Inflation Data Boost U.S. Stock Futures

Elena
15 Jun, 2007
New York City

U.S. stock futures indicated a strong opening for a third consecutive session, boosted by inflation data which helped eased recent stock and bond markets concerns. The consumer price index in May showed prices rose at the fastest pace in 20 months on higher gas prices, while core consumer prices rose a lower-than-expected 0.1%. A broker upgrade of microchip giant Intel also generated positive mood.

[R]9:00AM U.S. stock futures predict higher opening after inflation data.[/R]

U.S. stock futures indicated a strong opening for a third consecutive session, boosted by inflation data which helped eased recent stock and bond markets concerns. The consumer price index in May showed prices rose at the fastest pace in 20 months on higher gas prices, while core consumer prices rose a lower-than-expected 0.1%. A broker upgrade of microchip giant Intel ((INTC)) also generated positive mood.

Among other companies in focus, Nymex Holdings ((NMX)) surged 7% in pre-open trade amid deal speculations. Home Depot ((HD)) advanced 1.9% after it received two, separate $10 billion offers for its supply unit. Further in M&A action, an investment group led by Babcock & Brown agreed to buy Coinmach Service ((DRY)) for $1.33 billion, including debt. The offer is 15.7% premium to Thursday's close.

Stock futures moved notably higher following the report. Dow futures expiring in September rose 65, or 0.47%, to 13,753, while Standard & Poor's 500 index futures rose 9.00, or 0.58%to 1,548.50. Nasdaq 100 index futures advanced 12.25, or 0.63% to 1,9653.50. Bond yields on the 10-year note fell to 5.19% from 5.23%late Thursday after release of the CPI report.


[R]8:30AM Asian markets advance Friday with Japan gaining on steelmakers and export stocks.[/R]

Asian markets advanced Friday. The Nikkei 225 Average finished the day 0.7% higher at 17,971. Shares advanced for a second straight day, as JFE Holdings and other steelmakers gained on an upbeat report by Merrill Lynch. Trading companies were also higher as the dollar climbed against the yen. Marubeni ended up 3.6%, while Mitsubishi rose 3.5%.

Hong Kong Hang Seng Index gained 0.7% to close at 21,017. Insurance provider China Life surged 3.4%, China Construction Bank rose 3.2%, ICBC advanced 1.7%, and Bank of China rose 1.3%. In China, institutional demand for large-caps supported shares to settle higher. The Shanghai Composite Index added 0.4% to finish at 4,133.

In South Korea, the market hit a new record as brokerage and insurance stocks rallied on hopes they will benefit from the Capital Markets Consolidation Act, which the parliament is expected to pass by the end of this month. Samsung Securities added 5%, while Samsung Fire & Marine Insurance rallied 5.4%. South Korean Kospi Index gained 0.2% to 1,772.

Australian S&P/ASX 200 increased 0.5% to 6294. Shares in Australia rebounded with investors encouraged by U.S. increase on upbeat PPI data and other positive regional leads. Rio Tinto led gainers with a 1.7% rise and BHP Billiton closed up 0.4%.


[R]7:30AM NY- 6:30PM Mumbai Sensex erases gains in a last-hour sell-off in large-caps.[/R]

The Sensex on BSE finished Friday 41.01 points, or 0.29% lower, at 14,162.71.

The market-breadth was positive as 1,275 stocks advanced, while 1,210 declined and only 88 stocks remained unchanged. Of the 30 stocks in the Sensex, 15 advanced, while the rest declined. The turnover on BSE was Rs 4,204 crore, compared with Rs 4,427 crore on Thursday. On NSE, the turnover was Rs 8,675 crore, slightly higher than Rs 8,380 crore on Thursday.

Economic news

Wholesale prices rose 4.8% in the week ended June 2 from a year ago, down from 4.85% the previous week.

The government in India approved an ordinance that will allow the federal authorities to purchase from the Reserve Bank of India 59.7% holding in the State Bank of India. The government wants to finalize the transaction by June 31.

Trading highlights

MIC Electronics was the most-active stock with a turnover of Rs 155 crore followed by Reliance Industries and Indiabulls Real Estate.

