Nasdaq Up 0.3%, Dow Down 0.9%, S&P Up 0.2%

123jump.com Staff
30 Mar, 2007
New York City

U.S. stocks fell dragging the Dow Jones Industrial Average to its first quarterly loss since June 2005, on concern new duties on Chinese imports may provoke a trade war. Commerce Department said February personal income and consumption increased at a seasonally adjusted rate of 0.6%compared to January. Take-Two shares declined 3%. PMC-Sierra rose 13% after the company said it would cut 175 jobs. Vodafone Group declined 4%.

[R]4:00PM NY; 10:00PM Frankfurt; 1:30AM Mumbai - GLOBAL MARKETS[/R]

Global markets barely budged at the end of the first quarter after steadily rising in the first forty five days of the quarter. World markets lost their early advances in the quarter led by Shanghai sell-off at the end of February and weakness in the housing market in the U.S.

Shanghai indexes led the global markets with gains between 40% and 50% followed by advances in Australia, Singapore, South Africa and Mexico.

In Asia Japan closed nearly unchanged after rising as much as 6% in mid-February. India lost nearly 7% in the quarter after steadily rising above 40% for the last three years.

American markets failed to impress with meager gains. Nasdaq led the three popular indexes with a gain of 0.3% followed by rise of 0.2% in S&P 500 and a loss of 0.9% in Dow Jones Industrial Average.

For the quarter, European markets delivered worst performance in the last four years. Most major markets barely closed in the positive. Sweden and Norway lead the rise in the region with gains of 5.8% and 3.75% respectively. Germany advanced 4.85% and Austria edged up 4.1%. Belgium and Russia gained 1.9% and 2.1% respectively, Switzerland added 2.2% and Italy edged up 0.8%. U.K. barely budged with a gain of less than 0.4%.

In Latin America metals and mining driven companies led the regional indexes. Chile led the region with a gain of 16% followed by 10.3% rise in Mexico. Brazil rose less than 5% ad Argentina gained a fraction at the end of the quarter. High flying Venezuela surged in January but generated substantial losses in the last two months of trading and closed down 7.1%.


Yield on 10-year bond closed at 4.628% and the 30-year bond closed at 4.824%.

Gold advanced $1.400 to close at $669.000 a troy ounce, silver increased 11 cents to end at $13.450 a troy ounce and copper gained $101.00 to close at $6781.00 per metric ton.

Oil lost 16 cents to close at $65.870 a barrel and heating oil advanced 0.080 cents to finish at 187.800 cents a gallon. Natural gas increased 12.1 cents to close at $7.730 per MMBtu. Gasoline went down 2.050 cents to end at 211.500 cents per gallon.

Asian markets closed higher with Japan's Nikkei average striking an upbeat note on inflation data, but Hong Kong fell as investors await fresh earnings news. The advancers were led by Philippines with an increase of 1.64%, Indonesia with a gain of 0.73% and India with an advance of 0.71%. The only decliner was Hong Kong with a decline of 0.11%. Australia gained 0.56%.

European markets finished mixed with deal hopes in the banking sector and some better-than-expected U.S. data offset by a Vodafone Group-led pullback in the telecoms sector. The advancers were led by Germany with an increase of 0.29%, Spain with a gain of 0.25% and France with an advance of 0.05%. The decliners were led by Belgium with a decline of 0.49%, U.K. and Netherlands both with a decrease of 0.26% and Norway with a loss of 0.25%.

Latin America markets finished lower as investors followed release of U.S. inflation data, which exceeded expectations. The decliners were Argentina and Mexico both with a decline of 0.04%. The only advancer was Brazil with a gain of 0.39%. Canada lost 0.68% as oil and gas producers such as Canadian Natural Resources fell amid widespread profit-taking.


[R]2:30PM NY, U.S. Market Movers[/R]

ASUR ((ASR)), Mexican airport operator, said its chairman made a proposal to acquire 42.65% of the company's shares to give himself a controlling stake, sending its shares soaring. Chairman Fernando Chico Pardo would tentatively be willing to pay 56 pesos per share, Asur said, a 12.5% premium to the stock's closing price of 49.79 pesos. Shares climbed 7.2%.

