National Semi Buys Back $2 B Shares

Elena
08 Jun, 2007
New York City

U.S. stock markets posted modest gains at opening on Friday on bargain hunting after three days of heavy losses. However, concerns about rising bond yields continued to take their toll. Following an improvement in the April trade deficit, the yield of the benchmark 10-year Treasury bond retreated from an overnight high of 5.25%. The Dow was led higher by McDonald''s which rose 2.35% after saying global same-restaurant sales rose 8.7% in May.

[R]9:45AM U.S. stocks opened higher on bargain hunting.[/R]

U.S. stock markets posted modest gains at opening on Friday on bargain hunting after three days of heavy losses. However, concerns about rising bond yields continued to take their toll. Following an improvement in the April trade deficit, the yield of the benchmark 10-year Treasury bond retreated from an overnight high of 5.25%. Utility stocks recovered slightly as the yield on the 10-year Treasury retreated to 5.1%. Constellation Energy Group ((CEG)) fell 1.3%, while Entergy Corp. ((ETR)) rose 2.3%.

The Dow was led higher by McDonald's ((MCD)) which rose 2.35% after saying global same-restaurant sales rose 8.7% in May. Tech stocks were sent higher by strength in the the chip sector. National Semiconductor ((NSM)) surged 10% after posting better-than-expected drop in profit. The company also said it was buying back $2 billion worth of shares. Further boost to the Nasdaq was given by chip maker Texas Instruments ((TXN)) which added 2.2% and analog chip maker Maxim Integrated Products ((MXIM)) which advanced 1.4%.

Crude oil futures declined, sending oil shares down. Exxon Mobil Corp. ((XOM)) lost 0.8% and Chevron Corp. ((CVX)) stock lost 1.2%. In early trading, the Dow Jones industrial average rose 1.38, or 0.01%, to 13,268.11. The Standard & Poor's 500 index fell 3.22, or 0.22%, to 1,487.50, and the Nasdaq composite index fell 6.41, or 0.25%, to 2,534.97


[R]9:15AM U.S. stock futures traded in a lackluster fashion.[/R]

U.S. stock futures turned in a lackluster fashion on Friday, slightly recovering from steep losses recently. Rising bond yields and positive results from National Semiconductor were the pre-market highlights. The dollar rose sharply against the euro and the yen. Crude oil and gold futures declined.

Shares of National Semiconductor ((NSM)) climbed 9% in electronic trading after reporting a smaller-than-forecast 24% profit drop. The company also said it was buying back $2 billion worth of shares. UBS upgraded the stock to buy from neutral. Rival companies Texas Instruments ((TXN)) advanced 1.8% and chipmaker Maxim Integrated Products ((MXIM)) rose 2.7%.

Again in the sector, Qualcomm ((QCOM)) appealed a regulatory ruling that is preventing the import of mobile devices containing chips made by the company. In other corporate news, McDonald''s Corp. ((MCD)) rose 0.8% in pre-open trade, following news that its global same-restaurant sales surged 8.7% in May.

On the economic news front, the Commerce Department said that U.S. trade deficit narrowed by 6.2% in April to $58.5 billion, coming in below the consensus forecast of $63.5 billion. S&P 500 futures eased 0.5 of a point at 1,503.20 and Nasdaq 100 futures rose 2.75 points at 1,910.00. Dow industrial futures rose 10 points.


[R]9:00AM London is lower Friday on miners, Vodafone.[/R]

The benchmark FTSE 100 Index in London declined 44.90, or 0.7%, to 6,460.2 at mid-day in London.

Advancers

Aukett Fitzroy Robinson Group advanced 7.1%. The architectural and engineering company announced first-half profit soared after demand in the U.K. rose.

Fuller Smith & Turner jumped 0.9%. The owner of pubs reported first-half net income of 29.1 million pounds, up from 10.4 million pounds, and added it will continue to grow its business organically.

Oil large-caps Shell and BP were better on higher crude prices. Shell advanced 0.9%, while BP gained 1.3%.

