quarter dipped to 54 cents per share from 62 cents per share, but excluding special items, Q2 income would have been 66 cents per share. Revenue increased 7.5% to $15.1 billion from $14.06 billion a year earlier. On average, analysts predicted a quarterly profit of 66 cents per share and sales of $15.48 billion. Hovnanian Enterprises ((HOV)), home builder, is due to report earnings. On the economic news front, initial jobless claims totaled 328,000 last week, the lowest level in a month and down a better-than-expected 10,000 from the previous week. S&P 500 futures rose 10.40 points to 1,403.60 and Nasdaq 100 futures improved 20.50 points to 1,758.00. Dow industrial futures climbed 59 points to 12,260.

[R]Initial jobless claims dropped 10,000.[/R]
Thursday morning, the Department of Labor released its report on initial jobless claims in the week ended March 4, showing that jobless claims fell more than economists had been expecting. The decrease may generate some optimism about the strength of the February employment report. The report showed that initial jobless claims fell by 10,000 to 328,000 from the previous week's unrevised figure of 338,000. Economists had been expecting a much more modest decline to about 335,000. At the same time, the Labor Department said that the less volatile four-week moving average rose to 339,000 from the previous week's unrevised average of 335,250. With the increase, the moving average rose to its highest reading since the week ended October 29, 2005. The report also showed that continuing claims fell to 2.526 million in the week ended February 24 from the preceding week's revised level of 2.624 million. As mentioned above, the Labor Department is scheduled to release its report on employment in the month of February on Friday. Economists currently expect the report to show that the economy added around 100,000 jobs during the month. On Wednesday, a report from Automatic Data Processing, Inc. showed that private non-farm employment grew a modest 57,000 in February following an increase of 121,000 in January. Economists had been expecting employment to increase by about 100,000.


[R]8:30AM Asia finished mostly higher Thursday with gains in domestic stocks.[/R]
Asian markets finished mostly higher on Thursday. Japanese Nikkei rose 1.9% to 17,090.31. Toshiba rallied 4.9% after Goldman Sachs recommended investors to buy the stock. Nippon Steel, the world second-biggest steelmaker, settled up 4.5% with the share boosted as investors sought stocks, which are likely to lift dividend payouts. Retail group Daiei soared 7.1% after the Nikkei daily reported Aeon would take a 15% stake in the struggling supermarket and department operator. Inpex Holdings, the largest oil producer in Japan, advanced 1.6% as the crude-oil prices ended at their highest level in almost a week.

In Hong Kong, the Hang Seng Index ended 1.36% higher at 19175.17, boosted by stronger-than-expected earnings by Hong Kong Exchanges & Clearing as the stock surged 3.6% after the city''s stock-and-derivatives exchanges operator posted an 88% rise in its 2006 net profit, on a strong increase in market turnover and investment income last year. Hong Kong carrier Cathay Pacific also gained 2.5%, as the company on Wednesday reported net profit for 2006 rose 24% on strong passenger loads and surcharges.

South Korean Kospi Index advanced 0.92% to 1,423.89 and Taiwan Weighted Price Index added 1.24% to 7,573.87. Australia S&P/ASX 200 Index bucked the trend and dipped 0.1% to 5,799.60 while Singapore Straits Times Index surged 2.1% to 3,122.49.


[R]8:15AM U.S. Retailer posted disappointing March same-store sales.[/R]
U.S. largest chain stores started reporting sluggish same-store sales amid rough and choppy shopping in February. Unseasonably cold weather in February dampened lightweight apparel sales. Wal-Mart Stores Inc. ((WMT)) said Thursday its February same-store sales rose 0.9%, missing estimates of an increase by 1.5%. Total company sales for the four weeks ended March 2 rose 8.1% to $26.79 billion. The retailer projected March same-store sales are to rise between 1% and 2%.

Warehouse retailer Costco Wholesale ((COST)) reported 4% in its February same-store sales, missing the average analyst estimate of 5.1% growth.

Limited Brands Inc. ((LTD)) said Thursday its February same-store sales rose 3%, coming shy of analyst estimates of same-store sales increase by 4%. Net sales for the four weeks ended March 3 rose to $730.5 million from $635.8 million.

Bebe Stores ((BEBE)) posted a 2.2% decline in same-store sales, its first monthly decline in 46 months, down from expectations of a 2.2% gain.

Federated Department Stores ((FD)) said same-store sales for February rose 1.2%, below its previous forecast of a 2% to 3% rise.

The Gap ((GPS)) said same-store sales fell 4% in February, beating estimates of a drop of 4.8% for the month. Total sales for the four weeks ended March 3 slumped 5% to $910 million from $865 million in the same period a year earlier.

Pacific Sunwear of California ((PSUN)) announced a 5.7% decline in its February sales at stores open at least one year, missing the average analyst expectations of same-store sales drop of 3.7%.Total sales for the four weeks ended March 3 rose 1.2% to $88.7 million.

Pier 1 Imports ((PIR)) said its February same-store sales slipped 8.4%. Analysts had expected comparable-store sales to drop 4.4%. Total sales reached $120.5 million, an increase of 14.3%.

Sharper Image Corp. ((SHRP)) said Thursday its February same-store sales plunged 24%, coming in below forecast of a 16.7% decline. Total sales for the month ended Feb. 28 fell 29% to $22.1 million.

Meanwhile, high-end stores continued to shine. Nordstrom ((JWN)) reported a 9.1% jump in same-store sales in February, beating the 5.7% estimate.

McDonald’s ((MCD)) posted February same-store sales increase of 5.7%.