Checkpoint Systems Inc. ((CKP)), maker of technology used for retail security and merchandise labeling, said that its fourth-quarter earnings increased to $18 million, or 45 cents per share, compared with $9.33 million, or 23 cents per share, a year earlier. Excluding tax costs and a capital lease settlement, the company's earnings from continuing operations rose to $20.6 million, or 51 cents per share, from $11.3 million, or 28 cents per share, a year earlier. Revenue rose 12% to $216.3 million versus $192.5 million a year earlier. The company also outlined plans to restate its results for certain prior periods. Shares of the company jumped 15.7%.

Clarient Inc. ((CLRT)) shares climbed 9.8% after the company was initiated with a buy rating at Pacific Growth Equities. Clarient gave a 12-month fair value price estimate for the stock of $3.

Dendreon ((DNDN)) shares soared 170.9% after an advisory panel to the U.S. Food and Drug Administration recommended approval of a product made by the company.

Gander Mountain Co. ((GMTN)) shares rose 14.2% even after the retailer of hunting and outdoor gear said fourth-quarter profit declined. Gander Mountain said that net income for the fourth quarter fell to $15.3 million, or 85 cents per share, from $22.2 million, or $1.45 cents per share, in the year-earlier quarter. Adjusted for special items, earnings were 81 cents per share, below analyst expectations of 97 cents per share. Sales grew 16% to $326.9 million, compared with $280.8 million a year earlier, while same-store sales increased 0.4%.

Image Entertainment Inc. ((DISK)), producer and distributor of home entertainment programming, said it agreed to sell the company for about $95 million dollars. BTP Acquisition Co. LLC, an investor group led by David Bergstein, has agreed to buy the company for $4.40 per share. The transaction is valued at about $132 million. Stockholders owning a total of approximately 38% of Image's outstanding common shares have agreed to vote their shares in favor of the transaction.

Magma Design Automation ((LAVA)) said that it agreed to end all pending litigation with paying Synopsys $12.5 million toward the settlement. Synopsys of Mountain View, Calif., and Magma of Santa Clara, Calif., said they have agreed to release all claims in both California and Delaware and to cross-license the patents at issue in these jurisdictions. Shares climbed 15.5%.

PMC-Sierra Inc. ((PMCS)), maker of chips used in telecom, networking and storage equipment, shares surged 11.1% after the company unveiled a restructuring plan that includes the closure of two facilities. The company said it plans to close to research and development centers in the Canadian cities of Winnipeg and Saskatoon. The closures are expected to result in 175 job cuts and annual savings of $20 million to $24 million. The company also narrowed its first-quarter revenue expectations to the upper half of its previous guidance range of $98 million to $105 million.

Saba Software Inc. ((SABA)), employee training software maker, said it expects to break even or possibly earn a profit of up to 5 cents per share in its fiscal fourth quarter, on sales of $27.5 million to $29.5 million. Excluding charges and expenses, the company said it will earn between 5 cents and 10 cents per share in the quarter. In the fourth quarter last year, the company reported a loss of $3.5 million, or 12 cents per share, on sales of $23.1 million. Shares climbed 5.4%.

All American Semiconductor Inc. ((SEMI)) shares dropped 45.3% after the company said it expects to report a fourth-quarter net loss of $8.3 million to $9.1 million, or $2.07 to $2.26 a share, and a 2006 loss of $11 million to $11.8 million or $2.74 to $2.94 a share. Fourth-quarter revenue came in at $95.8 million, down 16.2% from the same period last year, the company said.

Arotech Corp. ((ARTX)) shares fell 12.1% after the company reported a fourth-quarter net loss of $2.09 million, or 19 cents per share, versus $3.26 million, or 54 cents per share, last year. Revenues declined to $14.1 million versus $15.2 million in the same period a year earlier.

CKE Restaurants ((CKR)), restaurants operator, said its fourth-quarter net income dropped 93% to $10.3 million, or 15 cents per share, after recording a $126 million tax benefit in the year-ago quarter. Revenue climbed 3% to $359 million. Same-store Carl's Jr. sales rose 2.8% and same-store Hardee's sales rose 4.8%. Shares fell 1.1%.

