DaimlerChrysler Drives Europe Higher

Elena
23 Mar, 2007
New York City

European stocks finished in the positive on Friday, boosted by gains in the shares of automakers and oil producers which helped offset weakness in the tech sector. DaimlerChrysler shares advanced 6.4% amid continued speculation about a possible sale of Chrysler. Volkswagen climbed 6.2%, amid speculation that Porsche will buy them. Other gainers in the sector included Fiat and Renault. The German DAX 30 rose 0.6%, the French CAC-40 index rose 0.7%, and the U.K. FTSE 100 added 0.3%.

[R]1:00PM NY European markets closed higher, helped by gains in the automotive sector.[/R]
European stocks finished in the positive on Friday, boosted by gains in the shares of automakers and oil producers which helped offset weakness in the tech sector. DaimlerChrysler shares advanced 6.4% amid continued speculation about a possible sale of Chrysler. Volkswagen climbed 6.2%, amid recurring speculation that Porsche, which already holds a 27.4% stake in Volkswagen, will buy them. Other gainers in the sector included Fiat and Renault. A sharp rebound in crude oil prices sent oil companies higher such as BP and Royal Dutch Shell. Oil rose above $62 a barrel after the British government said that 15 naval personnel have been captured at gunpoint by Iranian forces while patrolling off the coast of Iraq. Shares in German software giant SAP fell 1.7% after Oracle filed a lawsuit in a California federal court alleging that its rival is engaged in ‘corporate theft on a grand scale’ in a series of ‘high-tech raids’. Utility shares were also in focus. Germany''s E.On lost 0.6% after Spain''s Acciona said it and Enel are considering a bid offer for Spanish utility Endesa if a bid by E.On is unsuccessful. Acciona rose over 3%, while Enel slipped 1.1% in Milan.The German DAX Xetra 30 rose 0.6% at 6,899.06, the French CAC-40 index rose 0.7% at 5,634.75 and the U.K. FTSE 100 added 0.3% at 6,339.40.


[R]11:30AM U.S. stocks turned higher on unexpected rise in home sales.[/R]
Stocks turned higher Friday after an unexpected jump in existing homes sales in February added to optimism that the housing sector may not be as weak as feared. Existing home sales rose by the biggest amount in nearly three years. The 3.9% increase was the largest since a similar jump in March 2004. In corporate news, Blackstone Group has file to bring part of the firm public in an offering worth up to $4 billion. The filing allows public access to once private numbers, including the $2.27 B of last-year income. DaimlerChrysler ((DCX)) rose 5% amid reports the automaker would sell its Chrysler unit. Among earnings-inspired movers, Jabil Circuit ((JBL)) dropped nearly 10% after releasing disappointing forecasts.

On deal news front, Paxar Corp. ((PXR)), a maker of tags, labels and apparel identification products, jumped 19% after Avery Dennison Corp., a maker of adhesive labels, said it agreed to acquire the company in a deal worth $1.34 billion. Staff management software company Kronos ((KRON)) jumped 13.5% after it said Friday it agreed to be bought by private equity firm Hellman & Friedman Capital Partners VI LP and its related funds for $1.74 billion, or $55 per share in cash. The transaction is a 17.9% premium to the company''s closing stock price of $46.63 on Thursday. In late morning trading, the Dow Jones industrial average rose 31.49, or 0.25%, to 12,492.63. The Standard & Poor''s 500 index rose 3.18, or 0.22%, to 1,437.72, and the Nasdaq composite index advanced 0.91, or 0.04%, to 2,452.65. Bonds fell, with the yield on the benchmark 10-year Treasury note rising to 4.60% from 4.58% late Thursday.

