Oil Rises, Futures Fall

albena
24 Aug, 2005
New York City

Stock futures are below the flat line early Wednesday morning, pointing to a weaker opening as oil continues to rise on the latest tropical storm worries. Reports on durable goods and new homes sales could also change the focus of the market. Google is expected to launch its instant-messaging service today. BHP Billiton reported record full-year net profit up 89.3 % vs. a year ago.

U.S. AVERAGES

U.S. stock futures pointed to a lower market opening Wednesday as oil prices topped $66 a barrel ahead of weekly oil inventory report, fueling fears that higher energy costs could affect corporate profits and consumer spending.

Google ((GOOG)) announced that it expects to launch its instant-messaging service Wednesday to let users exchange text messages and make voice calls over their personal computers thus competing the messaging services provided by America Online, Yahoo! and Microsoft. Google Talk is about to enter a difficult battle on the instant-messaging services front as AOL's has already got about 41.6 million U.S. users, followed by Yahoo Messenger with 19.1 million users and MSN Messenger with 14.1 million users.

Ford Motor Co. ((F)) is to announce a new restructuring plan soon to return its key North American vehicle operations to profitability, according to the company.

China's No.1 Web search company Baidu.com Inc. ((BIDU)), which became public in early August, could be among stocks in focus. Baidu’s stock lost 0.6% to $81.55 in after-hours trading Tuesday, after the company reported that its 2Q net income climbed vs. a year earlier.

Late Tuesday, Applebee's International Inc. lowered its 3Q and 2005 earnings guidance and SeaChange International Inc. slashed its revenue target for 2005.

Anglo-Australian mining company BHP Billiton’s ((BHP)) net profit jumped by almost 90% in fiscal 2005 due to strong market conditions, especially in China.

Regis ((RGS)) posted a 10% increase in 4Q earnings and reiterated its full-year forecast.

On Wednesday Dollar Tree is expected to post 2Q earnings of 25 cents a share. Also reporting Wednesday are TiVo Inc., PetsMart, Intuit Inc., Coldwater Creek, Brown-Forman and Michaels Stores.

ECONOMIC NEWS

A government report on new home sales is due Wednesday, a day after an industry report on existing home sales declined more than the drop expected by analysts. Economists forecast that new home sales have dropped to an annual rate of 1.33 million vs. a record 1.37 million last year.

A reading on durable goods orders is also scheduled for Wednesday, with economists expecting a decline of 1.5% after an increase of 2.8% a year ago.

INTERNATIONAL MARKET NEWS

Asian markets ended higher as oil prices retreated from recent high levels. Tokyo's Nikkei-225 Index was up by 0.22% to 10,985.33, while Hong Kong's Hang Seng Stock Index gained 1.73% to 12,646.49. Korea's Kospi Index added 0.60% to 792.34, while Australia's All Ordinaries Index finished up 0.13% to 3539.70.

Tokyo closed higher Wednesday, reaching to a new four-year high for the third-straight session due to growing confidence in the country's economic recovery. The Nikkei 225 index added 0.24% percent, to 12,502.26 on the Tokyo Stock Exchange. The broader TOPIX gained 0.28% to 1,275.61.

European shares declined in early trading Wednesday dragged down by mining and metals stocks. The German DAX 30 lost 0.3% to 4,904, the French CAC 40 dropped 0.2% to 4,428 and the U.K.'s FTSE 100 index slid 0.2% to 5,292.

ENERGY, METALS AND CURRENCIES MARKETS

The price of crude soared ahead of the key U.S. petroleum inventories report that is expected to show decline in crude and gasoline stocks on persistent worries over supply disruptions provoked by a tropical storm which could hit Gulf of Mexico output. On the New York Mercantile Exchange October crude advanced by 60 cents to $66.31 a barrel, while Nymex crude added 45 cents and was at $66.16 mid-afternoon in Singapore. On London's International Petroleum Exchange, October Brent crude futures quoted 42 cents up at $65.07 a barrel.

The dollar bought 110.54 yen on the Tokyo foreign exchange market at Wednesday, up 0.66 yen vs. late Tuesday and above the 109.88 yen it bought later that day in New York. The euro fell to $1.2183 vs. $1.2234 late Tuesday.

Gold closed at $437.95 an ounce in Hong Kong, down $2.2 an ounce from Tuesday .

