Wynn Resort Surges 13% on Revenue

Elena
07 Aug, 2007
New York City

Wall Street declined at opening Tuesday amid cautiousness ahead of the Fed Reserve''s interest-rate decision and government reports which showed increased labor costs and lower-than-expected Q2 productivity. The Labor Department reported that productivity rose 1.8%, below the 2.1% gain expected by economists. Unit labor costs rose at an annual rate of 2.1%, vs. expectations of a 1.6% gain.

[R]09:45AM Wall Street opened lower ahead of Fed’s rate decision.[/R]

Wall Street declined at opening Tuesday amid cautiousness ahead of the Fed Reserve's interest-rate decision and government reports which showed increased labor costs and lower-than-expected Q2 productivity. The Labor Department reported that productivity rose 1.8%, below the 2.1% gain expected by economists. Unit labor costs rose at an annual rate of 2.1%, vs. expectations of a 1.6% gain.

In corporate news, Wynn Resorts ((WYNN)) surged 13.5% after it said its revenue more than doubled due to strength in Las Vegas and a new casino in Macau. On the side of the losers, Marsh & McLennan Cos. ((MMC)) dropped 5.5% after the largest U.S. insurance brokerage posted a 3% increase in its Q2 profits amid growth in its risk and insurance business. The company also approved a $1.5 billion share- buyback plan.

Among stocks driven by analyst comments, Luminent Mortgage Capital ((LUM)) plunged 31% after it was cut to sell from neutral by UBS. Bear Stearns Cos. ((BSC)) was in focus again amid reports that its CEO has called Merrill Lynch ((MER)) and Citigroup ((C)) executives to reassure them about his company's financial health. The stock gained 1%.

In the first hour of trading, the Dow Jones industrial average was down 48.86, or 0.36%, at 13,419.92 after soaring 286 points Monday. The Dow was down more than 100 in the early going Tuesday. The Standard & Poor's 500 index fell 5.56, or 0.38%, to 1,462.11, and the Nasdaq composite index rose 7.14, or 0.28%, to 2,540.19. The yield on the benchmark 10-year Treasury note rose to 4.75% from 4.74% late Monday.


[R]09:00AM U.S. stock futures indicated a flat start ahead of Fed’s decision.[/R]

U.S. stock futures traded near the flat line Tuesday, following a strong rally the previous session when the Dow hit a 4-year high of 286 points as investors bought financial stocks that suffered weakness in earlier hours amid worries over credit markets. Traders were cautious in pre-market hours, awaiting a Federal Reserve decision on interest rates and its view on risk after the recent troubles in credit markets.

Casino stocks were in the spotlight, with shares of Wynn Resorts ((WYNN)) climbing 9.7% after the casino operator said its Q2 revenue more than doubled due to strength in Las Vegas and a new casino in Macau. Rival Harrah''s Entertainment Inc. ((HET)) added 1% in pre-market trading after it posted 85% profit jump in Q2, due to a strong performance in Las Vegas.

Among companies posting disappointing results, Tyco International ((TYC)) reported a $3.55 billion net loss for the third quarter, due to $3.3 billion in charges. Underlying earnings beat expectations of 55 cents a share. Duke Energy ((DUK)) reported a 17% drop in Q2 net profit, but beat estimates.

In economic news, productivity in the total manufacturing sector grew 1.6% in Q2, as output rose 3.5% and hours increased 1.8%. S&P 500 futures slipped 1.3 points at 1,466.40 and Nasdaq 100 futures lost 2.5 points at 1,960.00. Dow industrial futures gave up 9 points.


[R]8:30AM New York, 9:30PM Tokyo – Asian markets make a feeble attempt to climb. Japan lost most of the day’s gain at the close.[/R]

Asian markets closed lower but select emerging markets managed to close higher. Philippines led the region with a gain of 2.8% followed by 1.1% rise in Australia and fractional gains in India, Japan, and Korea. Taiwan with a loss of 0.9% led the decliners in the region followed by 0.7% in Indonesia, followed by fractional losses in Thailand, Singapore, and Hong Kong. The Shanghai Composite gained 0.5% bucking the regional trend of lower markets for the last one week.

