Banks, IBM Lift NY Averages

123jump.com Staff
19 Jul, 2007
New York City

New York averages opened with a gain of 0.5% in Dow, Nasdaq and S&P 500. Better than expected earnings from IBM and banks lifted the trading sentiment. Continental reported sharply higher earnings beating the peers in the industry on expansion to international destinations. Avici surge 20% and Juniper Networks gain 10% at the opening on surge in earnings. Economy in china expands at 11.2% in the second quarter, fastest in 12 years. Dollar trades at historic low against euro and pound in Europe.

[R]9:30AM New York – Banks report earnings gains on higher fees and charges.[/R]

Market averages are expected to open higher this morning in New York trading on brighter outlook from IBM and better than expected earnings from banks. Three popular averages, Dow, S&P 500 and Nasdaq opened with over 0.5% gain in the morning trading.

Initial jobless claims at the end of last week dropped 8,000 to 301,000.

IBM ((IBM)) reported earnings of $1.50 per share compared to $1.30 per share a year ago and is looking for annual earnings growth of between 14% and 15% from the previous growth rate of 13% to 14%. Network equipment maker, Juniper Networks reported 15 cents per share and revenue growth of 17%. Citrix Systems ((CTXS)) reported earnings and sales but not the earnings per share. The company forecasted sales for the year between $1.34 billion and $1.36 billion. Avici Systems ((AVCI)) reported 82 cents per share beating the estimates of low 21 cents per share. Motorola ((MOT)) reported earnings per share of 2 cents.

Bank of America ((BAC)) reported earnings, before the open, of $1.28 per share compared to $1.19 from a year ago and beating the estimates of $1.19 per share. The ever increasing fees to individual bank accounts and higher charges at the credit card division helped the bank to power the earnings. Washington Mutual ((WAMU)) earnings per share jumped to 92 cents from 79 cents a year ago. First Horizon National Bank reported earnings of 17 cents per share.

Continental Airlines ((CAI)) reported earnings of $2.03 per share beating the estimates of $1.71 per share. Dow Jones ((DJ)) missed the earnings target of 44 cents and reported 25 cents per share. Genuine Parts ((GPC)) earnings per share of 76 cents met the expectations. Pharmaceutical maker, Wyeth ((WYE)) reported earnings per share of 87 cents beating the estimates of 86 cents.


[R]7:30AM NY-6:30PM Mumbai Sensex soars 249 points in a large-cap rally.[/R]

The Sensex on BSE advanced Thursday 248.96 points, or 1.63% and settled at 15,550.13.

The market opened 56 points higher at 15,357 at the intra-day low. Steady buying in large-cap stocks especially in the latter part of trading saw the market surge to an intra-day high of 15,593.

The market-breadth was positive with three advancers for every two decliners. As 1,503 stocks advanced, 1,104 declined and 70 were unchanged. Of the 30 stocks in the Sensex, only four declined while 25 advanced and one was unchanged.

The turnover on BSE was Rs 5,699 crore, compared with Rs 5,750 crore on Wednesday. On NSE, turnover was Rs 11,591 crore, slightly higher than Rs 11,318 crore on Wednesday.

Economic news

The Finance Minister P. Chidambaram said in an interview yesterday that India must keep its strict monetary policy in order to curb inflation. Indian bonds declined the most in more than a month after the comments. Bond dealers were looking for an interest rate cut after inflation dipped to near a 13-month low last week.

Trading highlights

Spice was the most active stock with a turnover of Rs 695 crore followed by DLF and Zee Entertainment.

Advancers of the Day

Tata Motors advanced 4.7% to Rs 778 and led the gainers on the belief that interest rates will not increases. Companies rely for 75% of auto sales on cheap financing. Bajaj Auto also gained over 4% to Rs 2,382.

Tata Motors is reported to consider a purchase of Jaguar and Land Rover divisions from Ford Motor Company.

Index heavy, Reliance Industries surged 4.2% to Rs 1,896 on a court decision from the Bombay High Court, which on Wednesday, July 18 J 2007, repealed a decision to forbid Reliance Industries to sell gas from its KG basin field to any other firm except Anil Ambani''s Reliance Natural Resources and state-run NTPC.

Cement stocks were boosted by the infrastructure boom. Grasim jumped 3.5% to Rs 2,996. Other cement shares also advanced. JK Lakshmi Cement was up 4.3% to Rs 143 and UltraTech Cement Company gained 1.4% to Rs 969. ACC, volatile during the session, but managed to finish with a gain of 1.5% to Rs 1,150.

Telecom stocks gained on strong buying interest. The second-largest mobile services firm in India, Reliance Communications advanced 2.1% to Rs 579. The company has sold a 5% stake in its telecom tower business, worth 27,000 crore.

