Alcoa and Genentech Lift Markets

Elena
11 Oct, 2005
New York City

Asian markets closed mostly higher with the Nikkei rising 2.5% after the long weekend on strong machinery and bank stocks. European stocks were also higher at mid-day , led by the German DAX 30, up 0.7%. Alcoa reported Q3 better-than-expected earnings of 33 cents a share, beating estimates of 29 cents. Genentech, biotechnological company, announced Q3 net earnings of 33 cents a share, up from 21 cents a share last year on operating revenue growth, topping analyst estimate of 30 cents.

U.S. MARKET AVERAGES

U.S. stock futures predict a higher opening of Tuesday session with the start of the new earnings season after the closing bell yesterday when Alcoa and Genentech Inc. released better-than-expected quarterly profit. Other technology companies are also expected to report results.

Genentech Inc., the world's second-biggest biotechnology company announced Q3 56% profit rise on sales of its colon cancer drug Avastin and other products.

Dow component Alcoa Inc., the world's biggest aluminum producer, saw its shares rise 2% in after-hours trading on Monday after reporting slightly higher third-quarter net income.

Apple Computer Inc. and chipmaker Advanced Micro Devices Inc. are scheduled to release earnings reports today. Gannett Co. Inc., the publisher of USA Today, is reporting results before the opening bell.

S&P 500 futures were up 4.1 points, above their fair value. Dow Jones industrial average futures were up 31 points, while Nasdaq 100 futures were up 7 points.

Inflation may come back into focus as the Federal Reserve releases minutes from its September 20 monetary policy meeting at 2 p.m.

INTERNATIONAL MARKET NEWS

Asian-Pacific benchmarks closed the trading session mostly higher. The Nikkei advanced 2.5% after the long weekend, rebounding from last-week sharp declines on the back of strong bank and machinery stocks. Across the region, South Korea’s Kospi gained 1.4% on sensitive to domestic consumption stocks. Hong Kong’s Hang Seng added 0.3%, while Australia’s All Ordinaries fell 0.8%.

European markets advanced at mid-day dealings on signs of improving retail sector in the U.K. and strong earnings report from a Roche Holdings’ subsidiary Genetech. The markets shrugged off Wall Street declines overnight. The German DAX 30 added 0.7%, the French CAC 40 rose 0.7%, and London’s FTSE 100 gained 0.4%.

ENERGY, METALS, CURRENCIES

Oil prices rose over $62 a barrel on a report of the International Energy Agency, saying that fuel demand was not badly hurt and could lead to shortages during the winter.Light sweet crude for November delivery gained 87 cents to trade at $62.67 a barrel on the Nymex. London Brent added 72 cents to $59.50..

In European trading gold prices climbed near a 17-year high on higher energy costs which increased the appeal for the precious metal, seen as a hedge against the inflation. In London gold December contract traded at $475.50 per troy ounce, up from $473.60. Markets in Hong Kong were closed for a holiday. Silver opened unchanged at $7.76.

In European trading the U.S. dollar traded mixed against its major counterparts. The euro was quoted at $1.2403, down from $1.2052.The dollar changed hands at 113.89 yen, down from 114.20. The British pound was trading at $1.7553, up from $1.7537.

EARNINGS NEWS

Alcoa Inc. (AA)), aluminum producer, posted Q3 net earnings of 33 cents a share, up from 32 cents in the same time last year on revenue growth, beating analysts’ expectations of 29 cents a share.

Genentech Inc. ((DNA)), biotechnological products producer, announced that Q3 net earnings advanced to 33 cents a share, up from 21 cents a share in the same time last year on operating revenue growth, topping analyst estimate of 30 cents a share. Excluding one-time items, earnings totaled 35 cents a share.

Ault Inc. ((AULTE)), power conversion product maker, posted a Q1 net loss of 9 cents a share, down vs. a net loss of 2 cents a share in the same period last year on revenue decline.

Robbins & Myers, Inc. ((RBN)), pharmaceutical, energy, and industrial products maker, posted Q4 net income per share of 16 cents, including restructuring expenses of 10 cents per share, or income of 26 cents per share on a pre- restructuring basis. Q4 sales were $10.5 million higher than sales in the comparable period a year ago. The income per share in the comparable period last year was 24 cents.

Sycamore Networks Inc. ((SCMR)), provider of telecommunications switching technology, announced that net income for Q4 advanced to 1 cent a share, up from a loss of 3 cents in the year-ago period on revenue growth.