Nasdaq Up 4.3%, S&P 500 Up 4.5%

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

Market averages closed lower as worries of inflation overshadowed earnings. Nasdaq closed lower led by a weakness in tech stocks but managed to close 4.3% up in April, S&P 500 gained 4.5% and Dow jumped 5.7% in the month. The broader market paid attention to lower than expected rise in personal income and speding report released by the Commercce Deaprtment. China raised its reserve requirement for banks to cool the fast growing economy and Indian rupee surged 5% in April against dollar.

[R]4:30PM NY, 10:30 PM Frankfurt, 1:00AM Mumbai – Global Markets Update[/R]

U.S. averages fell on the weakness in tech stocks and weaker than expected March rise in personal income, spending and disposable income. Over the weekend China increased reserve requirement for bank to 11% from 10%, its seventh hike in the last twelve months. Largest Aluminum company Chalco IPO rose three-fold in its first day trading in Shanghai. Indian rupees extended its eight week rally and gained 5.3% against dollar in April, best monthly gain since 1973.


U.S. bonds yields fell and 10-year bond closed at 4.63% and 30-year bond closed at 4.81%.

Oil in New York trading fell 75 cents to close at $65.71 per barrel, natural gas rose 3 cents to close at $7.863 MBtu and gasoline rose at 8 cents to close at 244.05 cents per gallon.

Gold rose $1.70 per troy ounce to close at $683.50 and silver price fell 11 cents to close at $13.57 per ounce. Copper rose $99 per metric ton to close at $7,786.

Asian markets closed lower led by 1% loss in Hong Kong, Singapore and Indonesia. Japan was closed on the account of a public holiday. China Mobile and China Construction Bank fell 1.5% and China Industrial & Commercial Bank fell 1.0% on lower trading volume in Hong Kong. India fell 0.3% on worries related to rising rupee against dollar hurting export margins. ICICI Bank fell 8% on the news that the company plans to raise $4.5 billion through a public offering and Reliance Telecom surged on strong revenue and subscriber growth. Oil stocks in Australia, China and Indonesia fell.

European Markets closed higher led by 0.63% rise in Norway and 0.5% gain in the U.K. and France markets. Germany, Italy and Netherlands gained 0.4% but Spain lost 0.2%. Turkish market declined 6% on heavy volume but recovered to close at 4.9%. The threat of military intervention spooked the market. Eni, Italian oil company purchased oil properties from Dominion Resources for $4.8 billion. Cable & Wireless rose 2.4% on newspaper report that the company may be up for sale. Carlsberg rose on broker comments that the company may buy more beverage and spirit companies around the world. The Skanska AB advanced on the recommendation from Deutsche Bank.

Latin American Markets closed lower led by 1.95% decline in Argentina, 1.3% loss in Mexico and 0.55% decline in Brazil. Brazilian mobile operators were in demand on a deal in Europe over the weekend. Telefonica agreed to purchase indirect stake in Telecom Italia that will facilitate its control of TIM Participacoes in Brazil. Another Brazilian operator Viv Participacoes was up on the possibility of merger. Mexico’s finance minister said that last week rise of interest rate to 7.25% may have been premature when the economy is expected to slow this year.


[R]2:45PM NY – U.S. Market movers.[/R]

Hilton Hotels corp. ((HLT)) reported first quarter earnings of $95 million compared to $104 million a year ago or earnings per share of 23 cents vs. 26 cents a year ago. The revenue in the quarter rose 29% to $1.86 billion. The results include $30 million gain of asset sales and currency translation loss of $8 million. The company earnings would have been 20 cents vs. 15 cents in the previous year when non-recurring items and Hilton International acquisition was assumed at the beginning of the year 2006. The company stock declined 2.8% on the news.

