Surging Oil Drags on Market

Elena
19 Sep, 2005
New York City

Asian-Pacific markets closed mostly higher with Shanghai's Composite up 0.6% and India's BSE 30 up 0.5%. The Japanese and Hong Kong's exchanges were closed for holidays. The German DAX 30 tumbled 1.3% on post general election uncertainty over economic reforms. Nike posted better-than-expected quarterly results with earnings of $1.61 a share, beating expectations of $1.42.

U.S. MARKET AVERAGES

U.S. stock futures indicate a lower opening of the Monday session as crude-oil prices have risen more than $1 on the threat of another tropical storm approaching the Gulf Coast and expectations of FOMC’s decision of interest-rate increases Tuesday. Although a pause of the interest-rate hikes was expected as it was considered a good support to the economic recovery, economists now tend to see an increase of the benchmark rate by 3.75%.

S&P 500 futures slipped 1.8 points. Dow Jones industrial average futures fell 20 points, while Nasdaq 100 futures slid 2.5 points.

MOVERS AND SHAKERS

Blockbuster shares dipped 1.3% to $4.70 on the Inet electronic brokerage network from the $4.76 close on Friday on the Nymex after the company’s CEO said that the whole rental industry ’is in the tank’.

Ebay eased 2.2% to $36.30 on Inet from the $37.10 Nasdaq close after Bear Stearns downgraded the stock to ‘peer perform’ from ‘outperform’.

Nike Inc. rose after it reported better-than-expected quarterly earnings of $1.61 per share vs. expectations of $1.42 Its shares climbed 5.9% to $83.05 on Inet, up from a $78.46 NYSE close.

INTERNATIONAL MARKET NEWS

Asian-Pacific benchmarks ended generally higher, lifted by special treatment shares of companies which have reported losses for two successive years. The Japanese and Hong Kong stock markets were closed for holidays. Among the regional markets, Shanghai’s Composite rose 0.6%, South Korea’s Kospi gained 0.4%, and India’s BSE 30 added 0.5%. In currency markets the dollar bought 111.42 yen.

European stocks were trading mostly down at mid-day with the German DAX 30 declining 1.3% after the general election brought uncertainty and caused concerns over the pace of economic reforms. The French CAC 40 fell 0.1%, while London’s FTSE 100 added 0.1% on deals and restructuring talk. The euro lost 0.8% to $1.2142.

ENERGY, METALS, CURRENCIES

Oil prices advanced more than $1 on tropical storm Rita approaching the Gulf Coast and speculations of a new interest-rate increase. U.S. light sweet crude October delivery rose $1.20 to $64.20 a barrel.

Gold prices reached a 17-year high as the appeal for the precious metal increased on inflation concerns and uncertainty about U.S. economy. Since last week the precious metal has risen 4%. In London gold traded at $461.95 per troy ounce, up from $458.70. Silver opened at $7.20, up from $7.03.

The U.S. dollar climbed against the other major currencies in European trading. The euro was quoted at $1.2132, down from $1.2225. The dollar changed hands at 111.42 yen, up from 110.33. The British pound traded at $1.8003, down from $1.8059.

EARNINGS NEWS

Nike Inc., ((NIKE)) footwear and apparel maker, posted 1Q earnings of $1.61 a share, up from a year-earlier profit of $1.21 a share on 8% revenue growth, beating analyst estimate of $1.42 a share.

Steelcase, ((SCS)) office furniture company, posted 2Q earnings of 9 cents a share, up from a nickel a share in the year-earlier period on 8% revenue growth, missing analysts’ forecasts of 14 cents a share.

Sycamore Networks, Inc. ((SCMRE)) optical networking company, reported 3Q net loss on a generally accepted accounting principles (GAAP) basis was 4 cents per share, flat with the year-ago period. 3Q non-GAAP net loss was 0 cents a share, up from 3 cents per share in the same period last year. 3Q revenue was $17.8 million, up vs. $14.7 million in the year-ago period.

Marcus Corp., ((MCS)) operator of movie theaters and hotel properties, posted 1Q earnings of 51 cents a share, down vs. a year-earlier profit of 61 cents a share on revenue growth, beating analyst estimate of 39 cents a share. On a continuing operations basis, the Milwaukee gained $12.3 million, or 40 cents a share in the quarter.

Carnival Corporation & plc ((CCL)) posted record 3Q net income of $1.36 per share, up from $1.22 per share on revenues of $3.61 billion vs. $1.03 billion in the comparable period.

CORPORATE NEWS

Spinnaker Exploration ((SKE)) has agreed to be acquired by affiliates of Norsk Hydro ASA for $65.50 per share in cash. The transaction is expected to be completed in the fourth quarter.

TBC Corp. ((TBCC)) has agreed to be acquired by Sumitomo Corporation of America for $35 per share in cash. The transaction, which is expected to close by the end of the year, has a total value of about $1.1 billion, excluding debt.