Decliners

Vodafone declined 0.5%. The shares advanced 2.1% yesterday after a shareholder group stated Vodafone should return as much as 38 billion pounds to investors by spinning off its Verizon Wireless stake and issuing bonds. Vodafone rejected the proposals.

Anglo American, the world second-largest mining company, lost 2.4%, while BHP Billiton, the world largest, shed 2.7%.

Rexam dropped 2%, after the maker of one in every four beverage cans globally announced it is in talks to buy Owens-Illinois Inc.''s plastics unit.


[R]8:30AM Asian markets finish lower Friday with Tokyo leading decliners, while Shanghai gains.[/R]

Asian markets ended lower on Friday. Japan''s Nikkei 225 index fell 274.29 points, or 1.52%, to finish at 17,779.09. Decliners included Nippon Steel, which lost 1.6%, and Fanuc, which also shed 1.6%.

In China, banks and property stocks declined on concerns of another interest-rate hike, but the market managed to advanced for the fourth session in a row. The Shanghai Composite Index, which tracks both Class A and B shares, settled up 0.6% at 3,914.18, while the smaller, Shenzhen Composite Index, rose 1.6% to 1,145.22.

The Korea Composite Stock Price Index, or Kospi, finished also down 25.76 points, or 1.5%, at 1,727.28, finishing the week 0.6% higher. On Friday, investors took profits in Daewoo Engineering & Construction, which declined 5.4% and Hyundai Heavy Industries which shed 4.7%.

Hong Kong Hang Seng Index shed 1.4% to end at 20,509.15, while Australian benchmark S&P/ASX 200 lost 1.3% at 6,231.7 and the Weighted Price Index of the Taiwan Stock Exchange dipped 0.7% to settle at 8,300.71.


[R]8:00AM Kellwood posted Q1 earnings drop, named a new CEO.[/R]

Kellwood Company ((KWD)) reported Q1 net income decline to $7.4 million, or 28 cents a share, down from $9.2 million, or 36 cents a share a year ago. The quarterly earnings missed analyst expectations of 20 cents a share. The retailing company said sales increased to $494 million from $484 million. Earnings from continuing operations rose to 23 cents a share, compared to 4 cents a share last year. Kellwood projected Q2 net income in the range of 37 to 39 cents a share. The company also named Gregory W. Kleffner as CEO and said board member Robert Baer Kellwood retired.

[R]7:30AM NY-6:30PM Mumbai Sensex declines sharply Friday in a volatile trading.[/R]

The Sensex on BSE finished Friday 122.37 points lower, or 0.86%, at 14,063.81.

The market-breadth was negative as there were more than three decliners for every two advancers. For 957 stocks which advanced, 1,464 stocks declined and only 74 stocks remained unchanged. Of the 30 stocks in the Sensex, only five advanced, while all the rest declined. The turnover on BSE was Rs 4,592 crore, compared with 4,289 crore on Thursday. On NSE, the turnover was Rs 10,577.41 crore, higher than Rs 9,092 crore on Thursday.

Economic news

The wholesale price index in India advanced 4.85% in the period up to May 26 2007, lower than 5.06%, the previous week and also lower than the predicted 5.05%.

The Indian rupee continued its downward trend and lost against the dollar on Friday. The partially convertible rupee stood at 41.01 in early afternoon it had settled at 40.74 a day ago.

The government may not sell the Dabhol power plant LNG receipt facility. The government controlled, NTPC has been asked to invest Rs 500 crore to save the project from collapsing and pay contractors.

Trading highlights

Reliance Industries was the most-active stock with a turnover of Rs 187.70 crore followed by Nitin Fire and Infosys.

Advancers

Hindalco and Satyam surged almost 3% each to Rs 158 and Rs 495, respectively. Hindalco gained for the third day in a row on speculation that Alcan may combine with Sterlite Industries to bid for Hindalco.

TCS and ONGC spurted over 1% each to Rs 1,221 and Rs 548, respectively. ONGC rallied after the company said it had discovered five new finds of oil and gas at its blocks in the east coast and the north east of the country. Wipro also gained 0.4% to Rs 548.