Humana ((HUM)), health insurance provider, reported $71.2 million compared to $83.7 million a year ago or 42 cents per share vs. 50 cents per share a year ago. In the previous year the company had reported a one time gain of 19 cents or $51.7 million on investment sale. The company revenue in the quarter rose 32% to $6.2 billion from the previous year. The company also revised its full year earnings guidance to $4.10 and $4.25 per share range from $4.00 to $4.10 per share. Commercial medical insurance membership was down 1% from the end of the year 2006 and was unchanged from a year ago. Membership in the stand-alone drug plan rose to 3.5 million from 2 million a year ago. Membership in the Medicare Advantage rose to 1.1 million, up 11% from the end of the year 2006.

Wm. Wrigley Jr. Co. reported first quarter income of $142.7 million compared to $111.9 million a year ago or 52 cents vs. 40 cents a year ago. The company revenue in the quarter rose 17% to $1.26 billion. Sales in the U.S. rose 3% and gained 27% in Europe, Middle East, Africa and Asia. The company stock rose 11% in the early morning but settled at 6% advance in the afternoon trading.


[R]1:00AM NY, 5:00 PM Frankfurt European stocks closed higher, boosted by energy and utility stocks.[/R]

European stock markets finished in the green on Monday, driven higher by gains in the shares of Cable & Wireless and strength among energy-producing conglomerates and utility companies. Stock exchange deals, oil, bank and telecom stocks were in M&A action today.

Before paring gains, Cable & Wireless rose as much as 5.5% amid reports that the telecommunications company is considering the sale of its British and international businesses. Oil and gas companies advanced, with BP rising 0.7% on bid speculation. Eni rose 0.6% after the Italian oil group agreed to buy Gulf of Mexico fields from Dominion in a $4.8 billion deal. Telecom Italia fell 2.3% after Spanish phone giant Telefonica and a group of Italian financial firms bought 100% of its largest shareholder.

Among companies driven by analyst comments, Next shares rose 2% after Morgan Stanley upgraded the company to overweight from equal-weight and raised its target price. The German DAX Xetra 30 increased 0.4% at 7,408.87 and the French CAC-40 advanced 0.5% at 5,960.04, and the U.K.'s FTSE 100 rose 0.5% at 6,449.20. The Turkish stock market dropped more than 6% after the military threatened to intervene in upcoming elections.


[R]11:30AM U.S. stock averages traded mixed, with the Dow hitting a new record high.[/R]

U.S. market averages traded mixed in late morning trading amid economic reports which revealed tame inflation, as well as weak spending, manufacturing and construction data. The Dow hit another record high, boosted by optimism over corporate profits.

The blue-chip average was supported by gains for 3M ((MMM)) and Procter & Gamble ((PG)) which advanced 1% and 2%, respectively. Dow member Citigroup ((C)) was another notable advancer, moving up 2% amid reports that the bank may become the target of activist hedge funds. Again on the Dow, Verizon Communication ((VZ)) added 0.8% after it posted better-than-expected quarterly earnings and revenue.

By sector, utilities oil and hardware stocks stood out among gainers, while transportation, software and gold shares declined. Financial stocks also gained. Merrill Lynch ((MER)) rose 0.8% after announcing a plan to buy back up to $6 billion of its own stock.

In merger-and-acquisition news, International Securities Exchange ((ISE)) surged 42% amid reports that it is in talks to be acquired by Deutsche Boerse for $2.8 billion. The price amounts to $67.50 per ISE share, representing 48% over ISE's closing price of $45.72 on April 27. New York-based ISE, in a separate statement, said the final terms are still being negotiated.

The Dow was up 15.60 points, or 0.12%, at 13,136.54. The Standard & Poor's 500 Index was up 1.18 points, or 0.08%, at 1,495.25. The Nasdaq Composite Index was down 0.48 point, or 0.02%, at 2,556.73.


