Stock Futures Predict Flat Opening

Elena
10 Apr, 2007
New York City

U.S. stock futures pointed to a flat opening on Tuesday, reflecting cautiousness ahead of the Q1 earnings season and broker upgrades for tech companies Oracle, Applied Materials and Advanced Micro Devices. Aluminum producer Alcoa will be in focus before it reveals its Q1 results, due after the close. Dow Chemical, which surged Monday on speculations that it is the target of a $50 billion leveraged buyout, is likely to decline after it said it is not interested in such offer.

[R]9:00AM U.S. stock futures pointed to a flat opening ahead of Q1 earnings season.[/R]
U.S. stock futures pointed to a flat opening on Tuesday, reflecting cautiousness ahead of the Q1 earnings season and broker upgrades for tech companies Oracle, Applied Materials and Advanced Micro Devices. Aluminum producer Alcoa ((AA)) will be in focus on the last trading session before it reveals its Q1 results, due after the close. Alcoa was the best performing Dow component during Q1 and is expected to post a profit of 75 cents per share. Dow Chemical ((DOW)), which surged Monday on speculations that it is the target of $50 billion leveraged buyout, is likely to decline after it said it''s not interested in such offer. Citigroup ((C)) will also attract attention due to a report that the world''s top bank will cut or reassign 26,000 people.

Among companies drioven by analyst comments, Applied Materials ((AMAT)) rose 1.9% in pre-open trade after Banc of America Securities upgraded the chip equipment maker to buy from neutral. Oracle Corp. ((ORCL)) rose 1.8% after Goldman Sachs upgraded the software maker to buy from neutral. As there are no major economic data due out today, investors will look to speeches by three Federal Reserve officials to get a better idea of the central bank's views on interest rates. Oil prices rebounded after falling nearly $3 a barrel on Monday amid tensions with Iran and forecasts that U.S. energy inventory figures would continue to decline. S&P 500 futures eased 0.5 of a point at 1,454.00 and Nasdaq 100 futures rose a half point at 1,824.50. Dow industrial futures rose a point.


[R]8:15AM Oracle shares gained on brokerage upgrade.[/R]
Oracle ((ORCL)) gained 1.24% in pre-market trading after it was upgraded to buy from neutral at Goldman Sachs, and added to firm''s Buy List, citing relative valuation and belief that the company''s applications and middleware businesses will gain market share. The brokerage also raised the stock''s 12-month price target to $22 from $20 due to a much strengthened product set across database, applications, middleware. The stock closed Monday down 10 cents at $18.57. Advanced Micro Devices ((AMD)) was upgraded to buy from neutral at UBS, citing belief that the chipmaker is poised for a rebound in the second half of 2007, as AMD improves its mix and launches Barcelona for servers


[R]8:00AM NY-7:00PM Mumbai Sensex ends higher as HDFC supports market.[/r]
The Sensex on BSE finished 11.80 points, or 0.09%, higher at 13,189.54. The market-breadth was positive as there were three gainers for every two decliners. For 1,576 stocks that advanced, there were 1,004 that declined and 69 stocks which remained unchanged. Of the 30 stocks in the Sensex, 18 advanced, while the rest declined. The turnover on BSE was Rs 4,185 crore, much higher than Rs 3,092.92 crore on Monday. The turnover on NSE was Rs 8,441.09 crore, also higher than Rs 6,286.86 crore on Monday.

Economic news

Arcelor Mittal has made a bid of around Rs 2,200 per share for 51% stake of Mitsui Corp in Sesa Goa, the biggest private exporter of iron ore in India. The bid of Arcelor Mittal is slightly higher than those from other contenders like the Aditya Birla group, believed to have bid around Rs 2,000 per share.

Finance Minister P Chidambaram on Tuesday is confident that the revised target of Rs 2,29,272 crore for the direct tax collections during 2006-07 fiscal would be achieved. The latest figures show, that Rs 2,23,797.1 crore was collected, comprising Rs 1,41,915.4 crore of corporate tax, Rs 71,011.4 crore of personal income tax, Rs 5,331.7 crore of fringe benefit tax, Rs 4,729.5 crore of securities transaction tax and Rs 505.4 crore of banking cash transaction tax.

The slowdown in the US economy together with domestic factors such as service tax on leased and rented premises and imposition of minimum alternate tax may weigh on revenues and earning growth rates of all major IT companies of India, including Infosys, Satyam, TCS and Wipro.

Trading highlights

Indiabulls was the most-active stock with a turnover of Rs 479.55 crore followed by Indiabulls Real Estate and Tata Steel.