Global Payments Inc. ((GPN)), electronic payment processing company, said it's updated its profit and revenue forecasts for the fiscal year ending in May. The company said it now sees generating earnings in a range of $1.85 to $1.87 a share, excluding the impact of expensing stock options. Such expensing is expected to equate to 11 cents a share as far as net earnings for the current fiscal year go.

Global Payments said it's now anticipating full-year revenue in a range of $1.05 billion to $1.057 billion. Earnings for the third quarter increased to $34.3 million, or 42 cents per share, from $30.1 million, or 36 cents per share, in the year-ago period. Excluding stock option charges, earnings totaled 44 cents per share compared with 36 cents per share. Quarterly revenue rose 16% to $260.4 million versus $225.2 million in the prior year. The current quarter benefited from the addition of an Asia-Pacific joint venture with HSBC in July 2006. The Asia-Pacific segment had sales of $14.7 million in the quarter.


[R]1:30PM NY - 6:30PM Frankfurt – European markets lost early momentum as markets closed. Rising oil and metals prices helped the respective sectors but dragged down broader averages. Merger activities reached feverish pace in the first quarter, but failed to generate broader advances.[/R]

European market closed mostly lower but larger markets managed to hang on to their earlier gains of the day. Germany and Spain gained 0.3% but UK, the Netherlands and Norway lost 0.25%.

Banking stocks in Germany traded higher led by 3.2% rise Commerzbank, Deutsche Postbank and Deutsche Bank rose 0.8%. Citigroup said in a report that it is interested in acquisition in the country lifting banking stocks in Germany.

U.K. pharmacy chain Alliance Boots closed up 0.5% on the news that company’s deputy chairman Stefano Pissa teamed up with KKR to offer revised bid of 1,040 pence per share valuing the company at 10 billion pounds. Kingfisher, home improvement retailer, rose 3% on the media report that investment arm of Goldman Sachs is planning to make a takeover bid.

After one day hiring investment banker, Spain’s Iberian air, received takeover interest from private capital group TPG Capital valuing the company at 3.6 euros, lower than the current price of 3.8 euros. The stock fell 1.8% at close after gaining 25% in the last eight trading days.

U.K. based hedge fund operator Man Group said that it plans to spin-off its brokerage group and list on New York Stock Exchange and offer the proceeds of the offering to shareholders. The company also affirmed that earlier earnings guidance for the current quarter at $1.55 billion.

Cap Gemini, software service provider rose 2% on broker upgrade in France.

Mobile telecom operators came under pressure on the announcement from Vodafone stating that operating margins will be remain depressed till the end of the year 2008. Vodafone dropped 4.5% in the UK trading and dragged other telecom operators in Germany and France. Deutsche Telekom lost 0.2% and Teliasonera lost 2%.


[R]12:30PM NY – Market averages turn negative at mid-day trading.[/R]

Market averages fell by mid-day trading after rising as much as 0.5% in the morning trading. Tech, financials and energy stocks reversed the earlier course and traded in the negative territory.

U.S. construction spending rose in February 0.3% followed by a drop of 0.5% in January according to Commerce Department. Private construction was up 0.2%, residential construction was down 1% and non-residential construction was up 2.3% from January.

The U.S. dollar came under pressure as the Commerce Department decided to levy additional duties on Chinese made goods to ‘compensate for Chinese subsidies.’ The dollar fell 0.5% against yen to 117.30 and 0.3% against euro to 1.33.

The Commerce Department decided to add the additional duty on the preliminary determination which they allege that Chinese producers and exporters of coated free sheet paper received countervailable subsidies ranging from 10.90 to 20.35 percent. The press release from the department added that “from 2005 to 2006, imports of coated free sheet paper products from China increased approximately by 177 percent in volume, and were valued at an estimated at $224 million in 2006.”


[R]11:00 NY – The U.S. government report forecasts record corn crop planting since World War II.[/R]

Across the U.S. farmers are planting corn in record numbers, according to Prospective Planting report released by the Department of Agriculture. The report forecasts that 90.5 million acres will be planted in the current year, up from 78.3 million in 2006. The last record corn season was in the year 1944 when 95.5 million acres were planted. The report also stated that soybean crops are expected to fall 11% to 67.14 million acres.

