BHP, Prudential Drive UK stocks Higher

123jump.com Staff
23 Oct, 2007
New York City

UK stocks edged higher led by a rally in resources stocks. FTSE 100 index edged 0.9% higher to close at 6,514.00. BHP jumped 2.3% after reporting preliminary production results for the third quarter. The report indicated that tht edemand from China is healthly and iron ore production increased 7%. Autonomy fell after reporting 49% rise in sales. Prudential Plc reported 15% rise in insurance premium on strength in the U.S. and Asia. UK sales fell.

[R]8:00PM London, 3:00PM New York – UK stocks closed higher led by a surge in mining and banking stocks.[/R]

UK stock market edged higher led by a rise in mining, banking, and home builder sectors.

FTSE 100 index rose 0.9% or 54.70 to close at 6,514. Of the FTSE 100 index stocks, 86 increased, 12 declined, and 4 closed unchanged.

Of the FTSE 100 stocks, Tesco led the decliners with a fall of 2.2% followed by losses in SAB Miller of 1.2%, Vodafone of 1.1%, and 0.6% in DSG International. Antofagasta led the gainers with a rise of 5% followed by increases in Vedanta Resources of 4.7%, persimmon of 4.2%, and Friends and Provident of 4.15%. Schroders and Alliance & Leicester increased more than 3%.

BHP, mining company, reported preliminary third quarter production report and said that production for iron ore rose 7%, copper 23% but nickel production fell 13%. The company also reported healthy production of oil and natural gas and coal. The news lifted the stock 2.5% to 1,805p and helped other miners to rise. Antofagasta added 5% and Kazakhmys jumped 3%.

BP ((BP)) reported third quarter profit declined 29% to $4.41 billion from $$6.23 billion or earnings per share fell to 23.1 cents from 31.4 cents. Revenue in the quarter increased 2.7% to $72.6 billion. Separately the company agreed to pay $303 million to settle U.S. government charges that it manipulated propane prices in 2004.

Software developer Autonomy Corp fell 4% to 915p after reporting earnings that disappointed investors. The sales in the third quarter rose 49% to $89.6 million and earnings increased 45% to $12.2 million.

Home builder Persimmon, jumped 4% to 988p after it said that it purchased 250,000 shares of the company at 2.4 million pounds.

Prudential Plc reported that at the end of nine months of operations group insurance increased 15% to 1.979 billion pounds driven by 48% rise in sales in Asia, and 20% increase in the U.S. In the third quarter annual premium equivalent sales increased 10% to on 40% increase in Asia. Sales in UK fell 20%. Prudential stock jumped 2%.

Soccer apparel maker Umbro Plc jumped 15% to close at 190p after it agreed to be bought by Nike for 285 million pounds. Under the terms of the Offer, Umbro Shareholders will receive 193.06p in cash for each Umbro Share. The Offer represents a premium of approximately 61% to the closing price of 120 pence per Umbro Share on 17 October 2007 (the last business day prior to the announcement by Umbro that it had received an approach).

In other European markets Norway led the region with a rise of 2% followed by increase of 0.7% in Spain, Switzerland, and France. Siemens added 1.9% and Alfa Laval increased 15% after reporting 33% rise in sales.

The European Court of Justice ruled in favor of Porsche in its litigation against Volkswagen. The court said that Volkswagen anti-takeover defense against foreign suitor is illegal clearing the way for Porsche to increase its 31% stake in the automaker.

[R]1:00AM New York – Rising earnings lift U.S. averages.[/R]

U.S. stocks held on to their early gains after three hours of trading. Dow Jones added Nasdaq increased, and S&P 500 edged higher

Earnings news dominated the trading sentiment in the morning.

Apple jumped 7% or $11 to $185.31 after reporting 67% increase in earnings and 29% rise in sales.

Burlington Northern ((BNI)) added $3.50 to $86.50 after reporting earnings per share of $1.48 compared to $1.33 from a year ago. Freight revenue increased 4% or $133 million to $3.95 billion and operating income increased 9% to $1 billion. Agricultural products shipment rose 10% to all time high of $682 million on 8% increase in volume for wheat, ethanol, fertilizer, and bulk food.