[R]9:45AM U.S. markets opened lower, despite positive news from Merrill Lynch and Verizon.[/R]

Wall Street opened in the negative on Monday, as investors digested data which showed tame inflation and spending growth. Upbeat earnings from Verizon Communication and a share buyback from Merrill Lynch failed to give a strong boost. Verizon ((VZ)) quarterly results topped expectations but the stock added only 0.2%. Merrill Lynch ((MER)) inched up 0.2% on plans to buy back up to $6 billion of its own stock under a new share repurchase program. The company completed a $5 billion buyback program in October 2006 and a $6 billion program in February 2006.

Among companies in focus, Delta Air Lines ((DALRQ)) tumbled 66% as the U.S. air carrier emerged from Chapter 11 bankruptcy protection a year ahead of schedule after a 19-month restructuring. The airline said that now it has better positions to compete as a result of its turnaround plan. In merger-and-acquisition news, International Securities Exchange ((ISE)) surged 41% amid reports that it is in talks to be acquired by Deutsche Boerse for $2.8 billion. In another deal, Dominion Resources ((D)) agreed to sell its Gulf of Mexico fields to Eni ((E)) for $4.76 billion.

On the economic news front, the Commerce Department said that core personal consumption index rose 2.1% in the past 12 months, but came down from a 2.4% rise in February. U.S. consumer spending grew a little less than expected, while personal incomes rose slightly higher than forecast. In the first hour of trading, the Dow Jones industrial average fell 13.17, or 0.10%, to 13,107.77. The Standard & Poor's 500 index was down 1.65, or 0.11%, to 1,492.42, and the Nasdaq composite index was down 7.73, or 0.30%, to 2,549.48.

[R]Personal income rose 0.7% in March, while personal spending added 0.3%.[/R]
Monday morning, the Department of Commerce released its report on personal income and spending in the month of March, showing that personal income rose more than expected while personal spending rose less than expected. The report showed that personal income rose 0.7 percent in March, matching an upwardly revised 0.7 percent increase in February. The increase came in modestly above economist estimates of a 0.5 percent increase. The stronger than expected increase in personal income came as private wage and salary disbursements increased by $38.3 billion in March compared with an increase of $25.3 billion in the previous month.

At the same time, the Commerce Department said that personal spending rose 0.3 percent after an upwardly revised 0.7 percent increase in February. Economists expected personal spending to rise 0.5 percent compared to the 0.6 percent increase originally reported for the previous month. With the growth in personal income outpacing the growth in personal spending, the report also showed some improvement in personal saving, which was a negative $79.3 billion in March compared with a negative $118.8 billion in February. The Commerce Department also said that its closely watched reading on core consumer prices, which exclude food and energy prices, rose at an annual rate of 2.1 percent in March compared to the 2.4 percent year-over-year growth seen in the previous month.


[R]9:30AM FTSE 100 advances in mid-day trading Monday on Cable & Wireless.[/R]

The UK benchmark index was higher in mid-day trading on Monday. The FTSE 100 gained 0.65% to trade at 6,460.

Economic news

In economic news, UK mortgage approvals jumped to 75,098 in March, a four-month high, far surpassing February’s 54,659, according to data from the British Bankers Association out Monday. But the figure was still well below the equivalent month in 2006 when approvals topped 85,000, suggesting the three rate rises since last August are beginning to bite.

Advancers

Cable and Wireless leads the advancers, up over 4% as the company is considering a break-up through separate sales of its British and international businesses to private equity groups or foreign rivals in Europe or India.

Clothing retailer Next also surged after Morgan Stanley boosted its recommendation on the stock to overweight from equal-weight and upped its price target.

Royal Bank of Scotland, Barclays and ABN Amro are still in focus as their bid triangle unfolds. Reports suggested ABN Amro faces a lawsuit if it reneges on a deal to sell its LaSalle offshoot to Bank of America, which was agreed as part of the merger terms with Barclays. Barclays was 0.76% higher.