Corn prices in the year 2006 jumped 74% and are expected to remain at elevated level. Ahead of the release of the report the corn prices were trading higher in Chicago trading. Soybean prices jumped.

The Prospective Planting report is based on survey of 86,000 farmers conducted during the first two weeks of March. Farmers in the U.S. harvested 10.535 billion bushel of corn last year, third largest crop ever and soybean production rose 4.1% to 3.2 billion bushels. If farmers do plant the estimated acres and normal weather pattern remains for the year than crop is likely to exceed 12.3 billion bushel, up 4.8% from a year ago according the report. About 20% of the corn production is likely to be used for ethanol production.

Ethanol has been a mixed blessing for farmers. While demand from ethanol acts as a big boosts for the corn demand but it also raises prices of land and production costs for farmers. Approximately 5 billion gallons of ethanol is expected to be produced by 120 plants in the U.S. generating 3% of gasoline demand in the country. Crude oil consumption is likely to rise 1.8% in the U.S. despite record oil prices.

[R]10:15AM NY – After 30 minutes of trading New York maintains a positive bias. Oil climbs above $66 per barrel and USDA report showed that farmers plan to plant largest amount of corn production since the second World War.[/R]

Market averages made a steady climb in the first thirty minutes of trading in New York. Personal spending and income report for the month of February showed a rise of 0.6% in both but savings rate declined at 1.2% in the month.

Volatile oil price in the first hour of trading rose 55 cents to $66.57 per barrel as tensions between Iran and Britain continued in the Middle East. British government said that it will escalate the issue if sailors are not released and Iran wants a guarantee that Britain will not cross its borders again.

In trading tech stocks traded higher, slightly. Apple, Microsoft, IBM, Cisco and EMC had less than 0.4% gains. Dell dropped 2% on the news that the company has discovered evidence of accounting misconduct and errors and will delay annual report and 10K report filing. Red Hat said that it expects to earn between 67 cents and 72 cents in the current fiscal year, stock fell 1% after advancing at the opening.

Oil complex stocks rallied in the wake of higher price of oil. Valero, Exxon and Tesoro advanced better than 1%. Conoco Phillips and Marathon Oil declined a fraction.

Brokerage companies Goldman Sachs, Morgan Stanley, Merrill Lynch and Lehman Bros gained close to 1% after thirty minutes of trading.

Nymex ((NMX)) rose 79 cents to $136.46 on an upgrade from UBS on increased volatility in the oil trading.

[R]9:45AM NY – Personal spending and income rose in February, market averages struggle at the opening.[/R]

The Commerce Department reported that personal spending in February rose 0.6% and so did personal income in the month. Economists were looking for a rise of less than 0.4%. After adjusting for price inflation in gasoline and other food products the personal spending rose only 0.2% in February after gaining 0.3% in January. In January, personal income rose at 1% and personal spending rose at 0.5%.

Stronger spending and income put asides fears of economic slow down in the morning trading, however, economists are still revising their estimates of economic growth for the year to less than 2.5%. Worries related to slow down in housing and lack of rebound in capital spending from businesses was cited as prime reasons for lowering estimates.

The report also noted that the measure of inflation index, core inflation, excluding food and energy prices, rose 0.3% in February and for the last twelve months rose at 2.4%, higher than the Fed’s preferred target range of less than 2%.

The report also said the personal savings rate remained unchanged and declined at a rate of 1.2% in February.

[R]9:30AM FTSE 100 trades lower Friday on weak Vodafone and Resolution.[/R]
The UK market was lower on Friday. By mid-morning, the FTSE extended its early losses to move 26.4 points, or 0.4% to 6,298.1.

Advancers

M&A activity provided some respite for the market. Home improvements retailer Kingfisher led the FTSE gainers, 2.5% higher on reports that Goldman Sachs private equity division was mulling a bid for the owner of B&Q. Scottish & Newcastle traded 0.6% higher following the 12% surge in the brewing giant share price on Thursday, due to by bid speculation.

