Oil and Dollar Lift Stocks

Elena
04 Oct, 2005
New York City

Asian-Pacific markets closed mostly up on exporter issues, boosted by stronger dollar. The Nikkei reached a new four-year high, rising 1.6% to 13738.84 points on strong semiconductor sales. European stocks gain on automotive shares, but oil-heavy U.K.'s FTSE declines 0.2%. Chesapeake Energy has agreed to buy Columbia Natural Resources for $2.2 billion in cash and $75 million in debt.

U.S. MARKET AVERAGES

U.S. stock futures predict opening above the flat line after the mixed performance Monday. Energy prices, stronger dollar against the yen and weaker automotive sector weigh on the market sentiment. Crude-oil prices have fallen below $65 a barrel after the government announced a decision to release heating oil stockpiles to suppress supply concerns, but natural gas rose to $14.046 per million British thermal units.

Factory orders are due out later in the day expected to rise 1.2% in August after a 1.9% fall in July. But markets will be looking to Friday's data, when monthly non-farm payrolls comes out.

Dow Jones futures were recently up 14 points, S&P 500 futures were up 1.7 points and Nasdaq 100 futures added 1 point.

INTERNATIONAL MARKET NEWS

Asian-Pacific benchmarks finished higher on a third consecutive rise of U.S. markets overnight and strong dollar against the yen, giving a boost to exporter-related issues. The Nikkei advanced on strong world semiconductor sales data and reached a new four-year high at 13738.84 points to close at 1.6%. Canon, Kyocera Corp., and Honda Motor were among the leading gainers. In South Korea markets gained 1.8%, while in Hong Kong lost 0.1%. The dollar traded at 114.12 yen.

European markets gained ground at mid-day trading on strong auto sector with the German DAX 30 rising 0.4% and the French CAC 40, up 0.5%. Oil-heavy London’s FTSE 100 fell 0.2% after crude-oil prices dropped and BP warned that it wouldn’t be able fulfill its output goal. The euro was traded at 1.1933.

ENERGY, METALS, CURRENCIES

Oil prices declined below $65 a barrel on indications, given by the U.S. government, that heating oil stockpiles might be released to fight supply disruptions. Light sweet crude for November dropped 70 cents to $64.77 a barrel in electronic trading on the Nymex. Heating oil fell 1 cent to $2.0623 a gallon, while gasoline slightly fell to $2.9412a gallon. London Brent lost 86 cents to $61.94.

Gold prices climbed in European trading. In London the precious metal traded at $467.50 per troy ounce, up from $465.50. In Hong Kong gold gained $3.20 to close at $467.45. Silver traded at $7.40, up from $7.36.

In European trading the U.S. dollar traded mixed against the other major currencies The euro was quoted at $1.1934, up from $1.1909. The dollar changed hands at 114.26 yen, up from 114.20. The British pound was trading at $1.7571, down from $1.7540.

EARNINGS NEWS

CMGI Inc. ((CMGI)), a provider of electronic business services, reported a quarterly profit of $274,000, or break-even per share, up vs. a loss of $6.8 million, or 2 cents per share in the year-ago period on sales growth. The latest results incorporate $10.4 million in charges related to regulatory compliance, amortization of intangible assets and stock-based compensation.

Weider Nutrition International ((WNI)), seller of vitamins and other various nutritional supplements, posted Q1 earnings of 18 cents a share, up from a year-earlier profit of 14 cents a share on an increase in demand for branded products. Sales increased to $48 million from $43.7 million in the same period a year ago. No estimate has been published for the company's results. The company added though that gross margins declined by higher raw material costs.

CRYO-CELL International ((CCEL)), cord blood bank, announced Q3 net income of 5 cents per share, down from 16 cents per share in the year-ago period. Consolidated revenues for the quarter were approximately $3.8 million, up 17% from approximately $3.2 million for the comparable quarter last year. Net income for the 2004 period included $1.6 million from the reversal of all prior accruals related to the PharmaStem litigation during the third quarter
of 2004, as a result of the favorable ruling by the Court on post-trial motions in that case.
Without the accrual reversal, net income in the third quarter of 2005 increased approximately $300,000 compared to the 2004 period due to a 17% increase in revenue.

CORPORATE NEWS

Chesapeake Energy has agreed to buy Columbia Natural Resources from Triana Energy Holdings for $2.2 billion in cash and $75 million in debt. The deal will amass the third largest gas reserves in the U.S. after Exxon Mobil and ConocoPhillips.

The second-largest global oil company BP warned it won't meet 2005 production targets. The disappointing forecast and the expected profit decline of $700 million are largely due to Hurricanes Rita and Katrina.