Advancers

Housing finance company HDFC led the advancers, up 3.% to Rs 1608, on a volume of 1.15 lakh shares. Tata Motors advanced 2.5% to Rs 721. Four block deals of 2.53 lakh shares were traded in the stock for an average Rs 708.37 per share. Tata Motors had signed an agreement with Iveco in February, and is planning to distribute its trucks through the worldwide distribution network of the Italian company. Reciprocally, Tata Motors will sell select Iveco models, especially their light commercial vehicles in India.

ITC rallied nearly 3% to Rs 160, and Hindustan Lever added 2.5% to Rs 209. Other gainers included HDFC Bank, Ranbaxy and Grasim which advanced around 2% each to Rs 992, Rs 358 and Rs 2,235, respectively. BHEL ended up 1.6% to Rs 2,463.

Decliners

IT stocks lost ahead of their March quarter results. Satyam dipped 3.5% to Rs 445 and was the leading decliner. Wipro shed 2.4% to Rs 548, and Infosys slid 2.2% to Rs 1,998. TCS dropped 1.6% to Rs 1,197. Infosys fiscal year 2008 guidance is the next major trigger for the market. The sharp advance of the rupee in late-March 2007 and early April 2007, and also uncertain US economic outlook, have created concerns that the fiscal year 2008 guidance by Infosys Technologies may turn out negative.

Index heavy Reliance Industries declined 0.13% to Rs 1,382, on 3.23 lakh shares traded on BSE. Dr.Reddy and Bajaj Auto were down 1% each to Rs 720 and Rs 2,270. NTPC and Larsen & Toubro also declined around 1% each to Rs 158 and Rs 1,582, respectively.


[R]6:30AM European equities were higher on Tuesday on merger activities.[/R]
European markets were higher in early trading on Tuesday. By mid morning, Frankfurt Xetra Dax added 0.5 % to 7,132.27. In Paris, the CAC 40 was 0.1 % higher at 5,748.12 and London FTSE 100 was 0.2 % higher at 6,410.5. National benchmarks rose in 16 of 18 markets in western Europe.

Advancers

PPR, the French fashion retailer, announced it would make a public tender offer for German sportswear maker Puma after agreeing to buy a 27% stake in the company from Mayfair, the largest shareholder of Puma. Puma welcomed the bid, which is valued at 330 euro a share adding it would recommend the deal to shareholders. Puma surged 9.6%, while PPR shares added 2.9%. Shares in the main rival of Puma, Adidas gained 2.5% on speculation it could also become involved in fashion sector consolidation

ABN Amro also advanced on the Dutch market, gaining 1.5% after press reports over the weekend, including that the Dutch regulator would mull a break up of the group and talk of other bidders still waiting if exclusive talks with Barclays should not succeed.

German carmaker DaimlerChrysler rose 3% after US billionaire Kirk Kerkorian offered $4.5 billion for the company Chrysler division. Mr Kerkorian, once the largest shareholder of Chrysler, asked the German company for 60 days exclusive rights to carry out due diligence.

Decliners

A report that a consortium led by CVC Capital has offered a 582 pence-a-share bid for J. Sainsbury proved not enough to boost shares in the supermarket operator after an earlier report that the controlling family will not consider a bid below 600 pence a share. Shares in Sainsbury slipped 1.3% in London.

Oil stocks were hurt by weaker oil prices. Shares in BP lost 0.7% and France Total also lost 0.7%. Tobacco company also Altadis lost 0.5% after it rejected Imperial Tobacco 12 billion euro offer. Imperial Tobacco shares dipped 0.8%.

Oil and gold

Crude oil advanced from a 12-day low in New York after Iran announced it has started to enrich uranium on an industrial scale, heightening tensions in the region. Crude oil for May delivery rose 48 cents, or 0.8%, to $61.99 a barrel in after-hours electronic trading on the New York Mercantile Exchange and was at $61.78 in early trade in London. Brent crude for May settlement increased 54 cents, or 0.8%, to $67.13 a barrel in electronic trading on the ICE Futures exchange.

Gold gained on speculation declines in the dollar will boost investor demand for the metal as an alternative to stocks and bonds. Silver also gained. Gold for immediate delivery gained $5.75, or 0.9%, to $676.50 an ounce in early trade in London. Silver advanced 8.99 cents, or 0.7%, to $13.835 an ounce. Palladium rose $3.50, or 1%, to $358.50 an ounce, after earlier advancing to $359.50, the highest since June 5. Platinum fell $2 to $1,249.50, erasing an earlier gain to $1,260, the highest since Nov. 21.

Currencies

The dollar declined against other major currencies in European trading Tuesday as markets reopened following the long Easter weekend. The euro traded at $1.3415, up from 1.3360. The British pound traded at $1.9712, up from $1.9610. The dollar bought 119.09 Japanese yen, down from 119.30.