Home Depot Leads U.S. Market to Higher Opening

Elena
20 Jun, 2007
New York City

U.S. stocks advanced in pre-open trading on Wednesday, boosted by higher-than-expected earnings from Morgan Stanley and lower bond yields. Morgan Stanley advanced 2.2% after posting 40% earnings increase, beating analyst estimates. Positive sentiment was also generated by a $22.5 billion share buy-back from Home Depot. The Dow component shares jumped 6.2% in the pre-open.

[R]9:00AM U.S. stock futures advanced, boosted by Morgan Stanley earnings and $22.5 billion buyback at Home Depot.[/R]

U.S. stocks advanced in pre-open trading on Wednesday, boosted by higher-than-expected earnings from Morgan Stanley and lower bond yields. The bond market has continued its recovery, with the benchmark 10-year Treasury bond was down 5/32 to 95 11/32, yielding 5.103%.

Morgan Stanley ((MS)) advanced 2.2% after posting 40% earnings increase, beating analyst estimates. Positive sentiment was also generated by a $22.5 billion share buy-back from Home Depot ((HD)). The Dow component shares jumped 6.2% in the pre-open.

Among other pre-market highlights, Circuit City ((CC)) dropped 2.6% in the pre-open after the electronics retailer posted Q1 loss of $54.6 million, or 33 cents per share, compared with a profit of $6.4 million, or 4 cents a share. Revenue fell 4% to $2.49 billion from $2.6 billion a year ago, as more customers purchased low-margin products. Analysts had expected a loss of 32 cents per share on revenue of $2.44 billion.

Shares of FedEx Corp. ((FDX)) moved slightly higher after it reported a 7% quarterly profit increase. Futures for the Dow Jones Industrial Average were up 55 at 13,810, while those for the S&P 500 index rose 4.70 points to 1,553.


[R]8:15AM Morgan Stanley reported 40% earnings increase in Q2.[/R]

Morgan Stanley ((MS)) announced that its Q2 net income rose 40% to $2.58 billion, or $2.45 a share, from $1.84 billion, or $1.75 a share a year ago. Company’s revenue increased 32% from the previous year to $11.5 billion. Quarterly results exceeded expectations of net income of $2.01 a share on revenue of $10.03 billion. The No. 2 U.S. investment bank attributed the earnings rise to fees from advising clients on acquisitions and stock trading. The stock jumped 1.7% in pre-market trading.


[R]7:30AM NY-6:30PM Mumbai Sensex spurts 116 points in a broad rally, led by banks and auto stocks.[/R]

The Sensex on BSE finished 116.45 points, or 0.81%, higher at 14,411.95.

The market-breadth was very strong as 1,446 stocks advanced, while 1,103 declined and 87 were unchanged. Of the 30 stocks in the Sensex, 23 advanced, while only seven declined. The turnover on BSE was Rs 5,049 crore, much higher than Rs 4,607 crore on Tuesday. On NSE, the turnover was Rs 9,977 crore, compared to Rs 8,350 crore on Tuesday.

Economic news

The rupee retreated Wednesday as an oil refiner bought dollars, but expectations of foreign investment flows into a $2.1 billion domestic share sale by ICICI Bank diminished losses. In morning trading, the rupee was at 40.83 per dollar, down from 40.79 on Tuesday.

India will approach the World Bank to take out a loan to develop an e-governance project to process all government purchases.

The petroleum ministry intends to offer additional 80 oil and gas blocks in the seventh round of auction under the New Exploration Licensing Policy, in mid-August. In February, under NELP-VI, the ministry gave 52 blocks of which 21 deep-water blocks to Oil and Natural Gas Corporation.

Trading highlights

Divi''s Lab was the most-active stock with a turnover of Rs 165 crore followed by Reliance Capital and Educomp Solutions.

Advancers

Cement major Gujarat Ambuja Cements advanced 4.6% to Rs 118, led the gainers. Other cement stocks gained as cement shortage is expected to last for the next two years. ACC was up 0.8% to Rs 850 and Grasim advanced 3.1% to Rs 2,513.

State Bank of India rallied nearly 4% to Rs 1,425 on the news that the bank plans to sell $225 million abroad in perpetual bonds. HDFC gained 2% to Rs 1,812. ICICI Bank added 0.4%, to Rs 948 after the reports that the Singapore government intends to buy about 40% of ICICI record share sale.

Autos were in focus. Tata Motors rallied 3.5% to Rs 686. Tata Motors intends to raise $450 million overseas by selling shares to meet the capital and product development expenditure in view of its growth projects. Maruti advanced nearly 3% to Rs 773, and Bajaj Auto added 2% to Rs 2,162.

BHEL and Larsen & Toubro ended up around 1.7% each to Rs 1,430 and Rs 2,028, respectively. Index heavy Reliance Industries gained 0.3% to Rs 1,732. IT stocks ended mixed with Wipro 0.5% to Rs 524 higher and Satyam Computers, up 0.7% to Rs 472.

Decliners

Ranbaxy plunged 2% to Rs 352, and led the few decliners. TCS dropped 1.3% to Rs 1,146. Hindustan Lever lost 0.3% to Rs 189 and Infosys dipped 0.1% to Rs 1,954.


[R]6:30AM European market gain Wednesday on strength in banking stocks, insurers.[/R]

European markets advanced on Wednesday morning. The German DAX index rose 0.9% to 8,100,66 after striking a seven-year high of 8,104.39 early in the session, while the French CAC-40 index advanced 0.5% to 6,099.46. The U.K. FTSE 100 index climbed 0.5% to 6,682.50. National benchmarks advanced in all of the 17 western European markets that were open.

Advancers

Car maker Renault gained %, while Allianz of Germany advanced 2.6%. HSBC gained 1.1 %. Lower bond yields increase the value of debt owned by insurers and banks. Clariant, the world''s second-largest maker of specialty chemicals, climbed 2.2%
Misys, a U.K. provider of software for banks and hospitals, rose 3% after the company reported fiscal 2007 earnings and margins topping estimates..

Decliners

Swedish clothing chain H&M slipped 4% after it reported that second-quarter sales and profits just missed expectations. Still, the shares have been trading strongly in the past few years and touched a 10- year high in April.

DSG International, the operator of electronics retailers under the PC World and Currys names, announced annual adjusted profit before tax dropped 5% to 295.1 million pounds, in line with estimates the company gave in May, while sales rose 14% to 7.93 billion pounds.

Commodities

Oil prices declined Wednesday on caution that a U.S. fuel supplies report due later in the session will show increases in oil product inventories but a fall in crude oil stocks. Crude oil for July delivery, which expires later Wednesday, lost 15 cents to $68.95 a barrel in electronic trading on the New York Mercantile Exchange.

Gold fell for the first time in a week as a decline in the price of oil diminished the appeal of the precious metal. Gold declined $1.80, or 0.3%, to $659.65 an ounce, the first drop since June 12. Silver fell 3 cents, or 0.2%, to $13.31 an ounce.

Currencies

The euro traded higher against the U.S. dollar on Wednesday despite a new report that showed producer prices in Germany advanced last month. In morning European trading, the euro bought $1.3423, up from $1.3406 in New York late Tuesday. The Japanese yen fell to 123.23 yen from its level Tuesday of 123.35 yen. The British pound edged lower to $1.9878 from $1.9879 on Monday.