Miners staged a good performance with Antofagasta, up 0.71% and Xstrata, 1.88% higher. Fellow mining company Kazakhmys announced first quarter copper cathode production rose 12% and copper in concentrate production increased by 10% compared to the same period in 2006. Shares of Kazakhmys rose 0.61%.

Decliners

There were very few decliners including metal treatment group Bodycote which plunged 8.62% after the ending of Swiss group Sulzer bid interest on Friday. Royal Bank of Scotland is also slightly lower, down 0.21%.


[R]9:15AM U.S. stock futures turned higher on inflation data.[/R]

U.S. stock futures moved slightly higher, lifted by upbeat earnings reports and data which showed that core inflation declined. The Commerce Department said that U.S. consumer spending grew 0.3% in March while inflation pressures declined. Personal income rose 0.7% in March, higher that the 0.6% expected by analysts. Core inflation was flat in March.

Among pre-market highlights, RadioShack ((RSH)) jumped 8.2% after it posted Q1 earnings rise on lower costs. The electronics retailer said net income jumped to 31 cents per share, up from 6 cents a year earlier, beating estimates of a profit of 14 cents per share. Humana ((HUM)) posted a 15% drop in Q1 profit but beat analyst expectations. The health insurer also raised its full-year earnings forecast.

In other corporate news, Merrill Lynch ((MER)) said it would buy back $6 billion in shares. Yahoo ((YHOO)) agreed to buy the 80% it didn't already own of Right Media for $680 million in cash and stock. Yahoo shares were flat. S&P 500 futures rose 1.7 points at 1,503.60 while Nasdaq 100 futures were down a half point at 1,906.25. Dow industrial futures rose 3 points. Stock futures moved higher after the economic data was released.


[R]8:15AM Verizon Communications posted Q1 profit decrease.[/R]

Verizon Communications Inc. ((VZ)) posted Q1 earnings of $1.5 billion, or 51 cents a share, compared with a year-ago profit of $1.63 billion, or 56 cents a share. The latest results include an extraordinary loss of $131 million, or 5 cents a share, related to the Venezuelan government's nationalization of telecommunication services. The company said its net income before special items came to $1.63 billion or 56 cents a share, down from profit of $1.75 billion, or 60 cents a share last year.

Operating revenue rose 6.4% to $22.58 billion from $21.23 billion a year ago. Analysts had been expecting a profit of 53 cents a share on revenue of $22.49 billion. The company said its Verizon Wireless operations helped increase the company's total number of customers by 14.5% to 60.7 million. Verizon also said it expects strong demand for its FiOS TV offering, adding a net 141,000 new customers in the quarter. The stock added 1.2% in pre-market trading.


[R]8:00AM NY-7:00PM Mumbai Sensex ends slightly lower on a late recovery.[/R]

The Sensex on BSE finished 36.21 points, or 0.26%, lower at 13,872.37.

The market-breadth was positive as there were close to three gainers for every two decliners. As 1,403 stocks advanced, 1,071 declined and 75 stocks remained unchanged. Of the 30 stocks in the Sensex, 18 advanced, while the rest declined. The turnover on BSE was Rs 3,255 crore, lower than RS 3,770.65 crore on Friday. On NSE, the turnover was Rs 7571.21 crore, compared with Rs 8,222.24 crore on Friday.

Economic news

The government today announced that it was considering export of 15 lakh tons of the sugar and other commodities, though international prices are not favorable. Sugar production in 2006-07 was estimated to be over 250 lakh tons and there was a carry over surplus of last season of 44 lakh tons, while the estimated consumption stood at 190 lakh tons.

India will probably issue a tender this week for the import of 1 million tons due to lower than expected harvest.

Trading highlights

Reliance Communications was the most-active stock with a turnover of Rs 160.70 crore followed by IFCI and Reliance Industries.

Advancers

Reliance Communications soared nearly 4% to Rs 477, leading the advancers. Reliance Comms today posted a consolidated net profit of Rs 1,024.41 crore in the fourth-quarter of fiscal 2007. It did not give figures in the corresponding period last year. As per available data, Reliance Comms had a consolidated net profit of Rs 440 crore in the fourth-quarter of fiscal 2006.