Western Union ((WU)) reported third quarter revenue rose 10% to $1.3 billion and earnings declined 16% to $216.3 million from $258.1 million a year ago. Earnings per share declined to 29 cents from 34 cents a year ago. Western union stock jumped $1.27 to $20.57 after the news.

Coach ((COH)) reported first quarter net sales increased 28% to $677 million and net income increased to $154.8 million from $125.6 million from a year ago. Earnings per share increased 32% to 41 cents from 31 cents a year ago. Coach stock fell 11% to $36.72.

T Rowe Price Group, Inc ((TROW)) reported third quarter net revenue of $571 million up from $452 million, earnings per share increased to $175 million from $128 million and earnings per share increased to 63 cents from 46 cents a year ago. Revenue in the quarter jumped 27% and earnings increased 37% in the period.

Investment advisory revenues earned from the T. Rowe Price mutual funds distributed in the United States increased to $348 million for the third quarter of 2007, up $77.5 million from the comparable 2006 quarter. Mutual fund assets increased $9.0 billion during the third quarter of 2007, and ended the quarter at $246.3 billion.

Market appreciation and income added $5.3 billion to the mutual funds during the quarter, while investors added net inflows of $3.7 billion. Net cash inflows were spread among the funds, with the international and global stock funds adding $1.4 billion, the U.S. stock and blended asset funds adding $1.2 billion, and the bond and money market funds adding $1.1 billion.

The New Asia, New Income, Growth Stock, Blue Chip Growth and Equity Index 500 funds each added more than $.5 billion during the quarter.

T Rowe stock jumped 4% to $57.34 in mid-day trading.

[R]9:00AM New York – Market averages are pointing higher opening on earnings and a sharp rally in Asia and Europe.[/R]

Market averages futures in New York are pointing higher opening. Dow Jones Industrial Average is trading up 40 to 13,650, Nasdaq 100 futures are up 17 to 2188.75, and S&P 500 futures are ahead by 3 to 1,517.

In the overnight trading, Asian markets surged lifted by a surge in India, Indonesia, Hong Kong, and Korea. India surged 5% after the government softened the ban on derivative trading. Indonesia and Hong Kong added 4%.

European markets at mid-day are trading 1% higher across the region. Norway index with a rise of 1.8% is leading the region followed by increases of 1% or more in France, UK, and Switzerland.

Apple reported 67% rise in earnings on 29% increase in sales. Apple surged nearly $10 or 7% in the pre-market trading to $187.

Du Pont ((DD)) third quarter net income increased 8.5%. Net income rose to $526 million from $485 million or earnings per share increased to 56 cents from 52 cents a year ago. Revenue in the quarter rose 6% to $7.04 billion.

AT&T ((T)) third quarter earnings increased 41%.

UAL, the parent of United Airlines increased 76% on 6.8% rise in $5.53 billion. The quarterly earnings increased to $334 million from $190 million or earnings per share increased to $2.21 from $1.30.

BP ((BP)) reported third quarter profit declined 29% to $4.41 billion from $$6.23 billion or earnings per share fell to 23.1 cents from 31.4 cents. Revenue in the quarter increased 2.7% to $72.6 billion.

American Express ((AXP)) reported its third quarter earnings after the close yesterday. Revenue rose 11% and earnings jumped 18% to 90 cents from 76 cents.


[R]6:00AM New York, 7:00PM Tokyo – Tokyo stocks inched higher as banking stocks recovered.[/R]

In Tokyo trading Nikkei 225 recovered from a slump in the morning session to close up 0.07% or 21.11 to 16,450.58, while the broad Topix Index gained 0.5% to 1,570.55.

In the first section of Tokyo Stock Exchange 6.9 billion shares worth 935 billion yen were traded compared to 8.9 billion shares worth 1.1 trillion yen traded in the morning session yesterday, and in the second section 223 million worth 5.1 million yen were traded.

