Getty Images Plunges 13%

Elena
02 Aug, 2007
New York City

Wall Street opened moderately higher, driven by strong corporate profits and positive economic data. Nokia rose 8% as its Q2 profit doubled and its operating margin reached highest levels in three years. Starbucks gained 2.2% on earnings and sales growth, while Viacom rose 2.7% on stronger-than-forecast Q2 profit. On the economic news front, the Labor Department report said that weekly jobless claims in the latest week rose 4,000 to 307,000.

[R]09:45AM Wall Street opened in the positive, reflecting strong earnings.[/R]

Wall Street opened moderately higher, driven by strong corporate profits and positive economic data. Nokia ((NOK)) rose 8% as its Q2 profit doubled and its operating margin reached highest levels in three years. The world's largest mobile phone maker earned 2.82 billion euros, up from 1.14 billion euros last year, with sales up 28%. The company increased its global market share to 38%, up from 34% a year ago.

Starbucks ((SBUX)) gained 2.2% on earnings and sales growth, while Viacom ((VIA)) rose 2.7% on stronger-than-forecast Q2 profit. Further in earnings news, Getty Images ((GYI)) posted 45% earnings jump on higher revenue, but the stock dropped 13% due to a decline in traditional segments. Unilever ((UL)) drew attention after it said 2007 sales will hit the upper end of its target. The stock rose 3%.

On the economic news front, the Labor Department report said that weekly jobless claims in the latest week rose 4,000 to 307,000. In early trading, the Dow Jones industrial average rose 26.66, or 0.20%, to 13,389.03.The Standard & Poor's 500 index rose 3.25, or 0.22 % to 1,469.06, and the Nasdaq composite index rose 7.48, or 0.29%, to 2,561.35. Bonds held steady, with the yield on the benchmark 10-year Treasury note at 2.79%, the same as late Wednesday.


[R]9:15AM New York, 2:00PM London – European banks kept interest rates unchanged.[/R]

The Bank of England kept the interest rates unchanged at 5.75% and the European Central Bank left interest rates unchanged to 4%. After several successive rate hikes in the last twelve months banks are still assessing the impact of increased interest rates on the economies of Europe and the U.K.

With the highest rates among the Group of Seven nations, UK is likely to stay put on interest rates at least for the next meeting. UK has targeted inflation rate of 2% but in the recent months inflation has exceeded that. With the rising economic growth businesses have managed to pass price hikes to customers fueling inflation to 3.1% in March before settling to 2.4% in July. Majority of the economists are project annual economic growth between 2.5% and 3% for the current fiscal year in the UK.

The 13-member nations group where euro is the currency is experiencing one of the lowest unemployment levels in decades. The rising fuel prices and falling levels of unemployment have forced bankers to keep rates high in the euro zone. The rates are likely to be revised higher after September meeting but lot depends on cost of fuel and food and widening contagion of credit losses from the U.S. to Europe. The inflation in the region has remained below 2%, banks target, but there enough inflationary pressures in the pipeline. The unemployment in the region is hovering around 6.9%.

After the news on interest rates the euro and the pound traded nearly unchanged and stock markets in the region edged up a fraction. Most market analysts and economists had factored that rates will not be revised.


[R]09:00AM U.S. stock futures pointed higher, driven by strong earnings from Nokia, Starbucks.[/R]

U.S. stock futures pointed to some recovery Thursday, although investors remained cautious amid fears that a tightening in U.S. lending could hurt corporate and economic growth. Market also welcomed news that both the Bank of England and the European Central Bank interest rates unchanged, in line with expectations.

Nokia ((NOK)) jumped over 7% in pre-market trading after it said its Q2 earnings more than doubled. Eastman Kodak Co.((EK)) and Viacom ((VIA)) reported better-than-expected quarterly results. Further in earnings news, Lenovo Group posted a 12-fold jump in quarterly profits, beating analyst expectations.

Walt Disney & Co. ((DIS)) edged up after posting a 5% profit rise and agreed to buy Club Penguin for $300 million. Starbucks ((SBUX)) added 1.2% after it reported an in-line-with-estimate 9% profit rise on 20% sales growth.

On the economic news front, the Labor Department report said that weekly jobless claims in the latest week rose 4,000 to 307,000. After early losses, S&P 500 futures rose 3.1 points at 1,473.00 and Nasdaq 100 futures added 6 points at 1,966.50. Dow industrial futures rose 22 points.


[R]8:15AM Eastman Kodak swung to profit in Q2.[/R]

Eastman Kodak ((EK)) said Thursday it swung to a Q2 profit, benefiting from lower costs, a $31 million increase in traditional earnings and a $97 million increase in digital earnings. During the quarter, the company earned $592 million, or $2.06 a share, compared with a loss of $282 million, or 98 cents a share last year, easily beating estimates of 39 cents per share on revenue of $10.19 billion.

The company posted a loss from continuing operations of $135 million, or 47 cents a share vs. a loss of $355 million, or $1.24 a share, a year ago. Eastman Kodak said quarterly net sales declined 6.6% to $2.51 billion. The company’s sales in its consumer digital imaging group fell to $1 billion from $1.11 billion a year ago, while sales in its graphic communications unit gained 2% to $929 million. The company expects 2007 revenue decline on the range of 4% to 7%.