Rentokil Initial advacned 2.5% as an offer from United Technologies Corporation for its Initial Electronic Security Group, is looming, valuing the unit at 595 million pounds. News of KKR and Pessina improved offer for Alliance Boots to 10.40 pound-per-share pushed its shares slightly higher, up 0.3%.

Man Group added 1.6% stronger after the UK-listed hedge fund group said it planned to demerge its US brokerage business and list it in New York.

Decliners

Vodafone Group shed 3.5% after the mobile phone company trading update showed great-than-expected pressure on UK profit margins. Downgrades for earnings from the UK business this year were likely but as these operations only generate about 9% of group earnings, the share price reaction looked overdone.

Resolution lost 5% as it appears possible takeover talks had ended. The insurer announced it continued to assess possible acquisitions and business combinations that would not constitute an offer for the company.

FKI fell 3.4% after the engineering company stated trading in the second half of the year was in-line with expectations but unfavourable exchange rate movements would reduce full-year operating profits.


[R]9:00AM Asian markets mostly advanced Friday with Japan up on inflation data.[/R]
Asian markets ended moslty higher on Friday. In Tokyo, the Nikkei 225 closed 0.1% higher to 17,287.65. Mitsui Fudosan, up 2.4%, led gains among the interest-rate sensitive property stocks as data released Friday showed consumer price index in Japan dropped in February for the first time in 10 months.

Exporter such as Honda Motor also advanced as data showed that the U.S. economy grew faster than thought previously in the final quarter of 2006. Honda rose 1%, while Sony gained 0.2%. Shares of Mitsui Engineering & Shipbuilding added 2.5% higher after reports that the company is likely to report an 89% rise in profit for the current fiscal year.

Hong Kong Hang Seng Index dropped 0.1% to 19,800.93. China Shanghai Composite index also ended down 0.4% to 3183.98. PetroChina advanced, rising 1.8% and tracking the move higher in crude-oil prices tied to Persian Gulf tensions between the U.K. and Iran. CNOOC, the third-largest oil producer by output in China, advanced 0.3%. The oil large-cap reported late Thursday that net profit rose 22% last year.

Australian S&P/ASX 200 gained 0.6% to end at 5995.00, while South Korean Kospi index advanced 0.1% to finish at 1,452.55. Singapore Straits Times Index gained 0.3% to close at 3,231.24. Taiwan Weighted Price Index ended 0.5% higher at 7,884.41. Alinta in Sydney, gained 2.6% as the energy infrastructure company recommended a $6 billion offer from Babcock & Brown and Singapore Power.

[R]8:00AM NY-7:00PM Mumbai Sensex gains on auto, pharma stocks.[/R]
The Sensex on BSE finished 92.44 points, or 0.71%, higher at 13,072.10. The market-breadth was strong as there were two advancers for each decliner. As 1,676 stocks advanced, 864 declined, and 70 stocks remained unchanged. Of the 30 stocks in the Sensex, 23 advanced, while the rest declined. The turnover on BSE was Rs 2,974 crore, lower than Rs 3,692.27 crore on Thursday. On NSE, the turnover was Rs 7,517.79 crore, compared with Rs 10,009.89 crore on Thursday.

Economic news

The wholesale price index in India increased 6.46% in the 12 months to March 17, matching the increase in the previous week, data showed on Friday. The figure was slightly below a forecast of 6.50%.

The foreign investment regulator of India has delayed a decision on Vodafone plans to buy controlling stake of Hutchison Telecom in Hutchison Essar. After a meeting of the Foreign Investment Promotion Board, Finance Secretary Ashok Jha said that the board had asked for more details on the deal.

Trade Minister Kamal Nath admitted on Friday that Indian import duties on wines and spirits are high and added he expects the situation to be corrected. The European Union is escalating a dispute with India at the World Trade Organisation, over what it sees as unfair trade barriers for its wine and spirits.

Trading highlights

Indiabulls Real Estate was the most-active stock with a turnover of Rs 174.55 crore followed by Renuka Sugar and Reliance Industries.