Decliners

Tata Steel plunged nearly 5% to Rs 586, and traded lower throughout the session. ACC slumped 4.5% to Rs 769. HDFC and Tata Motors tumbled over 3.5% each to Rs 1,754 and Rs 654, respectively.

Auto stocks were weak on worries of slowdown in demand. Hero Honda slumped 2.4% to Rs 681 and Bajaj Auto shed 1.8% to Rs 2,117. Large-cap Maruti Udyog finished lower by 3.2% to Rs 737.

Ranbaxy shed 2.5% to Rs 369. Index heavy Reliance Industries declined 0.5% to Rs 1,660. Reliance KG basin blocks will be operational in one year''s time.


[R]6:30AM Europe dips by mid-day Friday on rate worries.[/R]

By mid-day, the U.K. FTSE 100 index declined 0.5% at 6,471.00, the German DAX Xetra 30 index lost 0.7% at 7,566.15 and the French CAC-40 index slipped 0.5% at 5,863.46. National benchmarks dropped in all 18 western European markets except for Luxembourg.

Advancers

French bank BNP Paribas managed to gain 2.3% in Paris after a report that Societe Generale has hired two banks, one of which is Morgan Stanley to study two cases of a possible tie-up with peer BNP Paribas.

Shares in oil large-cap Royal Dutch Shell rose 0.6% after it was upgraded to buy from neutral at Merrill Lynch with the broker setting a higher price target.

Decliners

Allianz slid 1.9%. Barclays, the U.K. third-largest bank, declined 1.2%. British Energy, whose nuclear reactors can produce about a fifth of the U.K electricity, lost 1.2%.

BHP Billiton, the world biggest mining company, lost 1.1%. Rio Tinto, the world third-largest mining company, dropped 1.4% as copper prices declined for a third day in Asia.

Shares of Vodafone Group slid 0.5%. The world largest mobile-phone company rejected a proposal from Efficient Capital Structures to return as much as 38 billion pounds, or $75 billion to shareholders.

Gold and oil

Crude oil for July delivery fell 79 cents, or 1.2%, to $66.14 a barrel in after-hours electronic trading on the New York Mercantile Exchange. Brent crude oil for July settlement declined $1.05 cents, or 1.5%, to $70.17 a barrel on the ICE Futures exchange. Gold traded in London at $656.75, down from $667.80 on Thursday. Silver opened in London at $13.39, down from $13.64.

Currencies

U.S. dollar rose against other major currencies in European trading Friday morning. The euro traded at $1.3363, down from $1.3432 late Thursday. The British pound traded at $1.9659, down from $1.9771. The dollar bought 121.30 Japanese yen, up from 121.11.


[R]5:30AM NY:4:30PM Mumbai Sensex trades slightly lower in mid-afternoon session on Friday.[/R]

The Sensex on BSE is trading 38.83 points, or 0.27%, lower at 14,147.35 in late afternoon session.

The market-breadth improved from the morning session but is still negative with 1,230 stocks lower, 1,111 higher and 76 which are unchanged.

Economic news

The Indian rupee lost further to the dollar and is now past 41 rupees per dollar. The partially convertible rupee stands at 41.01, its lowest level since May 14.

Wholesale price inflation increased in the week ending May 26 to 4.85%, lower than 5.06% in the previous week and below estimates of 5.05% growth.

Advancers

Satyam has rallied 4.7% to Rs 504 and Hindalco has added 3.5% to Rs 159.
TCS and SBI have both rallied 1.8% to Rs 1,228 and Rs 1,384, respectively. ONGC has risen 1.5% at Rs 868. Wipro, Reliance Industries and Infosys are over 1% higher each at Rs 552, Rs 1,689 and Rs 1,973, respectively.

Decliners

Tata Steel has plummeted 3.5% to Rs 593. HDFC and ITC have lost 2.5% each to Rs 1,775 and Rs 151, respectively. Maruti and Ranbaxy have dipped over 2% each to Rs 743 and Rs 370 and Dr.Reddy''s and Tata Motors are lower 1.7% each to Rs 635 and Rs 665.