Strong Opening

Elena
06 Sep, 2005
New York City

South Korea's Kospi gained 0.7%, the Nikkei lost 0.3% in a mixed trading session for the Asian markets. The Australian stock market added 0.1% after falling 1% in the last two weeks. European stocks were trading higher at mid-day on M&A news in the energy sector. S&P futures up 5.7 points, Nasdaq futures also up 7.5points.

U.S. MARKET AVERAGES

U.S. stock futures are confidently trading in the positive territory after the three-day long holiday weekend, supported by declining oil and gasoline prices. Crude-oil dropped when the International Energy Agency decided on 60 million barrels release from strategic reserves. Recently light sweet crude was trading below $67 a barrel,while gasoline at $2.15 a gallon.

Investors are expecting service-sector data to be released later in the day.

Dow Jones futures were recently up 48 points, while Nasdaq futures were ahead 7.5 points and S&P futures were up 5.8 points.

ECONOMIC NEWS

The Institute for Supply Management is due to release its August non-manufacturing index at 10:00 a.m. EDT Tuesday. Economists expect the index to have slipped to a reading of 60.0 in August compared with 60.5 in July.

INTERNATIONAL MARKET NEWS

Asian-Pacific benchmarks ended the session mixed after trading in the positive at mid-day on crude-oil prices down at $66.46 a barrel. The Nikkei declined 0.3% as investors digested domestic economic data and took profit in steel and retailer stocks sell-off. Across the region, Hong Hong’s Hang Seng lost 0.4%, while South Korea’s Kospi gained 0.7%. The dollar edged up versus the yen to 109.45.

European markets were trading higher in mid-day dealings, boosted by merger and acquisition news coming from the Spanish Gas Natural SDG which offered to buy electric utility Endesa and positive earnings report from the French insurer AXA. Declining oil prices, trading at $66.65 a barrel, also provided support to the stock markets. The German DAX 30 added 0.5%, the French CAC 40 rose 0.6%, and London’s FTSE 100 climbed 0.3%.


ENERGY, METALS, CURRENCIES

Oil and gas prices declined as markets took some relief in the decision of the IEA to release 60 million barrels from strategic reserves. Light sweet crude for October delivery fell 79 cents to $66.78 a barrel in electronic trading on the Nymex. Unleaded gas was down 4 cents to $2.1410 a gallon. Heating oil lost 3 cents to $2.0603 a gallon. London Brent added 41 cents to $65.21.

Gold fell in European trading as the U.S. dollar edged up. In London midmorning trading gold stood at $443.50 per troy ounce, down from $445.00. In Hong Kong the precious metal lost $2.5 to close at $443.35. Silver opened at $6.98, down from $7.05.

The U.S. dollar advanced against other major currencies in European trading. The euro was quoted at $1.2463, down from $1.2521. The dollar bought 109.66 yen, up from 109.16. The British pound stood at $1.8417, down from $1.8443.

EARNINGS NEWS

JoS A Bank Clothiers, retailer, announced 2Q earnings went up 55.8% to 37 cents a share, and raised its full year earnings guidance to a $2.15 to $2.19 range. Analysts expected 2Q earnings per share of 33 cents and $2.14 a share fro the full year. JoS. A Bank Clothiers had posted before a 20.2% sales increase. Comparable store sales advanced 4.9%.

Lowrance Electronics, reported 4Q net income advanced to 49 cents a share, slightly down from 51 cents a share in the year-ago period despite 59% sales growth. 5.1 million diluted shares were outstanding in the current quarter, up from 4 million diluted shares a year ago.

Psychiatric Solutions, behavioral health care services provider, improved its 2006 earnings outlook to $2.10 to $2.15 a share from $1.97 to $2.05 a share owing to better-than-expected terms of its new credit facilities and sustained growth in its existing and acquired operations. The forecast takes into account the impact of planned 3.5 million share offering, but does not include the influence of any future acquisitions. The analyst estimate had been of earnings of $2.09 a share.

TradeStation Group, Internet-based securities brokerage provider, reported its daily average revenue trades for August advanced 32%. Client assets increased 15% as of Aug 31. The company stock went up 7 cents to $9.32 on Friday.

CORPORATE NEWS

The Spanish Gas Natural SDG made a takeover bid for Endesa, Spanish power utility, for 23 billion euros, or 21.30 euros a share, as 65% of the deal will be in stock and the rest in cash. The successful completion of the deal is expected to create one of the biggest energy producers in Europe.

General Motors GM should be observed as Deutsche Bank cut down its rating on the world's biggest car maker's debt to sell from hold, and affirmed a sell rating on the share, while also downgrading stocks of three suppliers, American Axle and Manufacturing AXL, Dana Corp. (DCN and Lear Corp. LEA.

Chiron Corp. CHIR dismissed the Sept. 1, 2004 offer from Swiss drugmaker Novartis AG, making it clear that the $40 per Chiron share or $4.5 billion was 'inadequate'.

Carnival Corp. CCL found it impossible to go ahead with one cruise and shortened the voyages of two others because of hurricanes. The cruise line operator announced it's chartered its cruise ships Ecstasy, Sensation and Holiday to the Military Sealift Command for the Federal Emergency Management Agency. The ships will ensure emergency housing to about 7,000 evacuees.

American National Insurance ANAT announced that its subsidiaries estimate the pre-tax net loss, net of reinsurance will be in the $17 million range, following Hurricane Katrina. Estimated pre-reinsurance losses might go up to the $100 million range based on preliminary modeled losses.

British Airways BAB said passenger traffic decreased 0.7% in August, damaged by the strike that came as a result of catering firm Gate Gourmet firing several workers. Premium traffic declined 4.7% during the month.