Weak Start at Opening

Elena
27 Sep, 2005
New York City

Asian markets closed mixed with South Korea's Kospi and Australia's All Ordinaries at all-time highs. The Nikkei lost 0.6% after Monday's four-year peak. European stocks trade mixed, pressured by rising oil. The consumer spending report due out later in the day is expected to show that confidence index dropped to 95 from 105.6 in August on soaring gasoline prices.

U.S. MARKET AVERAGES

U.S. stock futures predict Tuesday opening of the trading session at the flat line or slightly below. Pre-market dealings are influenced by retreating oil prices which have recently fallen to $65.23 a barrel after a sharp rise on Monday, following somewhat relieved markets by the news that Rita had caused less damage than expected. Prices then rebounded on concerns of fuel supply as the real impact was not totally assessed and many refineries were shut down.

While crude-oil prices decline, investors are concerned that high fuel costs could have hurt consumer spending in the period during which Katrina struck.
The Conference Board's consumer confidence index likely dropped to 95 from 105.6 in August as gasoline prices soared.

INTERNATIONAL MARKET NEWS

Asian-Pacific benchmarks closed broadly higher, led by all-time high indexes in South Korea and Australia. Seoul’s Kospi rose 0.3% to 1,209,63, adding to Monday’s gains of 2.6%, boosted by banking stocks. Sydney’s All Ordinaries climbed 0.3% to 4,629 with BHP Billiton and Macquire Bank among the gainers. Across the region, rising oil capped gains and The Nikkei lost 0.62%, while Hong Kong’s Hang Seng fell 0.55%. The dollar traded at 112.34 yen.


European markets traded lower at mid-day, pressured by renewed oil prices rise. The oil and gas sectors posted strong gains, boosted by oil majors like BP, Royal Dutch Shell, and France’s Total. The German DAX 30 shed 0.2%, the French CAC 40 lost 0.2%, while oil-heavy London’s FTSE 100 added 0.2%.

ENERGY, METALS, CURRENCIES

Oil prices retreated, following a broad rally session Monday but still causing concerns over oil supply as the damage to the refinery is still being assessed. Light sweet crude November delivery slipped 38 cents to $65.44 a barrel in electronic trading on the Nymex. Heating oil lost 2 cents to $2.0375a gallon, while gasoline was up almost a cent to $2.1374. London Brent declined 25 cents to trade at $63.80.

Gold advanced in European trading. In London the precious metal traded at the recommended price of $465.65 per troy ounce, up from $463.30. In Hong Kong gold rose $4.40 to close at $465.95. Silver traded at $7.29, up from $7.27.

The U.S. dollar advanced against the other major currencies in European trading. The euro was quoted at $1.2076, down from $1.2146. The dollar changed hands at 112.05 yen, up from 111.65. The British pound was trading at $1.7784, down from $1.7891.

EARNINGS NEWS

Pepsi Bottling Group Inc., ((PBG)) bottler of Pepsi-Cola beverages, reported 3Q net income increased to 82 cents per share, up from 73 cents per share in the a year ago period on strong sales of Aquafina, Tropicana and Lipton teas in the U.S., meeting analysts' forecasts for profit of 78 cents per share on sales of $3.14 billion. Excluding a 4-cent gain related to a high fructose corn syrup litigation settlement in the latest quarter, and a 2-cent increase from the settlement of certain international tax audits last year, Pepsi earned 78 cents per share against 71 cents for the same period last year. Revenue advanced to $3.21 billion from $2.93 billion last year.

Jabil Circuit,((JBL)) electronic circuit board assemblies, subsystems and systems producer, reported 4Q earnings of 34 cents a share, up from 22 cents a share in the same period last year on 25% revenue growth. Excluding one-time items, Jabil posted earnings of 37 cents a share, up from 27 cents a year earlier. By that measure, the company tops analysts’ estimates of a profit of 36 cents a share.

Lennar,((LEN)) homebuilder, reported 3Q net income advanced to $2.06 per share, up 50% vs. $1.36 per share in the same period last year, beating analyst estimate of earnings of $1.98 a share. The company lifted its target for full-year 2005 earnings per share to $8.10 from $7.80 and announced new orders in the 3Q advanced 24% from a year earlier.

Stride Rite Corp. ((SPR)) footwear marketer, reported 3Q profit earnings of 21 cents a share, up from 16 cents in the same time last year on sales growth, beating the analysts’ estimate of 17 cents a share.

CORPORATE NEWS

Audiovox ((VOXX)) announced an intention to take an inventory mark down of about $3.7 million. The step has been taken largely because of a competitor's unexpected sharp price cuts for satellite radios. The company now expects to lose from 16 to 18 cents per share in the third quarter on revenue of about $123 million, which is below previous revenue forecast of $135 million.