Oil Prices Drop on Inventory Report

Elena
08 Sep, 2005
New York City

According to the first statistics of Katrina's impact on the energy sector, crude-oil inventories have dropped by 6.4 million barrels for the week ended Sept 2, gasoline inventories have declined by 4.3 million barrels. eBay lost 3.8%, Apple is heading for a new peak, Texas Instruments and Broadcom gained.

U.S. MARKET AVERAGES

For the past half an hour stock markets have been moving up after earlier lows. The three major indexes have been driven by volatile oil prices, oil inventory report and economic data.
The energy sector sharply declined when the first statistics of Hurricane Katrina’s impact was released to show that crude oil inventories have significantly dropped in the last few weeks. Gasoline stocks have also declined.

The Housing and retail stocks have remained in the negative territory. Internet stocks registered modest losses with eBay down 3.8%.
The leading gainer among the sectors is the gold sector , although it has declined from intraday highs and was recently up 1.4%.

HMO and airline stocks slightly gained. Chip stocks Texas Instruments ((TXN)) and Broadcom ((BRCM)) moved up ahead of Intel’s mid-quarter upgrade and earnings report from National Semiconductor. Apple ((AAPL)) was heading for a new peak on a new product release.

MOVERS AND SHAKERS

Northwest Airlines Corp. ((NWAC)) advanced 5.9% in pre-market dealings as a result of rising hopes that the company may solve the problems with its striking mechanics.

eBay Inc ((EBAY)) was down 2.7% in pre-market trading because of the rumors that it intents to buy Internet phone service Skype Technologies SA.
News Corp. ((NWS)) rose 0.64% after the company said it acquires IGN Entertainment Inc. for about $650 million.

Ford Motor Co. ((F)) is expected to announce the sale of its Hertz Corp. unit to a group of corporate buyout firms. The company rose 1.4% in pre-market trading.

Sears Holdings ((SHLD)) lost 3.6% as it announced a 4.4% decline in same-store sales for the second quarter.

Coca-Cola Enterprises Inc. ((CCE)) was down 3.9% in pre-market dealings after it said third-quarter earnings won't reach analysts’ estimates of 51 cents per share.


ECONOMIC NEWS

The Department of Energy's Energy Information Administration revealed that crude oil inventories dropped by 6.4 million barrels for the week ended September 2, falling to 315.0 million barrels from the 321.4 million barrels recorded in the previous week. This followed a decline of 1.5 million barrels for the prior week. Even with the recent declines, oil inventories are still 13.1% higher than their levels of the same time last year.

Gasoline inventories posted a week-over-week decline of 4.3 million barrels, adding to a recent streak of draw downs. Gasoline stocks are now 8.6% below their level of last year. Inventories of distillate fuel oil fell by 800,000 barrels in the most recent week.

On the data front, first-time claims for state unemployment benefits fell by 1,000 to 319,000 last week, the Labor Department estimated. The four-week average of new claims rose by 2,000 to 318,500, the highest in seven weeks. The figures include about 10,000 claims related to Hurricane Katrina, a Labor Department spokesman said, adding that upward revisions to last week's data are possible.


INTERNATIONAL MARKET NEWS

Asian-Pacific benchmarks closed mixed on declining crude-oil prices to a three-week low. The Nikkei shed 0.56% as investors sold steel, bank and real estate issues, the central bank said that it would keep monetary policy and national elections approached. Across the region Hong Kong’s Hang Seng lost0.38%, while South Korea’s Kospi reached a record high, rising 0.2% on interest-rate hikes speculations. The dollar bought 110.40 yen.

European markets finished the trading session mixed on weak U.S. stocks and mixed earnings reports, including declining building-materials maker Lafrage and gaining luxury retailer PPR. The German DAX 30 added 0.09%, the French CAC 40 lost 0.45%, and London’s FTSE 100 slipped 0.47%.

ENERGY, METALS, CURRENCIES

Crude-oil gained on oil inventory report. Light sweet crude settled at $64.44 a barrel, up 12 cents, on the Nymex.

Gold in London was traded at $448.55 per troy ounce, up from $445.05.

Copper for December delivery edged up 0.3 cents to $1.65 a pound.

The U.S. dollar gained against its major counterparts on speculations of interest-rate hikes. The euro was quoted at 1.2331, down from $1.2415. The dollar bought 110.49 yen, up from 110.01. The British pound traded at $1.8389, up from $1.8360.

EARNINGS NEWS

SWS Group, ((SWS)) investment and financial-services holding company, expects to post 4Q net income of $5.3 million, or 30 cents a share, up from the year-ago period when the company recorded a net loss of $4.3 million, together with an $8 million charge to settle an anticipated regulatory enforcement action.

Powell Industries, ((POWL)) manufacturer of electricity management equipment, posted 3Q net income of 19 cents a share, up vs. 7 cents in the same period last year on strong revenue growth to $66.9 million from last year's $52.8 million, beating analyst estimate of 13 cents a share.

InBev ,((BE)) brewer, announced first-half adjusted EBITDA advanced 20.8% to 1.36 billion euros, on 6.8% revenue growth up to 5.22 billion euros. The company announced that it’s going to meet EBITDA margins of 30% by 2007, after posting adjusted EBITDA margins of 26.1% in the first half.

PPR, luxury goods retailer, reported that first-half net income climbed 12.5% to 169.6 million euros, with sales up 3.1% to 8.1 billion euros, on a strong performance at its Gucci and Bottega Veneta brands.

Havas, ((HAVS)) French media company, announced that first-half net income rose 52% to 8 cents a share despite a sales decline of 6.4%, mainly due to changes in scope and exchange rate variations. Sales advanced 2.2% on a comparable basis.

CORPORATE NEWS

eBay Inc. is in talks to acquire Internet-telephony company Skype Technology for $2 billion to $3 billion. So far Skype has been in deal talks with other companies but none of them has proved successful.

Bear Stearns ((BSC)) and Calpine ((CPN)) said they have reached a deal to form an energy marketing and trading venture, which will be called CalBear Energy LP and is going to focus on physical natural gas and power trading. Trading operations are scheduled to start in 4Q, according to the companie