IT firms advanced as the market awaited changes, regarding a proposal in the Union Budget 2007-08 for bringing employee stock options plans under the fringe benefit tax. TCS rallied 2.5% to Rs 1,266, Infosys advanced over 2% to Rs 2,049, and Satyam added 1% to Rs 473.

Reliance Industries added over 1% to Rs 1,560. Reliance had on Thursday posted stronger-than-expected 14% growth in net profit in the fourth-quarter of fiscal 2007. Maruti and HDFC Bank gained 1% each at Rs 803 and Rs 1,026, respectively. Hero Honda, Tata Steel moved up over 2% each to Rs 684 and Rs 550, respectively. ACC also added 2% to Rs 839 and Grasim gained 0.5% to Rs 2,435.

Decliners

ICICI Bank plunged to a low of Rs 844 on concern of equity dilution on the bank plan to raise Rs 20,000 crore through fresh issue from the domestic and overseas markets. The bank finally closed with a loss of over 7% at Rs 866.

Hindustan Lever lost nearly 5% to Rs 199. Hindustan Lever reported that net profit, excluding extraordinary gains, rose 13.6% to Rs 334 crore from Rs 294 crore. Cipla shed 3% to Rs 211 and oil company ONGC declined nearly 2% to Rs 912. Bharti Airtel and HDFC slid over 1.5% each to Rs 812 and Rs 1,660, respectively.


[R]6:30AM European stocks gain Monday on Telecom Italia and Telefonica deal.[/R]
European markets were higher in morning trade on Monday. The U.K. FTSE 100 index rose 0.8% at 6,471.50, the German DAX Xetra 30 index increased 0.4% at 7,405.80 and the French CAC-40 index advanced 0.4% at 5,952.73. National benchmarks increased in 13 of the 16 western European markets that were open.

Advancers

Telecom Italia advanced 1.5% after Spanish phone company Telefonica and a group of Italian financial large-caps Saturday bought 100% of Telecom Italia largest shareholder, finishing a long battle over control of the main telecommunications operator in Italy in a 4.1 billion euro deal. Telefonica shares rose 0.6%.

Oil and gas companies were higher with BP gaining 0.6% after a report that it is leading the race to buy a controlling stake in Pakistan State Oil in a deal worth around $600 million. Shares in Eni advanced 0.2% as it agreed to buy the Gulf of Mexico upstream assets of Dominion for $4.76 billion in cash.

Decliners

Bank deals hogged the limelight as well, with ABN Amro shares off 0.1% after an Amsterdam court announced on Saturday that it would decide next Thursday on whether or not to freeze the sale of ABN Amro LaSalle Bank to Bank of America.

Turkish lira plunged the most in 11 months and bonds and stocks slumped after the military threatened to block the presidential candidate of the ruling party because of his support for Islamist causes.

Oil and precious metals

Crude oil declined in New York as worries abated that supplies from Saudi Arabia would be disrupted, after security forces crushed a plot to attack oil fields and refineries in the world largest producer of petroleum. Crude oil for June delivery was at $66.13 a barrel, down 33 cents, on the New York Mercantile Exchange. In London, Brent crude oil for June settlement was at $68.14 a barrel, down 21 cents, in electronic trading on the ICE Futures exchange.

Gold for immediate delivery dropped $4.10, or 0.6% to $677.45 an ounce in early trade in London.. Silver fell 7.5 cents to $13.46 an ounce, after a drop of 2.9% last week.

Currencies

The U.S. dollar was mostly higher against other major currencies in European trading Monday morning. The euro traded at $1.3607, down from $1.3643 late Friday in New York. The British pound traded at $1.9918, down from $1.9970. The dollar fetched 119.61 Japanese yen, down from 119.65.