Of the Nikkei 225 stocks 133 rose, 77 fell and 15 were unchanged. Nippon Soda Company led advancing stocks, rising 5.09% followed by Credit Saison climbing 4.41%. Financial and technology stocks gained as well.

Of the index shares, Nippon Soda Co paced gainers with a rise of 5.09%, followed by gains in Credit Saison of 4.41%, in Fuji Heavy Industry of 3.53%, in Shinsei Bank Limited of 3.50% and in Nippon Paper Group of 3.45.

Yahoo Japan Corporation led the declining index shares, shedding 4.69%, followed by losses of 4.21% in Kyowa Hakko Kogyo Company, 3.12% in Nippon Mining House, 2.90% in Mitsui Electric Company and 2.50% in Softbank Corporation.

Cabinet Office said yesterday in its monthly economic report that October private consumption is almost flat compared to the previous assessment that it may have been rising. adding that corporate profits were improving and business investment was increasing though week movements have began to be seen recently.

According to the report, the employment situation is improving even though some “severe aspects remain”. It also observed that domestic private demand and high corporate profits that were feeding into the household sector would support economic recovery in the short-term.

However, the October report said attention should be given to the effects of the U.S. housing slump and increasing oil prices to the Japanese economy.

Japan Research Institute estimated that the decline in housing investment will drive GDP down by an annualized 0.8% in the third quarter.

The yen continued to soar against the dollar, rising to 114.37 from 114.39 and also firmed to 162.49 from 162.51 against the euro.

Fuji Heavy Industries gained after it revised its fiscal year 2008 earnings forecast by 63% spurred by increased demand from Russia and China. Preliminary net income forecast for the six months ended September 30 was 7.8 billion-yen. The company also revised upwards net income forecast to 17 billion yen and sales were revised 0.6% up to 1.56 trillion yen for year ending March 31.

Financial stocks gained after the alliance between China based Citic Securities and the U.S. based Bear Stearns breathed optimism in the financial markets. Mitsubishi UFJ Financial Group gained 1.85%, Mizuho Financial Group edged up 0.65% and Sumitomo Mitsui Financial Group 2.28%.

Technology stocks rose on bullish sentiment stocked by Nikkei reports Hitachi Limited would withdraw from the personal computer business thereby increasing the profitability of other computer makers. Sony Corp and Toshiba jumped 0.19% and 1.77% respectively on the news.

Seiyu Limited, discount supermarket operator, jumped to the daily limit of 30 yen to 117 yen after Wal-Mart said that it will offer 140 yen per share for the rest of the 50% of the company that it does not own. The struggling supermarket chain has failed to generate profit and sustain market share.

All Nippon Airways would be offering 10% to 15% cheaper flights via Tokyo, Osaka and Nagoya, in the fiscal year 2009 starting April 1st of 2008. Furthermore it will cut seven direct routes linking cities to increase the percentage seats filled during flights.


[R]5:00AM New York, 6:00PM Tokyo - The Australia index rise on banking and mining stocks by 1.3%.[/R]

In Sydney trading ASX 200 Index gained 1.3% or 83.6 to 6,660.90. BHP added 0.2% and RTP increased 0.9%. Preliminary stock turnover was 1.67 billion shares worth $6.59 billion, with 811 stocks up, 447 down, and 339 unchanged. Pacrim Energy led the most active stocks list with 34.37 million shares changing hands worth $1.12 million.

BHP Billiton Ltd ((BHP)) today released its third quarter production report indicating 7% increase in iron ore output for the three months period to September 30th to a record 25.9 million tons against 24.2 million tons for the corresponding period last year.

According to the company the quarterly production record achieved for iron ore was underpinned by strong demand and a rapid growth in the company's Western Australia Iron Ore Project 2 which achieved nameplate capacity during the current quarter.

The company said that other projects that performed above expectation in iron ore production included Worsley, Western Australia Iron Ore, Illawarra Coal, Hunter Valley Coal (all Australia), Hillside (South Africa), Samarco (Brazil), and Cerrejon Coal (Colombia) operations.

