U.S. Stock Futures Gain before Housing Data

Elena
26 Jun, 2007
New York City

U.S. stock market looked poised for a higher opening Tuesday, with investors awaiting a report on new home sales, expected to show a decline in May from the previous month. In another report, the Conference Board is due to release its June consumer confidence index. S&P 500 futures rose 3 points at 1,516.60 and Nasdaq 100 futures rose 4 points at 1,945.00. Dow industrial futures rose 14 points.

[R]9:00AM Market to open slightly higher ahead of housing data.[/R]

U.S. stock market looked poised for a higher opening Tuesday, with investors awaiting a report on new home sales, expected to show a decline in May from the previous month. In another report, the Conference Board is due to release its June consumer confidence index.

Among pre-market highlights, homebuilder Lennar ((LEN)) said it swung to a Q2 loss of 244.2 million, or $1.55 per share, vs. a profit of $324.7 million, or $2 per share a year ago, blaming weaker housing market. Analysts had been expecting Q2 profit of 5 cents a share. Quarterly revenue dropped 37% to $2.88 billion from $4.58 billion in the prior-year period, beating analyst estimate of $2.58 billion. The company warned it would report a Q3 loss as well.

Investment management company BlackRock Inc. ((BLK)) said it agreed to buy the fund of funds division of Quellos Group LLC for up to $1.7 billion. The deal, which is expected to complete around Oct. 1, will create a fund of funds operation with more than $25.4 billion in managed assets. S&P 500 futures rose 3 points at 1,516.60 and Nasdaq 100 futures rose 4 points at 1,945.00. Dow industrial futures rose 14 points.


[R]8:00AM NY-7:00PM Mumbai Sensex ends virtually flat in a subdued trading.[/R]

The Sensex on BSE finished 13.36 points higher, or 0.09%, at 14,501.08.

The market-breadth was strong with almost three gainers for every two decliners. As 1,492 stocks advanced, 1,117 declined and 84 remained unchanged. Of the 30 stocks in the Sensex, 15 advanced, 14 declined and one was unchanged. The turnover on BSE was Rs 4,677 crore, higher than Rs 4,316 crore on Monday. On NSE, the turnover was Rs 9,557 crore and was also much higher than Rs 8,308 on Monday.

Economic news

After the State Bank of India announced that it may have to raise $12 billion in the next three years to meet growing loan demands and meet capital requirements, the risk of holding debt of the lender advanced to a three-month high. SBI will use the money to expand its operation in the domestic and international markets. Credit-default swaps based on $10 million of the company's debt advanced 4% to $50,000 from $48,000 yesterday. Any rise in the price of debt indicates the investors’ increased skepticism of the capacity of the bank to repay its debt. The bank said that plans to raise $1.2 billion by the end of this year.

The risk for holding debt in another Indian bank ICICI bank also increased to a six-month high as the bank failed to secure an important government approval to sell a stake of its unit. Credit-default swaps based on $10 million of the company's debt advanced 3% to $70,000 today after surging 4.5% yesterday to almost $68,000.

Trading highlights

Time Technoplast was the most active stock with a turnover of Rs 201 crore followed by Indiabulls Financials and Indiabulls Real Estate.

Advancers

ONGC and Bharti Airtel surged 2% each to Rs 936 and Rs 850, respectively. ONGC reported a 13% decline in net profit to Rs 2,681.64 crore in the fourth-quarter of fiscal 2007 compared to a net profit of Rs 3,085.89 crore in the same period a year ago. Total income advanced nearly 10% to Rs 15,400 crore in fiscal 2007, compared to Rs 14,200 crore in the year ago period.

Bharti Airtel advance was on sustained buying after HSBC raised the price target of Bharti Airtel by 9%, and added that the company will continue to expand market share.

State run engineering large-cap BHEL gained 1.4% to Rs 1,471 as the company secured an order worth Rs 106 crore from Rashtriya Ispat Nigam. Grasim gained 1.4% each to Rs 2,496 and Tata Motors advanced over 1% to Rs 684. Satyam Computers was the only It large-cap which advanced rose 0.4% to Rs 456.

Decliners

Ranbaxy dropped 2.4% to Rs 348 as it was allegedly involved in a cartel of fixing drug prices. Profit taking weighed on cement stocks. Gujarat Ambuja Cements lost 1% to Rs 116 and ACC dipped 1.2% to Rs 846. IT stocks advanced on a weaker rupee until the last hour of trading when they declined. TCS was down 0.3% to Rs 1,122, Infosys Technologies sank 0.7% to Rs 1922, and Wipro lost 1.3% to Rs 509.