In Hong Kong trading insurance companies fell. China Life and Ping An lost nearly 0.7% dragged by weakness in financial and banking sector across the region. The regional commercial property developer Hong Kong Land reported first half profit increase of 32% to $155 million. The commercial property vacancy rates fell to 3% in Hong Kong but residential market remained relatively soft. The company is enjoying a rising demand from financial services segment. When counting the property valuations gain the profit in the first half jumped to $1.2 billion from $924 million a year ago. Diluted earnings per share jumped to 50.49 cents from 39.92 cents.

Indonesia Central Bank left the key interest rate unchanged to 8.25% meeting the expectations of the most economists. Food and energy prices have been stubbornly high and continue to rise. In July the prices gained 6.1% after rising 5.8% in June. The bank is targeting inflation between 5% and 7%. Rising prices of palm oil and crude oil have forced the government to reduce exports of palm oil. Indonesian currency rupiah edged a fraction lower at close to 9,316 to a dollar.

In Sydney trading Macquarie Bank recovered with a gain of 6.4% after falling more than 15% in the first week of this month. Novo Energy jumped 8% after a takeover offer from Toro Energy valuing the company at A$276 million. Primary Healthcare and Hills Industry edged up a fraction after reporting earnings. Australian Agriculture fell 7% after reporting first half profit decline of 31%. Casino operator, Publishing & Broadcasting jumped 4% and Austar United fell 2% on broker rating revisions.


[R]8:00AM Harrah’s Entertainment Q2 profit jumped 85%.[/R]

Harrah''s Entertainment Inc. ((HET)) posted 85% earnings jump in Q2 to $237.5 million, or $1.25 per share, vs. $128.6 million, or 69 cents per share a year ago, boosted by strong results in Las Vegas and Atlantic City. Quarterly results beat analyst estimates of 98 cents per share.

Las Vegas revenue climbed to $922.5 million from $803.3 million, while Atlantic City revenue increased to $592.6 million from $521 million. The casino operator posted revenue increase of 14% to $2.7 billion from $2.37 billion last year.

However, adjusted results from continuing operations came in below expectations. Income from continuing operations rose to $195.5 million, or $1.03 per share, compared with $128.7 million, or 69 cents per share, a year earlier.


[R]7:00AM New York, 8:00PM Tokyo – Market opened higher but steadily lost its gain the afternoon trading.[/R]

Nikkei 225 closed 7.31 or 0.04% higher to close at 16,921.77. The index opened nearly 1% higher but gave up most of its gains on weakness in banking and commodities related stocks. Topix index fell 0.5% or 7.8 to close at 1,660.01

Toyota is planning to increase its global of production of vehicles to 10.5 million vehicles. According to a report in local business newspaper, the Nikkei Weekly, in a recent meeting with parts suppliers the company is targeting higher global sales to meet rising demand. Toyota last week reported 32% rise in quarterly earnings on 16% gain in sales and planned to produce 8.9 million vehicles in the fiscal year ending in March 2008.

According to Bloomberg news Shinsei Bank Ltd reported accumulated losses from subprime lending in the U.S. of $30 million and has exposure of $200 million to mortgage bond market. After the news the stock jumped 8% but closed 3.3% higher at 430 yen.

Trend Micro, Internet security and software provider, jumped 14% or 500 yen to close at 4,100 yen. The company revised its guidance for the second quarter sales to 25 billion from 22.5 billion yen and earnings to 6.2 billion yen from 3.7 billion yen. The sales were revised up 11% and earnings were revised up 67%.

Japan Steel Works soared 5.8% to close at 1,926 after reporting 300% increase in earnings to 7.9 billion yen.

Softbank said that it has added 224,000 mobile users in the month of July.

Nomura Holdings lost its gain of 3% in the morning trading to close up 0.5% to 2,145 yen. The brokerage company in the previous week had reported a sharp rise in earnings on higher trading and brokerage revenue. Mizuho Financial after reversing from an earlier gain of 2.2% to close 2% lower at 687,000 yen. In the last week the company reported lower that expected earnings.

Oil closed sharply lower in the international markets with a loss of 5% dragging energy and trading companies. Inpex, oil explorer, fell 8% to 90,000 yen. Mitsui & Company fell 5.2% and Mitsubishi dropped 4.5%.