Strong Opening Despite Rising Oil

Elena
09 Sep, 2005
New York City

Asian markets ended mixed with the Nikkei up 1.3% on tech stocks, China's Shanghai Composite was down 0.4% on profit-taking. European stocks were higher at mid-day on strong semiconductor sector. U.S. giant Texas Instruments raised 3Q outlook, projecting 36 to 38 cents a share. Import prices index for August is awaited.

U.S. MARKET AVERAGES

U.S. markets averages point to a higher opening of the session, although oil prices edged up as a storm off the Florida coast caused worries. Markets are seen to reverse losses from yesterday’s profit-taking session when oil prices rose for the first time in four sessions.
The semiconductor giant Texas Instruments provided a boost to the market sentiment by releasing a 3Q lifted outlook.

Investors are also awaiting positive economic data on import price index for August which is expected to have risen.

Dow Jones futures were recently up 26 points, while Nasdaq futures were ahead 4 points and S&P futures were up 2.4 points.

Aceto Corp. is expected to report 4Q earnings of 10 cents a share.


ECONOMIC NEWS

The Labor Department is due to release the import price index for August at 8:30 a.m. EDT. Economists expect import prices to rise by 1.2 percent.


INTERNATIONAL MARKET NEWS

Asian-Pacific benchmarks ended the trading session mixed. The Nikkei climbed 1.3%, buoyed by optimism a day before the weekend parliamentary elections. Strong tech issues, supported by upbeat reports from Texas Instruments and Intel, also gave a boost. Across the region, Hong Kong’s Hang Seng finished flat, South Korea’s Kospi gained 0.6%, while China’s Shanghai Composite declined 0.4% on profit-taking. The dollar was up 0.11% at 110.60 yen.

European stocks were trading in the positive territory, lifted by strong semiconductor sector after tech giants like Infineon, Phillips, STM, and ASML gained on U.S. upgrades. The German DAX 30 climbed 0.4%, the French CAC 40 added 0.6%, and London’s FTSE 100 rose 0.3%. The euro was up 0.16% against the dollar at $1.2427.

ENERGY, METALS, CURRENCIES

Crude-oil hovered around $65 a barrel level on slower-than-expected recovery of oil refineries. U.S. light sweet crude October delivery gained 49 cents to $64.98 a barrel. London Brent advanced 65 cents to trade at 463.73.

Gold traded at lower levels in European trading compared with yesterday’s highs. In London the precious metal traded at $446.70 per troy ounce, down from $446.80. In Hong Kong gold closed at $447.05. Silver opened at $6.97, down from $6.99.

The U.S. dollar was mixed against its major counterparts in European currency trading. The euro was quoted at $1.2396, up from $1.2391. The greenback changed hands at 110.65 yen, up from 110.48. The British pound was quoted at $1.8351, down from $1.8356.

EARNINGS NEWS

Intel Corp. ((INTS)), maker of computer chips, lowered its 3Q sales estimate to a range of $9.8 billion to $10 billion. That is on a par with its prior estimate of $9.6 billion to $10.2 billion. Intel reported that its gross margin would amount to 60% of sales, matching previous forecasts.

Quiksilver Inc. ((ZQK)), retailer, reported 3Q net earnings of 20 cents a share, up vs. 16 cents a share in the same time a year ago on revenue growth, matching analyst estimate. The company expects 4Q earnings of 26 cents to 27 cents a share on revenue of $582 million to $592 million.

National Semiconductor Corp. ((NSM)) posted fiscal 1Q net earnings of 24 cents a share, down 27% from 31 cents a share in the year-ago period on 9.9% revenue decline. The company expects 2Q revenue to rise 5% from 1Q.

Texas Instruments Inc. ((TXN)), chip maker, raised its 3Q financial objectives on account of better-than-expected demand. The company lifted its sale range to between $3.48 billion and $3.62 billion from the previous range of $3.29 billion to $3.56 billion. Texas Instruments upgraded its earnings per share forecast to 36 cents to 38 cents, up vs. 31 cents to 35 cents, including the cost of expensing stock options.

Yellow Roadway Corp. ((YELL)), transportation service provider, narrowed its 3Q earnings estimate to $1.40 to $1.45 a share from $1.60 to $1.65 a share previously, missing analysts’ forecasts of earnings at $1.62 a share. The company states Hurricane Katrina as one reason for the narrowed forecast.

G-III Apparel Group ((GIII)) , outerwear and sportswear maker, reported a 2Q net loss of 4 cents a share, up vs. a net loss of 23 cents a share in the year-ago period despite revenue growth. The company announced strong sales after its acquisitions of Marvin Richards and Winlit. G-III Apparel expects fiscal 2005 earnings of 95 cents to $1 a share.

Harris Interactive Inc. ((HPOL)), market research and opinion polling firm, posted 4Q net earnings of 2 cents a share, down vs. 43 cents a share in the same period last year despite revenue growth. The company expects 1Q earnings of breakeven to a penny a share on revenue of $46 million to $48 million and sees fiscal 2006 earnings of 11 cents to 14 cents a share.

CORPORATE NEWS

Boeing could be made to pay up to $500 million and avoid prosecution in two federal probes according to a settlement between the company and the Justice Department which is still being negotiated. The settlement would resolve accusations that Boeing had improperly acquired Lockheed Martin’s proprietary documents connected with rocket programs and illegally recruited a senior Air Force official while she still had oversight of billions of dollars in other Boeing contracts.

McDonald's the world's largest restaurant chain, is tentativelyscheduled to release sales for August. The company is likely to update plans for its Chipotle Mexican Grill and Boston Market chains. Those plans could include an initial public offering for Chipotle, according to a research note last month from Piper Jaffray.