[R]Existing home sales unexpectedly increased by 3.9% in February.[/R]
Friday morning, the National Association of Realtors released its report on existing home sales in the month of February, showing that sales unexpectedly showed a significant increase compared to the previous month. The report showed that existing home sales rose 3.9 percent to an annual rate of 6.69 million units in February from a revised 6.44 million unit rate in January. Despite the increase, existing home sales were still down 3.6 percent compared to February of 2006. Economists had been expecting existing home sales to fall to a 6.30 million unit rate compared to the 6.46 million unit rate that was originally reported for the previous month. The unexpected increase in existing home sales was due in large part to strong sales growth in the Northeast, where sales surged up 14.2 percent. Sales rose 3.9 percent in the Midwest and 1.6 percent in the South, while sales in the West were unchanged. However, the report also showed that the national median existing-home price for all housing types was $212,800 in February, which is down 1.3 percent from the median price of $215,700 in the same month last year. The report also showed that total housing inventory levels rose 5.9 percent to 3.75 million existing homes available for sale at the end of February. This represents a 6.7-month supply at the current sales pace compared with a 6.6-month supply in January.


[R]9:45AM U.S. stocks opened flat ahead of dousing data.[/R]
Wall Street opened nearly flat on Friday, with investors waiting for the release of February existing home sales. In corporate news, Amgen ((AMGN)) fell 4.2% after the company halted a trail of colon cancer drug Vectibix. ImClone Systems ((IMCL)), which makes Erbitux, a competitor drug to Vectibix, jumped 15%. DaimlerChrysler ((DCX)) rose 4.1% amid reports the automaker would sell its Chrysler unit. Kraft Foods ((KFT))rose nearly 1% after news the company will join the S&P 500 on March 30, replacing Sabre Holdings Corp. ((TSG)).

Among companies reporting earnings news, Nike ((NKE)) fell 2.9% after the retailer posted an 8% profit jump but also said that margins in the current quarter and year would be flat or slightly down. Palm ((PALM)) gained 1% after it issued a better-than-forecast earnings report. Nevertheless, UBS downgraded its stock, citing recent stock gains.

Dow component Citigroup ((C)) received some attention amid reports that a faction within the bank is in favor of a bid for ABN Amro ((ABN)). The Dutch bank holding merger wich is talks with Barclays ((BCS)) gained 2.2%. In the first hour of trading, the Dow Jones industrial average fell 6.41, or 0.05%, to 12,454.73. The Standard & Poor''s 500 index fell 0.54, or 0.04%, to 1,434.00, and the Nasdaq composite index fell 1.45, or 0.06%, to 2,450.29. Bonds rose, with the yield on the benchmark 10-year Treasury note falling to 4.57% from 4.58% late Thursday.


[R]9:00AM Wall Street to open modestly higher ahead of housing data.[/R]
U.S. stock markets looked poised for moderately higher opening on Friday, awaiting key economic data on housing starts. Wall Street expects a decline in sales after jumping to 6.46 million in January. The Federal Reserve said earlier this week that an ‘adjustment’ in the housing sector was continuing, offering some relief for investors concerned about the troubled subprime mortgage market. Among companies in focus, shares of Amgen ((AMGN)) dropped 4.2% in pre-open trade after it halted a study due to poor survival in patients that used Vectibix along with Genentech''''s ((DNA)) Avastin and chemotherapy to treat colorectal cancer.

In earnings news, Nike ((NKE)) slipped 2% after the athletic apparel maker reported an 8% profit rise but issued a soft gross margin forecast. Palm ((PALM)) lost 1.1% in pre-open trade after UBS still downgraded the maker of handheld devices, citing its recent stock price run. The company reported a better-than-forecast quarterly profit. Jabil Circuit ((JBL)) dropped 8.3% after releasing disappointing forecasts. On the merger-and-acquisition news front, Acciona and Enel ((EN)) said they''re considering a joint bid for Spanish utility Endesa ((ELE)) that could top the $55 billion offer from Germany''s E.On. S&P 500 futures rose 1.3 points at 1,446.30 and Nasdaq 100 futures rose a point at 1,819.75. Dow industrial futures rose 4 points.