[R]8:00AM NY-7:00PM Mumbai Sensex spurts Thursday on buying in large-caps.[/R]
The Sensex finished 469.60 points, or 3.73%, higher at 13,049.35. The market-breadth was strong as there were more two gainers for every decliner. For 1,748 stocks that advanced, 776 declined and only 57 stocks were unchanged. Of the 30 stocks in the Sensex, there were no decliners. The turnover on NSE was Rs 7,954.06 crore, compared with Rs 8,881.84 crore on Wednesday.

Economic news

Prime Minister Manmohan Singh said that more public sector units should be listed in the stock exchanges. He also said that that the government will build stronger public sector companies and give it full managerial and financial autonomy. He also said that the economy was expected to grow over 9% during the fiscal 2007. He announced that the government was ready to change the approach to SEZs and added that land acquisition and resettlement has to be done equitable to farmers.

State Bank of India, the largest commercial bank in the country, will announce 50-100 basis points rise in lending rates this month in the wake of the recent 75 basis points increase in the prime lending rate.

Two acre plot of land located in Kalina, suburb of Mumbai was purchased local retail mall InOrbit for Rs 333 crores. Rising real estate prices have now reached bubble levels in many parts of Mumbai, Bangalore and New Delhi.

Trading highlights

Reliance Industries was the most-active stock with a turnover of Rs 199.70 crore followed by Indus Fila and newly listed MindTree Consulting. The software service company IPO surged more than 55% on the first day of trading and rose another 2% or Rs 14 to close at Rs 634.

Advancers

Hindustan Lever jumped nearly 9.5% to Rs 183.8, BHEL rallied 8% to Rs 2,175.5 and Gujarat Ambuja soared 8.4% to Rs 112.9. Other strong performers included HDFC Bank spurting 6.2% to Rs 972.3, Ranbaxy surged 6.2% to Rs 328.8, Dr Reddy’s Lab rose 6.7% to Rs 677, Grasim advanced 6.2% to Rs 2,235.2 and L&T rose 4.6% to Rs 1,521.1.

Telecom stocks kept their momentum and gained for the second straight day on the eve of the listing of Idea Cellular on Friday on March 9, 2007. Reliance Communications surged 5.6% to Rs 434.1, and Bharti Airtel gained 4.8% to Rs 757.5. Idea Cellular is to listed on the bourses on Friday, March 9 2007 and had priced its IPO at the upper end of Rs 65 - Rs 75 price band on a strong response to the issue.

Index heavy Reliance Industries advanced 3.6% to Rs 1,335 and IPCL jumped 11.8% to Rs 259. Reliance said that its board will meet on March 10 2007 to consider a proposal for merging subsidiary, IPCL, with the company.

Steel stocks rebounded on intense buying on firm global steel prices. SAIL jumped 15% to Rs 107, and JSW Steel rose 8% to Rs 447.70. Tata Steel advanced nearly 4% to Rs 428.90. Shareholders of the Corus Group have agreed to Tata Steel $12 billion takeover of the European steelmaker. SBI, Wipro and Satyam ended with gains of around 3.5% each at Rs 1,000, Rs 577, Rs 446, respectively.

Decliners

There were no decliners of the 30 stocks in the Sensex.


[R]6:30AM Europe was higher Thursday morning on commodities, earnings.[/R]
European markets advanced on Thursday morning. The German DAX Xetra 30 rose 0.4% at 6,646.51, the French CAC 40 rose 0.5% at 5,481.55 and the U.K. FTSE 100 rose 0.4% at 6,179.90.

Advancers

Suez, which is trying to merge with Gaz de France, advanced 1.3%. The firm announced its profit grew an above-forecast 43.5% to 3.6 billion euros, a record high, on cost reduction measures. Aegon advanced after reporting a 19% profit rise and Anglo Irish Bank climbed after saying first-half earnings per share should rise 40%.

BP was up 1.2% extending gains from Wednesday on an unexpected dwindling of U.S. energy inventories. Veolia shares added 1.5% as a 23.5% dividend hike to 1.05 euros a share offset a below-forecast profit increase of 22% to 759 million euros. PPR the owner of French department stores and the luxury goods group Gucci, gained 1.4% having said its annual profit rose a stronger-than-forecast 28%.

Decliners

Carrefour, one of the most volatile stocks on Wednesday, were flat although it said 2006 profit jumped 58% to 2.27 billion euros or up an in-line 3% when excluding sale of its Korean operations. Pernod Ricard shares slipped 3.9% after the maker of Martell brandy reported a below-forecast 2.4% first-half profit rise.

Oil and gold

Crude oil traded near $62 a barrel in New York on speculation that gasoline demand will rise as the summer driving season approaches in the U.S. Crude oil for April delivery rose 5 cents to $61.87 a barrel on the New York Mercantile Exchange in early trade in London. Brent crude fell 1 cent to $62.49 a barrel on the ICE Futures exchange in London. Gold opened Thursday at a bid price of $652.35 a troy ounce, up from $647.50 late Wednesday.

Currencies

The euro has risen 0.8% against the dollar in the past month to $1.3150 on the premise the central bank will increase its main refinancing rate to 3.75% from 3.50%. The yen dropped to 154.08 per euro in London from 152.93 in New York late yesterday. It fell to 117.15 against the dollar from 116.06. The pound gained against the yen and climbed for a third day versus the dollar before interest-rate setting meeting today by the Bank of England. Against the yen, the pound rose to 226.10 and was at 225.69 by in London from 224.35 late yesterday. The pound advanced against the dollar, trading at $1.9347 compared with 1.9330 yesterday.