Intel Gains on Improved Revenue Forecast

Elena
10 Sep, 2007
New York City

Wall Street opened higher Monday, lifted by investor optimism that surprisingly weak employment report will lead the Fed Reserve to cut interest rates at its policy-setting meeting next week. A notable strength in the tech sector also contributed to the early gains. Intel rose 1.3% after the chip maker lifted its Q3 revenue forecast on stronger-than-expected chip demand. Advanced Micro Devices climbed 2.9% after it launched Its latest microchip, Barcelona.

[R]09:45AM Wall Street rebounded on rate-cut optimism and strong tech stocks.[/R]

Wall Street opened higher Monday, lifted by investor optimism that surprisingly weak employment report will lead the Fed Reserve to cut interest rates at its policy-setting meeting next week.

A notable strength in the tech sector also contributed to the early gains. Intel ((INTC)) rose 1.3% after the chip maker lifted its Q3 revenue forecast on stronger-than-expected chip demand. Advanced Micro Devices ((AMD)) climbed 2.9% after it launched its latest microchip, Barcelona, which is designed to be the heart of corporate server networks.

Among declining stocks on the tech-dominated Nasdaq, Yahoo ((YHOO)) slipped 2.9% on speculations that it will retain the Web-search-advertising businesses that it had planned to outsource to Google ((GOOG)).

Bucking the upward move, Countrywide Financial ((CFC)) dropped 4% after the mortgage lender said it may reduce up to 12,000 jobs. Washington Mutual Inc. ((WM)) slid 3.2 % after it said it may set aside $500 million more than it had previously planned for loan losses in 2007.

The Dow Jones industrial average rose 63.24, or 0.48%, to 13,176.62. The Standard & Poor's 500 index rose 5.71, or 0.39%, 1,459.26, and the technology-heavy Nasdaq composite index was up 19.28, or 0.75%, at 2,584.98.


[R]09:00AM U.S. stock futures pointed to a steady opening.[/R]

U.S. stock futures were indicating a flat opening Monday, recovering from heavy losses in the previous session inflicted by unexpected employment decline. Investors were also awaiting speeches from Fed Reserve officials expected to give a clue about the central bank's reaction to the weaker-than-expected U.S. employment report Friday.

In a light economic agenda, the Fed Reserve is scheduled to release its consumer credit report. The report is expected to show that Americans tacked on debt at a slower pace in July compared to the previous month, due to higher gas prices rose and weakness in the housing market.

Among companies in focus, Countrywide Financial ((CFC)) fell over 1% in pre-market trading after the mortgage lender said it may reduce up to 12,000 jobs in areas impacted by lower mortgage-market origination volumes. Advanced Micro Devices ((AMD)) jumped 2.7% as the chip maker launched its latest microchip, Barcelona, which is designed to be the heart of corporate server networks.

In other corporate news, Philips Electronics ((PHG)) lifted its margin targets. S&P 500 futures eased a half-point at 1,459.30 and Nasdaq 100 futures were unmoved at 1,970.50. Dow industrial futures slipped 24 points.


[R]7:00AM New York, 8:00PM Tokyo - Japanese stocks opened week in the red after economy shrank 1.2% in second quarter. Tokyo banks’ lending rises 0.5% in August. Yen rallies most in a fortnight.[/R]

Japanese stocks fell sharply Monday pulled back by negative economic news at home and in the U.S. Tokyo added to the losses started last week, fell 2.2% today. Property and financial stocks dropped heaviest. Of the 225 Toko shares, 206 shares fell, only 13 gained and 6 remained unchanged. Of the index shares, 28 stocks dropped over 4%.

In Tokyo trading Nikkei 225 plunged 2.22% or 357.19 to 15,764.97 on increased selling pressure. Investors were jittery over a contracting economy in Japan and higher job losses in the U.S. Exporters dropped after yen rose to 113.10 against dollar from 113.38 Friday and over 115 beginning of last week. Analysts expect the yen to touch a high of 111 per dollar this week.

Japanese Government announced Monday the economy shrank an annualised 1.2% in the second quarter to June, lower than initial forecast of 0.5% growth. The contraction corresponds to a 0.3% drop from the first quarter and is the first negative economic growth since 2004 year-end quarter, measured in term of GDP.

The Bank of Japan reported today Japan’s money supply indicator increased 1.8% in August from a year ago. The average daily balance of M2 plus certificates of deposit came to 723.6 trillion yen. M2 consists of cash in circulation, demand deposits and quasi-money. The bank said again Monday the average daily balance of domestic bank lending rose 0.5% to 387.02 trillion yen in August from 12 months ago The loan balance, excluding loans by credit cooperatives, was adjusted for special factors — loan securitisation, exchange-rate fluctuations and the allocation of loan-loss reserves.

Real estate, financial and technology shares declined most in Tokyo. Of the Nikkei 225 stocks, Topy Industries Ltd paced decliners slumping 7.7% followed by Shimizu Corp that plunged 7.1%. Technology group, Sony Corp fell 6.03%, Okuma Corp down 5.8% and Resona Holdings lost 5.6%.

Of the Nikkei 225 index stocks, property shares Kajima Corp lost 5.44%, Heiwa Real Estate closed lower 5.34% while Tokyu Land Corp, Mitsui Fudosan, Sumitomo Realty and Mitsubishi Estate Co fell 4.7%, 4.67%, 4.5% and 3.8% respectively. Financials Mistubishi UFJ and Sojitz Corp dragged 4.93% apiece. Chiba Bank Ltd, Chiyoda Corp, Shizuoka Bank, Marubeni Corp lost over 3.5%. Industrial and steel companies dropped too.

Of the index shares, Nippon Suisan led gainers rising 4.8% followed by Daikin Industries up 4% and Mitsubishi Electric Corp added 3.6%. Kyowa Hakko KOG and Denki Kagaku ended up 2.4% and 2.3% respectively.