Media Stocks Buoy Europe

Ivaylo
02 May, 2007
New York City

European markets advanced on Wednesday on a number of strong earnings reports, while merger activity in the media sector also helped support the markets. The media stocks rallied after British Sky Broadcasting posted surprisingly strong customer take-up and on bid speculation in the sector following the move of News Corp for Dow Jones. By mid morning, Frankfurt Xetra Dax was 0.5% higher, the CAC 40 in Paris added 0.5%, and London FTSE 100 climbed 0.8%.

[R]6:30AM European markets were higher Wednesday on strong media sector.[/R]
European markets advanced in early trade on Wednesday. By mid morning, Frankfurt Xetra Dax was 0.5% higher at 7,446.05, the CAC 40 in Paris added 0.5% to 5,989.09, and London FTSE 100 climbed 0.8% to 6,471.8. National benchmarks increased in all 16 western European markets that were open except for Sweden and Austria.

Advancers

London-listed BSkyB, which is 39% owned by News Corp, advanced 5.5% after posting better-than-expected customer growth in its third quarter. M6, the French commercial television broadcaster, gained 1% after reporting a 9.7 % increase in first-quarter sales. Other companies in the sector also gained including, Dutch publisher Wolters Kluwer rose 2.9%, while French peer Lagardere added 2.4%.

Novo Nordisk, the Danish drugs company, advanced 4.5% after reporting a better-than-expected 24% rise in first-quarter operating profit on strong growth in its European and North American markets. German household goods maker Henkel advanced 3.3% after it stated full-year sales growth would be at the upper end of estimates

Decliners

More potential deal news were at the center of attention on the stock exchanges. Shares of NYSE Euronext declined 3.5% after it disclosed in a filing that it has entered into a $3 billion syndicated revolving credit facility, which has prompted at speculation that it may gate-crash Deutsche Boerse agreed $2.8 billion acquisition of the International Securities Exchange. Deutsche Boerse shares declined 4.2%.

TeliaSonera AB fell 4.6%. The Swedish government announced it will sell a stake valued at about $2.9 billion in the biggest Nordic phone company to institutional investors as part of a plan to cede state holdings and reduce debt. Shire dropped 1%. The U.K. third-largest drugmaker will sell $1 billion in convertible bonds to fund the purchase of New River Pharmaceuticals.

Oil and precious metals

Crude oil advanced from a seven-day low on the expectation U.S. gasoline stockpiles declined last week as refiners shut units for repairs. Crude oil for June delivery rose to 27 cents, or 0.4%, to $64.67 in after-hours electronic trading on the New York Mercantile Exchange. Brent crude oil for June settlement rose to 36 cents, or 0.5%, to $67.36 a barrel on London ICE Futures exchange.

Gold was little changed in Asia as investors bet the sell-off yesterday in the precious metal as the dollar rallied was overdone. Silver gained. Gold for immediate delivery rose to $1.95, or 0.3%, to $675.40 an ounce. Silver for immediate delivery gained 3 cents, or 0.2%, to $13.28 an ounce.

Currencies

The dollar was higher against other major currencies in European trading Wednesday morning. The euro traded at $1.3578, down from $1.3620 late Tuesday in New York. The British pound traded at $1.9933, down from $1.9996. The dollar fetched 120.09 Japanese yen, up from 119.72.

[R]5:30AM Corn rallied Tuesday, while gold and silver settled lower.[/R]
May corn advanced 9.50 cents to $3.6750 per bushel, July settled 10 cents higher at $3.77.50, and December rallied 14 cents to $3.7850. July wheat ended 17 cents lower at $4.9550 per bushel.

June gold ended down $6.20 at $677.30 a troy ounce on the New York Mercantile Exchange, as well as July silver which lost 20.5 cents to $13.37 an ounce. July platinum finished up $2.50 at $1,300.90 an ounce, while June palladium settled up 15 cents at $374.15 an ounce. The most-active July copper contract gained 7.80 cents to settle at $3.6345 per pound.

The June crude oil contract ended down $1.31 at $64.40 a barrel after rising to $66.15 a barrel. June heating oil closed down 1.19 cents at $1.8829 a gallon. June gasoline also finished down 1.47 cents at $2.2447 a gallon after reaching to $2.2950 a gallon. June natural gas settled down 14.5 cents at $7.718 per million British thermal units.

On the New York Board of Trade, Arabica coffee futures May ended down 1.30 cents at $1.0185 a pound, with July off 1.30 cent at $1.0485. Most-active July cocoa settled up $36 at $1,834 a metric ton. Futures on raw sugar in foreign ports for July gained 0.04 cent to end at 9.14 cents a pound, with October down 0.01 cent at 9.44 cents.