The company also achieved record for natural gas and natural gas liquids at Bass Strait (Australia) and silver at Escondida (Chile) and Antamina (Peru) while Petroleum production at 30.34 million barrels of oil was in line with prior periods reflecting strong facility and reservoir performance offsetting natural field decline.

The company's largest profit contributor included base metals, such as copper, which accounted for a third of pretax earnings.

Copper production rose 23% to 307,800 tons. Unplanned smelter maintenance and lower mining grades at its Olympic Dam copper, gold, and uranium mine slowed copper production growth in the quarter.

Nickel production dropped 13% to 38,600 tons because of planned maintenance at the Kalgoorlie nickel smelter and the Yabulu refinery, both in Australia, the company said.

Woolworths Ltd reported 8.9% jump in first quarter sales during the three months ended Sept 30th for the fiscal year 2008. The company grossed A$11.696 billion, compared to A$10.7443 billion in the first quarter of the 2007 financial year. Woolworths stocks jumped 2.5% on the news and lifted Cole Meyers by 1.2%.

The general merchandise division sales increased 16.5% during the quarter to $1.301 billion from A$1.117 billion while supermarket sales rose 8% to $10.058 billion from A$9.316 billion from a year ago.

Woolworths chief executive Michael Luscombe said he was pleased with the momentum of the business, though discretionary spending continued to be influenced by fluctuating petrol prices and higher interest rates.

""We have maintained the strong momentum in all our businesses. Particularly pleasing are the excellent results from BIG W and New Zealand Supermarkets,"" he said.

New Zealand Supermarkets achieved sales of $1.07 billion for the quarter, an increase of 14.7 per cent, with comparable sales rising 9.9%.

BIG W sales grew by 16.6% in the first quarter, with comparable store sales increasing 9.6% as a result of its repositioning and higher level of discounting and store improvements.

A rally in global stocks gave investors the confidence to buy higher-yielding assets and propelled the Australian dollars to its biggest rise in a month. The Australian dollar rose 1.2% to $0.8890, from 0.8786.

Of the ASX 200 index shares, Fortescue led the gainers with a rise of 6.1% followed by increases in Minara Resources by 6%, in Futuris Corporation Limited by 5.8%, in Mount Gibson Iron by 5.3%, and in Pacific Brands by 5.1%.

Of the ASX 200 index stocks Sino Gold Mining led the decliners with a fall of 2.7% followed by losses in Lynas Corporation Limited of 2.8%, Iress Market Tec of 3.2%, Iluka Resources on 3.2% and Aristocrat Leisure of 7.2%.

Banks traded higher on the deal between China based Citic Securities and the U.S. based Bear Stearns. Macquarie Bank gained 2.6%, Westpac Banking increased 1.8%, National Australia Bank added 1.7%, Commonwealth Bank of Australia increased 0.8%, and Australia and New Zealand bank edged up 1.5%.

In the energy sector, Woodside Petroleum was unchanged, Santos added 1.4%, and Oil Search rose by 3.6% after it reiterated its production guidance for the full year.

Gold stocks rallied, with Newcrest adding 1.1% after reporting an 18% rise in first quarter production and Lihir Gold gained by 1.7%. Oxiana jumped 4.4% after the company said that it plans to expand its copper and gold mining operations at Prominent Hill location.

Pacific Brands added 5.1% after indicating it was well placed to deliver at least 10% profit growth this financial year.

In the media sector, News Corp was up 1.9% after its non-voting stock lifted 59 cents to $24.54 while Publishing and Broadcasting strengthened 0.3% and Fairfax firmed 0.4%.

Qantas added 3.9% after reports that its subsidiary, Jetstar, a low-cost airline, will introduce flights to Europe from Australia via a Southeast Asian airport in early 2009.

Among other stocks, Symbion Health edged higher 0.3% as it said it would pursue its revised merger proposal with Healthscope Ltd. Primary Health Care, one of the largest shareholder said that it will vote against the deal.

Futuris Corporation surged 5.8% after indicating that it would sell its 43% stake in beef producer Australian Agricultural Company.