Bond prices remained little changed, leaving the yield on the 10-year treasury at 4.18% level late Tuesday.

EARNINGS NEWS

Regis, hair care producer, reported 4Q net income of 64 cents per share, up vs. 58 cents per share for the same time last year on 17% consolidated revenue growth and a 0.9 % rise in same-store sales.

Telekom Austria telecommunications provider, reported 2Q earnings of 39 eurocents, compared with 21 eurocents in the comparable period last year on revenue growth in the wireless business segment, mainly due to foreign operations, higher subscribers and strong data business.

BHP Billiton, Anglo-Australian resources group, reported record full-year net profit of US$6.398 billion, up 89.3 %t from US$3.379 billion a year ago on strong demand from China and high prices for its raw materials.

Wind River Systems Inc. ((WIND)), device software optimization company, after the closing bell Tuesday posted 2Q net earnings of 6 cents a share, up 70% vs. 4 cents a share a year earlier, meeting estimates. For 3Q the company sees earnings at 5 to 6 cents a share and for 2006, the company forecasts a per-share profit of 26 to 28 cents.

Key Tronic Corp. ((KTCC)), electronics manufacturer, after the closing bell on Tuesday reported 4Q net earnings of 28 cents a share vs. 3 cents a share, for the same period a year ago. The company sees 1Q earnings of 6 to 10 cents a share.

Ace Comm Corp. ((ACEC)) after Tuesday's closing bell posted 4Q net earnings of 2 cents a share vs. a loss of 15 cents a share for the same quarter a year ago. Revenue rose 71% to $6.8 million vs. $4 million last year.

Nordson Corp. ((NDSN)), dispensing equipment maker, after Tuesday's closing bell posted 3Q net earnings of 50 cents a share, up 7.6% vs. 47 cents a share in the year-ago quarter. Net sales at the company advanced to $201.6 million vs. $197.9 million last year.

Baidu.com ((BIDU)), Chinese Web search engine, posted 2Q net earnings of 12.1 million yuan ($1.5 million), or 0.39 yuan (5 cents) per American Depositary Receipt, versus 1.5 million yuan, or 0.06 yuan per ADR, last year. Revenue climbed to 69.7 million yuan vs. 24.1 million yuan last year. Baidu sees 3Q revenue at 77.4 million to 81.2 million yuan. This is the company’s first quarterly financial report since it went public earlier in August.

Koor Industries Inc. ((KOR)), investment holding company, after Tuesday's closing bell posted 2Q net earnings of 18 cents per American depositary receipt vs. 5 cents per ADR, in the year-earlier quarter. Revenue fell to $163.9 million vs. $489.5 million last year.

Handleman Co. ((HDL)), provider of pre-recorded music products, after the closing bell on Tuesday reported a 1Q net loss of 17 cents a share vs. net earnings of 4 cents a share a year earlier. Analysts expected 1Q earnings of 2 cents a share.

Westaff Inc. ((WSTF)), provider of staffing services, after the closing bell on Tuesday posted 3Q net earnings of 14 cents a share vs. 11 cents a share, for the same quarter a year ago. The company reported revenue of $141.1 million vs. $139.3 million a year earlier.

CORPORATE NEWS

Northern Trust ((NTRS)) said that it has been chosen by Julius Baer Investments Ltd. to provide investment outsourcing solutions for about $4.5 billion in fixed income assets under management. The agreement is expected to be completed by the end of 2005.

News Corp. ((NWS)) plans to sell Sky Radio, Dutch radio broadcaster, according to reports. According to Rupert Murdoch, chairman and chief executive of News Corp., the popularity of digital music players is drawing listeners away from radio, making the long-term future of the medium uncertain.

Intel ((INTC)) said it designed a new generation of computer chips that should facilitate laptop PCs to function longer on their batteries, as well as help desktop users to save on power costs. Intel targets to start shipping these chips in the second half of the forthcoming year. The new chip would include features of Intel's Pentium 4 chip for desktops and servers and of the Pentium M chip used in notebooks, according to the company.

OTHER NEWS

The Japanese government announced Tuesday that the Ministry of Economy, Trade and Industry's all industries index stood at 104.1 in June, up 1.3% vs. the previous month. Economists had expected the index to rise 0.8%.