August Retail Sales Decline

Elena
14 Sep, 2005
New York City

Asian-Pacific markets ended mostly up with the Nikkei down 0.5% and China's Shanghai Composite up at a five-month peak of 0.8%. European stocks enjoy steady trading at mid-day. Retail sales for August were $350.1 billion, down 2.1 percent from July,but up 7.9 percent from one year ago. Excluding automobiles, retail sales in August were $274.9 billion, up 1.0 percent from July, and up 9.4 percent from one year ago.

U.S. MARKET AVERAGES

Stock markets got mixed after making a strong start of the trading session. In pre-market trading stocks were up ahead of retail sales report, but declined after the released data showed that the retail sales for August had dropped by 2.1% on 12% decline in auto sales. Crude-oil is also an active market player being on the rise again ahead of U.S. petroleum-stocks report, expected to show lower fuel inventories, caused by production outages on Katrina’s impact. A better-than –expected quarterly report from Lehman Brothers provided a boost to the market sentiment, beating analysts’ expectations.

Among the gaining sectors gold sector made a notable rise of 1.9% . The broker/dealer sector has also risen on the strong report from Lehman Brothers. The biotech sector has attracted some attention from the investors.

Energy stocks registered some modest gains as traders were cautious before the U.S. inventory report release.
The Housing space rebounded from recent gains on data of lower mortgage application activity in the last week.

In early trading, the Dow Jones industrial average rose 28.58, or 0.27 percent, to 10,626.02.
Broader stock indicators were mixed. The Standard & Poor's 500 index rose 2.93, or 0.24 percent, to 1,234.13, and the Nasdaq composite index fell 8.38, or 0.39 percent, to 2,163.37.

Bonds fell, with the yield on the 10-year Treasury note rising to 4.14 percent from 4.13 percent late Tuesday.

MOVERS AND SHAKERS

Lehman Brothers ((LEH)) advanced nearly 2% after the company announced higher third-quarter profit connected with the strong fixed-income division.

General Electric ((GE)) were up 0.2% due to the report that the company is planning to sale some of its industrial units.

Northwest Airlines ((NWAC)) dropped 0.6% following an announcement in The Wall Street Journal that the company and Delta Air Lines Inc.

((DAL)) could look for protection from bankruptcy as early as today.
Baidu.com ((BIDU)) jumped 15% after both Goldman Sachs and Piper Jaffray set up coverage of the company with underperform ratings, pointing worries over unsustainable estimation.

Image Entertainment ((DISK)) added 50% after the company said it received an undesirable buyout bid from Lions Gate Entertainment ((LGF)).

ECONOMIC NEWS

The Department of Energy's Energy Information Administration revealed that crude oil inventories dropped by 6.6 million barrels for the week ended September 9, falling to 308.4 million barrels from the 315.0 million barrels recorded in the previous week. This followed a decline of 6.4 million barrels for the prior week, which was the first period to include data on Hurricane Katrina's aftermath. Even with the recent declines, oil inventories were still 11.3% higher than their level of the same time last year.

Gasoline inventories posted a week-over-week advance of 1.9 million barrels, partially reversing the prior week's decline of 4.3 million barrels. Gasoline stocks were down 7.4% from the same time last year, though this is an improvement over the previous week, when inventories were 8.6% below the prior-year mark. Inventories of distillate fuel oil fell by 1.1 million for the most recent week.

Before the opening bell Wednesday, the U.S. Commerce Department revealed Wednesday that retail sales dropped by a seasonally adjusted 2.1% in August, a steeper decline than the 1.4% fall expected by economists. In July, retail sales rose by 1.8%. Auto sales plunged 12% in August; excluding this sector, retail sales increased by a better-than-expected 1%.




INTERNATIONAL MARKET NEWS

Asian-Pacific benchmarks closed mixed on oil prices hovering below $64 a barrel, concerns of U.S. economy slowdown and lower corporate profits after Katrina’s impact. The Japanese stock market slid 0.5%, retreating from a four-year high Tuesday on sharp U.S. markets decline overnight. China’s Shanghai Composite surged to a five-month high of 0.8% on optimism about nontradable reform. Hong Kong’s Hang Seng added 0.1% and South Korea’s Kospi climbed 1.1%. The dollar bought 110.34 yen.

European stocks gain ground in mid-day dealings on gains from the automotive sector after monthly sales data release, but keep near the flat-line level on rising oil. The German DAX 30 was trading flat, the French CAC 40 climbed 0.4%, and London’s FTSE 100 added 0.1%.

ENERGY, METALS, CURRENCIES

Oil prices advanced ahead of weekly U.S. petroleum-stocks report, expected to show lower fuel inventories due to refineries shutdowns after Katrina. Light sweet crude October delivery rose 56 cents to $63.67 a barrel in the electronic trading on the Nymex. Gasoline added 2 cents to $1.9120 a gallon, while heating oil gained 1.5 cents to $1.8555 a gallon. London Brent was up 39 cents to $62.00.

Gold price climbed in European trading. In London the precious metal was traded at the recommended price of $447.85 per troy ounce, up from $445.80. In Hong Kong gold fell 60 cents to $447.75. Silver traded at $6.94, up from $6.90.

The U.S. dollar lost ground against its major counterparts in European currency trading. The euro was quoted at $1.2276, up from $1.2267. The greenback changed hands at 110.36 yen, down from 110.70. The British pound was quoted at $1.8225, up from $1.8219.

EARNINGS NEWS

Lehman Brothers ((LEH)) reported 3Q earnings rise of $2.94 per share, up from $1.71 per share in the same period last year, beating expectations of a profit of $2.37 per share. The company said net revenue for the period came in at $3.9 billion, up 47% from last year's mark of $2.6 billion.

Touchstone Applied, ((TASA)) educational assessment products provider, posted 3Q net income for the company's 5 cents per share, down from 7 cents per share in the comparable quarter a year ago despite revenue and gross operating margins growth, due to increased professional
fees and costs associated with implementation of Section 404 of the Sarbanes-Oxley Act.

Comarco Inc., ((CMRO)) provider of wireless test solutions, reported 2Q of fiscal 2006 revenue was $11.1 million, up 67% up from $6.7 million in revenue fro the same time last year.

Pike Electric Corporation, ((PEC)) providers of outsourced electric distribution and transmission services, reported 4Q net loss 65 cents per share, down from net income of 24 cents per share in the same quarter of the previous year. Revenues rose $61.4 million, or 65.5%, to $155.0 million from $93.6 million for the year-ago period, driven primarily by the acquisition of Red Simpson, Inc. in July 2004 and organic growth the result of strong customer demand.