Advancers

BHEL soared 3% to Rs 1,389. BHEL secured a Rs 430-crore order from Indian Oil Corporation to supply steam generators for IOC''s Vadodara project. Maruti surged 1.6% to Rs 741. Larsen & Toubro and Tata Motors gained 1.2% each to Rs 1,948 and Rs 650, respectively and Ranbaxy was up 1% at Rs 374.

Decliners

Tata Steel and HDFC shed around 2.3% each to Rs 600 and Rs 1,785, respectively. Other decliners included NTPC, which lost nearly 2% to Rs 151. Reportedly, NTPC, largest power generator in India, is planning a follow-on public offer to raise funds for expansion. Grasim and Hindalco dipped 1.7% each to Rs 2,389 and Rs 161, respectively.

Hindalco Industries slipped 1.7% to Rs 161. Hindalco was downgraded by credit rating agency Crisil, from triple-A to double-A. Crisil had been observing HIndalco, following a large debt raised by the company to funds its acquisition of Novelis.

Both TCS and Satyam slipped around 1.5%, respectively to Rs 1,184 and Rs 483,. Index heavy Reliance and Dr.Reddy''s were also down 1% each at Rs 1,680 and Rs 632.


[R]6:30AM European markets advance Friday on oil and banking stocks.[/R]

European markets rose in all 17 markets in western Europe that were open except for Denmark and Luxembourg. In late morning trade, Frankfurt Xetra Dax added 0.6% to 7,892.04, the CAC 40 in Paris climbed 0.4% to 6,073.87 and London FTSE 100 rose 0.6% to 6,687.8.

Advancers

EADS, the European aerospace group, rose 4.4% after Francois Fillon, France’s prime minister, announced that the company was strategic for France, denied any ideas of nationalising the company.

Commerzbank was up 2.3% after the prospect of a capital increase diminished after the city of Berlin government stated it was selling its 81% stake in Landesbank Berlin to DSGV, the public-sector savings bank, for 4.622 billion euros.

Hypo Real Estate, the German property lender gained 2.7% after Morgan Stanley raised its price target on the stock, keeping its rating at overweight.

Oil companies also helped boost the markets as crude prices remained above $70 a barrel. Total added 1.1%, Repsol gained 1.3% and OMV climbed 1.3%.

Shares of Sainsbury climbed 5%. A Qatar- backed investment fund acquired 7.1% of the company''s stock, raising its stake in the supermarket chain to 25%.

Decliners

RWE, the second-largest utility in Germany, fell 0.1% after Goldman Sachs put a sell rating on the stock.

Commodities

Oil prices were little changed Friday after rising overnight to a nine-month-high finish on worries the U.S. refining industry will not meet peak summer gasoline demand. Crude oil for July delivery was down 10 cents at $67.55 a barrel on the New York Mercantile Exchange. Gold opened Friday at a bid price of $650.70 a troy ounce, down from $650.90 late Thursday.

Currencies

The U.S. dollar was mostly lower against other major currencies in European trading Friday morning. The euro traded at $1.3310, up from $1.3307 late Thursday in New York. The British pound traded at $1.9703, up from $1.9694. The dollar bought 123.43 Japanese yen, up from 122.97.


[R]5:00AM Gold and silver advance Thursday on U.S. economic data.[/R]

Gold for August delivery gained $3.20 to end at $655.90 an ounce on the New York Mercantile Exchange, while silver advanced 10.5 cents to settle at $13.165 an ounce. Overseas, the industrial metals market advanced, helped by the Fed''s Beige Book report, which showed the U.S. economy developed at a moderate rate in the first part of the second quarter.

Nickel surged nearly 5 % and copper gained more than 2 % before the close of the London Metal Exchange. Zinc, lead, aluminum and tin also advanced. On the Nymex, copper prices rose 7.95 cents to end at $3.3925 a pound.

Crude oil and gasoline prices continued to strengthen buoyed by the inventories report on Wednesday from the Energy Information Administration. Crude oil for July delivery increased $1.39 a barrel to settle at $67.65 on the Nymex. July gasoline futures rose 6.94 cents to close at $2.2247 a gallon.

On the Chicago Board of Trade, wheat prices rallied to a 10-year high on heavy rains in the Plains. July wheat futures climbed 17 cents to settle at $6.064 a bushel on the CBOT. Corn and soybean prices followed wheat, with July corn rising 5 cents to close at $4.094 a bushel and soybeans gaining $1.60 to end at $8.274 a bushel.