Advancers

Dr.Reddy''s rallied 3.1% to Rs 728 and the other pharma large-caps Ranbaxy Laboratories edged up 2.1% to Rs 353. NTPC surged 3% Rs 150, respectively and ITC soared 2.5% to Rs 150. NTPC announced it had signed an agreement with KFW, Germany, for a term-loan of $100 million. The loan agreement, which state-run NTPC signed, is an unsecured facility without sovereign guarantee bearing variable interest linked to LIBOR, and has a maturity of 10 years.

Tata Motors rose 1.8% to Rs 728. Tata Motors plans to set up one more automobile plant in the country within two years. Gujarat Ambuja, Tata Steel and Satyam rallied around 2% each to Rs 107, Rs 450 and Rs 470, respectively. Index heavyReliance Industries advanced 1.22% to Rs 1,372.60, as 5.66 lakh shares were traded on BSE. The stock hit a high of Rs 1,373.50.

Decliners

It stocks were heavily hit by the rise of the rupee this week. The rupee touched a seven-year high against the dollar. IT large-cap Wipro led the decliners, down 1.3% to Rs 558, on a volume of 2.16 lakh shares.

Other declineers included HDFC, down 1% to Rs 1,520, TCS, dipping 1.3% to Rs 1,231 and BHEL, losing 0.8% to Rs 2,261.

[R]6:30AM European stocks were lower on Friday on financials and telecom stocks.[/R]

European markets were lower on Friday. By mid morning, Frankfurt Xetra Dax was fractionally lower at 6,893.94, the CAC 40 in Paris fell 0.2% to 5,618.07 and London FTSE 100 shed 0.3% to 6,303.5.

Advancers

German financial stocks advnaced on takeover speculation on comments from Citigroup earlier in the week that hinted the US bank was looking possible targets in Germany. Commerzbank gained 2.8%, while Deutsche Bank added 1%, and Deutsche Postbank climbed 1.6%.

Decliners

Britain Vodafone led telecommunications stocks down as it warned of tough competition and regulatory pressures through to 2008. The stock fell 3.3%. Telekom Austria fell 1.9% after Bear Stearns lowered its target price. Shares in Telenor fell 1.4%.

Oil and gold

Oil prices kept rallying Friday as a standoff between Britain and Iran was taken to the United Nations and a nervous market worried that oil exports could be affected by the crisis. After settling at a six-month high a day earlier, crude oil futures rose another 45 cents to $66.48 a barrel on the New York Mercantile Exchange.

Gold opened Friday at a bid price of $662.90 a troy ounce, up from $658.70 late Thursday.

Currencies

The euro fell slightly against the dollar on Friday, a day after it gained on the U.S. currency following a dim growth report on the U.S. economy. The euro bought $1.3318, dropping marginally from $1.3335 in late New York trading on Thursday. The British pound also lost ground to the dollar, dropping to $1.9570 from $1.9619 in New York. The dollar edged up slightly on the Japanese yen, to 118 yen, from 117.9 the previous day.

[R]5:30AM Gold finishes lower, while copper and crude oil advance.[/R]

June gold shed $5.30 to end at $667.60 a troy ounce on the New York Mercantile Exchange, while May silver lost 11.5 cents to close at $13.34 an ounce. July platinum fell $10.20 to close at $1,247.60 an ounce, while June palladium was off $1.85 to settle at $356 an ounce. The most-active May copper contract gained 2.4 cents to settle at $3.0865 per pound.

The May crude oil futures contract gained $66.50 a barrel before finishing at $66.03 a barrel, up $1.95. April heating oil surged 4.98 cents to finish at $1.8772 a gallon. April gasoline soared 7.83 cents to $2.1355 a gallon. Front-month May natural gas futures, though, lost 6.3 cents to close at $7.609 a million British thermal units.

On the New York Board of Trade, Arabica coffee futures declined, reaching the lowest levels in a week an a half, on selling by funds and locals. May coffee finished 2.1 cents lower at $1.1060 a pound, and July coffee closed 2 cents weaker at $1.1350 a pound. Futures on raw sugar in foreign ports dipped to six-month lows as funds sold the front months. May sugar ended 0.27 cents lower at 9.85 cents a pound, while July sugar closed 0.24 cents weaker at 9.96 cents a pound.