Dow, Nasdaq and S&P Rebound 1%

123jump.com Staff
08 Jun, 2007
New York City

Stock indexes rebound more than 1% after a three-day decline led by techs, banks and brokerage stocks. European markets closed lower tracking the early morning weakness in the U.S. trading. Late afternoon rally in New York was led by a failure of bonds to fall further. U.S. April trade deficit fell 6.2% to $58.5 billion. Deficit rose with all major trading partners in the month.

[R]4:00PM NY, 10:00 PM Frankfurt, 1:00AM Mumbai – Global Markets[/R]

Yields traded lower on 10-year U.S. bonds and closed at 5.12% and 30-year bond rose to close at 5.224%.

Crude oil fell $2.17 to close at $64.76 per barrel, natural gas lost 16cent to close at $7.66 per mBtu, and gasoline futures fell 6.5 cents to close at 212.71 cents per gallon.

Gold dropped $14.90 to close at $650.30 per ounce, silver lost 44 cents to close at $13.04 per ounce, and copper futures gained $9 to close at $7,504 per metric ton.

Asian Markets closed lower on the worries that rates in Europe and U.S. may continue to rise. A fall of 1.9% in Indonesia led the region followed by 1.5% decline in Japan, Singapore and South Korea, loss of 1.4% in Hong Kong and 1.3% in Australia, and 1% decline in India and Thailand. Shanghai bucked the regional trend and rose for the fourth day. Bank of Korea left its target short term rate unchanged to 4.5%. Korean stocks traded lower, but the index is the third best performing in the region with 18% rise for the year so far. Weekly measure of inflation in India fell below the target set by Reserve Bank of India.

Japanese stocks closed lower led by 4% loss in Sumitomo Trading, 2% fall in Toyota, and 1.6% decline in Fanuc. Machinery orders in April rose 2.2% from March orders, lower than expected. Consumer lending companies in Japan came under heavy pressure for the second day in a row. Credit Saison plunged 9% and Aiful Corp lost 4%. Supreme Court in Japan ruled that consumers can sue these sub prime lending companies to recover excess interest rates charged above legal limits.

Shanghai stocks surged for the fourth day on smaller compaies joining the rally and belief that factors driving economic growths are still in place and corporate profits are growing at a healthy pace. Ping An Insurance, second largest insurance company gained 2.6% and China Yangtze advanced 2.3%. Shanghai market, the best performing market in the world for a second year in a row is expected to advacne further by local securities analysts, despite government efforts to curb market rise.

European Markets closed lower every day of the week, five day of losses on rising interest rates and energy and metals prices. Nickel, copper, and zinc price volatility brought several mining and metals companies stocks lower. Bank and insurance companies led the region in decline. Barclays, Allianz, ABN Amro and Credit Suisse fell more than 0.5%. Newspaper Les Echos reported in Paris that Societe Generale is looking at ways to prepare a bid for BNP Paribas stoking takeover rumors. Germany, France and UK are still up more than 10% for the year so far.



Latin American Markets closed higher in sympathy to rising markets in the U.S. Chile led the region with a gain of 1.3% followed by 0.7% gain in Argentina and Brazil. Mexico gained 0.8%. Analyst price revision helped paper board company, Masisa SA in Chile, the stock jumped 4.2% and largest supermarket chain Distribucion y Servicio gained 1.6%, after three days of decline, and is likely to rise in the coming weeks. Rossi Residencial in Brazil advanced 2.5% on revised earnings revision from a broker. Airport operators in Mexico gained on May traffic rise. OMA traffic rose 26% and at Grupo Aeroportuario del Pacifico, operator of 12 airports, traffic rose 20%.


[R]1:00PM NY, 5:00 PM Frankfurt European markets ended lower for a fifth straight session, dragged down by rate worries.[/R]

European stock markets closed lower Friday for a fifth consecutive session, pressured by continuous worries about the impact of higher interest rates. The downward trend was bucked by gains in the shares of BNP Paribas which rose amid takeover speculations.

Shares of the French bank gained 1.5%. Strength among chip makers, led by Infineon Technologies and STMicroelectronics failed to lift sentiment. Vodafone was among advancers for a second day in a row, moving up 1% as investors continued to assess restructuring prospects for the company.

Mining companies stood out among losers, with Vedanta Resources losing 2.5%, Kazakhmys falling 1.4%, and BHP Billiton losing 1.4%. Shares in oil giant Royal Dutch Shell added 0.8% after it was upgraded to buy from neutral at Merrill Lynch with the broker lifting its price target to 2,150 pence. The U.K. FTSE 100 finished unchanged at 6,505.10, the German DAX Xetra 30 fell 0.4% at 7,590.50 and the French CAC-40 slipped 0.1% at 5,883.29.


[R]11:30AM U.S. market averages traded slightly higher. Lower trade deficit boosted the dollar and bonds.[/R]

U.S. stock market averages moved modestly higher, as investors turned to bargain hunting after recent weakness, with concerns about the outlook for interest rates still weighing. News that the U.S. trade deficit narrowed by 6.2% in April helped boost the dollar and the bonds. In recent action, the benchmark 10-year Treasury bond was up 5.124%.

Some positive sentiment was generated by a notable decline by the price of oil. Shares of Royal Dutch Shell ((RDSA)) traded in the U.S. were among the leading gainers in the oil group, rising 1%. At the same time, gold stocks posted weakness amid a continuous drop by the price of gold. Gold futures tumbled nearly 2%, extending their four-session losing streak, as the dollar rallied against other major currencies.

Significant strength was visible in the semiconductor, airline, and brokerage sectors. The semiconductor sector was boosted by National Semiconductor ((NSM)) which surged 14% after delivering stronger-than-expected Q4 earnings.

In late morning trading, the Dow Jones industrial average rose 16.34, or 0.12%, to 13,283.07. The blue-chip average was led higher by General Motors ((GM)), up 2.1% and Alcoa ((AA)) shares, rising 1.1%. The Standard & Poor''s 500 index rose 2.30, or 0.15%, to 1,493.02, and the Nasdaq composite index rose 10.24, or 0.40%, to 2,551.62.


[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 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.