Market May Have to Fight Oil

albena
25 Aug, 2005
New York City

Oil retreated after hitting a record high and stocks are expected not to lose ground as futures indicate a flat opening. On Thursday morning traders will certainly focus on jobless claims, seen slightly down from last week, but oil prices draw the main attention. Oil neared $68 a barrel in Asian trade Thursday as a tropical storm threatened to disrupt supply from the US Gulf Coast. Toll Brother

U.S. AVERAGES

Oil neared $68 a barrel in Asian trade Thursday as a tropical storm threatened to disrupt supply from the US Gulf Coast. Lower-than-forecast gasoline inventory levels in the U.S. also helped drive prices higher and some traders commented it is only be a matter of time before oil hits $70 dollars a barrel.

Vonage Holdings Corp., provider of residential phone services over the Internet, is planning an initial public offering to raise as much as $600 million, according to reports. Vonage provides discounted local and long-distance phone services to about 800,000 households. The Edison, New Jersey-based company declined comments on the matter.

Toll Brothers, luxury homebuilder, said its 3Q profits more than doubled on strong land position and pricing power in its affluent markets.

JoS. A. Bank Clothiers ((JOSB)) said it plans to open about 46 new stores in the second half of fiscal 2005, giving it a full-year total of 60. At least 25 of these are expected during the third quarter, according to the company. Over the next 4 years, JoS. A. Bank Clothiers plans to grow the chain to about 500 stores.

Wells Fargo & Co. ((WFC)), the fifth largest U.S. bank, will also be in focus on news that it was interested in bidding for British bank Lloyds TSB.

Petsmart Inc. ((PETM)) shares lost 7.2% in Wednesday's after-hours trading on Inet after the pet supply retailer posted quarterly sales short of analysts’ projections.

Shares of TiVo Inc. ((TIVO)) lost almost 7% on Inet after Wednesday's close. The digital video recording systems maker said it faces significant challenges and would no longer issue subscription targets.

General Electric Co. ((GE)) has agreed to pay $1.55 billion for a 25% stake in Turkish bank Garanti Bank AS. According to reports, GE agreed to acquire the stake from Turkish conglomerate Dogus Holding AS, which owns 51% of Garanti, Turkey's No.3 privately owned bank.
ECONOMIC NEWS

Weekly employment data are due to be released before the opening bell Thursday. Economists expect initial jobless claims to come in at 315,000 for the week ended August 20, a slight change vs. the previous week's mark of 316,000.

INTERNATIONAL MARKET NEWS

Tokyo's benchmark stock index dropped from a four-year high Thursday. The Nikkei 225 index closed at 12,405.16 points on the Tokyo Stock Exchange; down 0.78% vs. Wednesday.

Markets elsewhere in Asia closed mixed Thursday. Hong Kong's Hang Seng Index finished almost flat at 14,887.71. Australia's All Ordinaries index slid 0.5% to 4,403.80. Singapore's Straits Times index added 0.4% to 2,287.56, while in Taipei, the Weighted index shed 0.3% to 6,109.66. In Seoul, the Kospi index closed up 0.3% at 1,097.29, trimming earlier losses.

European markets were weaker Thursday after crude oil hit $68, dragging airlines and automakers down. The German DAX 30 declined 1.1% to 4,863 and the French CAC 40 lost 0.9% to 4,384. The U.K.'s FTSE 100 index dropped 0.4% to 5,251.

Indonesian shares climbed after a week of declines on expectations that the central bank and government would soon unite to defend the rupiah, which dropped to a 3 1/2-year low. The Jakarta Stock Exchange's Composite Index closed up 2.6% at 1,061.847. The Indonesian currency closed at 10,340 vs. the dollar from 10,280 Wednesday.

ENERGY, METALS AND CURRENCIES MARKETS

Crude oil prices climbed to a record $68 a barrel level Thursday after the United States posted a drop in gasoline stocks and China announced its crude imports increased in July. October contracts on the New York Mercantile Exchange hit $68 a barrel mid-morning in Singapore before afterwards sliding to $67.55, and marking an increase of 23 cents versus Wednesday's closing in New York.

In currency trading, the dollar was trading at 109.94 yen on the Tokyo foreign exchange market, down 0.75 yen from late Wednesday, and below the 110.22 it bought later that day in New York. The greenback varied between 109.76 yen and 110.45 yen in Tokyo. The euro advanced to $1.2290 vs. $1.2185 late Wednesday.

Gold traded in London at $439.00 bid per troy ounce, up vs. $436.70 on Wednesday. In Zurich the bid price was $439.50, up vs. $436.85. Gold gained $1.30 in Hong Kong to finish at $439.25.

Gasoline for September delivery added 6.78 cents, to $1.926 a gallon. Nationwide, a gallon of regular gasoline cost $2.611 Tuesday, close to the record of $2.614 set last week

EARNINGS NEWS

Invensys, software and information manufacturer, announced that 1Q net loss was reduced to 26 million pounds from 42 million pounds for the comparable period last year despite revenue decline.

Hilton, hotel and gaming company, announced that pretax profit for the first half advanced to 201.9 million pounds from 193.7 million pounds for the year-ago period on revenue growth. Profit at its betting chain Ladbrokes was down by 6.3%.

Toll Brothers, luxury homes builder, reported 3Q net income of $1.27 per share, up from 66 cents per share in the year-ago period on strong revenue growth, beating analysts’ expectations of $1.19 per share.

Vimpel-Com, wireless telecommunications services provider, reported 2Q net income advanced to $3.11 a share, up from $2.24 a share a year earlier on strong operating revenues growth and more than 4.3 million new subscribers.

Stewart & Stevenson, industrial equipment maker, announced that 2Q net income increased to 31 cents a share on revenue growth of Earnings from continuing operations totaled 56 cents a share, up vs. 40 cents in the same period last year.

Tech Data, distributor of computer products, posted a 2Q loss of $1.02 per share, including a one-time charge, down vs. a profit of 52 cents per share in the year-ago period. Aside from the charge, the company recorded a 2Q profit of $0.27 per share, beating analyst estimate by 2 cents. Net sales for the period totaled $4.83 billion, up from $4.58 billion the year earlier.

CORPORATE NEWS

The European Commission approved Johnson & Johnson's takeover of Guidant Corp. for 18 billion euro on condition the new company sell off some of its smaller units.

Johnson Controls, auto parts maker, agreed to acquire air conditioner maker York International for $3.2 billion in cash and assumed debt. The offer of $56.50 a share represents a premium of 35% from Wednesday's close level. York shares added 32%, to $55.11 in after-market trading.

Nokia ((NOK)) disclosed its plans to open a Global Networks Operation Center in India by the end of the year. The center is planned to perform network operation tasks mainly for selected operators in the Asia Pacific region as well as Europe, the Middle East and Africa.