Bharti Airtel advanced 1.4% to Rs 896. Bharti Enterprises, the parent of Bharti Airtel announced on Wednesday, July 18 2007, one of its group companies had purchased a 4.99% in the telecom firm from Vodafone. Bharti''s voting interest in Bharti Airtel is now more than 50%.

IT stocks gained in expectation of global merger & acquisition activity. The second-largest IT services company Infosys Technologies surged 2.6% to Rs 1,997 on speculation that it is close to buying the finance and accounting BPO arm of Philips Global.

Wipro bounced back from a low of Rs 494, and was up 0.19% to Rs 505.40. The company reported before market opening, 16% increase in net profit to Rs 710 crore in first-quarter of June 2007, below the market expectations.

Decliners of the Day

Only four stocks in Sensex fell. Hindustan Unilever dipped 0.6% to Rs 198, Reliance Energy lost 0.4% to Rs 686, Cipla declined 0.4% to Rs 205 and Tata Steel, which finished almost flat, down 0.07% to Rs 682.

[R]6:30AM European markets gain Thursday on strong corporate results in tech stocks.[/R]

European stocks advanced Thursday. All 17 markets gained in Europe, except the market in Finland. Of the three major markets, U.K. FTSE 100 index rose 0.8% at 6,618.60, while the German DAX 30 index was up 1% at 7,970.95 and the French CAC-40 index advanced 0.8% at 6,046.29.

In London, stocks gained for the first time in four days, led by Vodafone after the largest mobile-phone company in the world announced the number of subscribers surged by 4.1% in the fiscal first quarter. Vodafone climbed 1.4%.

Miners also advanced as copper prices rose for a second day in Shanghai on concern of lower output from Chile. BHP jumped 2.4% and Rio increased 2.3%. Segro, the owner of five of the U.K. largest business parks, climbed 1.9% as UBS hiked its recommendation on the shares to buy from neutral.

In Frankfurt, German benchmark DAX Index climbed for the first time in three days, led by SAP after the largest maker of business-management software in the world reported earnings that topped analysts'' estimates. SAP rallied 4.7%. The company announced second-quarter profit increased 8.2% to 449 million euros or $619 million, spurred by a jump in license sales in Europe. MAN also advanced 1.4% and Siemens climbed 1.9%.

In Paris, French stocks advanced, as gains were paced by Groupe Danone. Eramet surged after a report that Areva may buy a 37% stake. Danone, the world largest yogurt maker, rose 2.6%. European food and beverage shares advanced after a report that Pepsico and Nestle considered a merger this year. Eramet, which operates the world largest ferronickel plant, soared 13%.

Currencies

The dollar traded near record lows against the euro and the pound Thursday, as the U.S. currency was hit by concerns over the U.S. housing market. The euro rallied to $1.3813 in late morning trading on Thursday, up from $1.3795 overnight in New York, but below the record high of $1.3833 reached in early Wednesday trading.

The British pound also traded near its highest point in more than a quarter-century, trading at $2.0500 Thursday, but down from $2.0533 overnight in New York.

The dollar also slipped against the Japanese yen, falling to 121.87 yen from 121.89 yen in New York late Wednesday.

[R]5:30AM Gold gains Wednesday on inflation worries, oil rallies above $75 a barrel.[/R]

Gold movement depends on four factors including inflation concerns, the movement of the dollar against the euro, bond yields and oil prices. In his comments to Congress Wednesday, Bernanke stated that growth this year will be slightly slower than the Fed had projected in February on weakness in the housing industry with inflation remaining the main concern of the Federal Reserve.

August gold gained $7.80 to settle at $673.70 an ounce on the New York Mercantile Exchange after the Fed’s Chairman speech. September silver settled at $13.29, up 27.2 cents an ounce, while September copper finished at $3.563, up 1.05 cents a pound.

The yield on the benchmark 10-year Treasury note, which rivals gold as a safe-haven investment, declined to 5.01% from 5.07% late Tuesday.

Oil prices settled above $75 a barrel for the first time since August 2006 and gasoline futures rose after the Energy Information Administration reported an unexpected drop in the nation''s gasoline stockpiles.

Crude oil for August delivery surged $1.03 to settle at $75.05 a barrel on the Nymex. Gasoline futures rallied 9.46 cents to close at $2.1953 a gallon.

In Chicago, agriculture futures made a recovery from the sharp decline of the prior two days. November soybeans rebounded 16 cents to settle at $8.765 a bushel on the Chicago Board of Trade. September wheat added 22.25 cents to close at $6.235 a bushel.

December corn rose 5.75 cents to close at $3.425 a bushel. A break of that price could have sparked a fall to the low point of $2.81 a bushel in September, according to investors.