U.S. Stocks Open Higher, Merrill in Focus

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

Stocks after thirty minutes of trading retained a positive bias in New York. European markets at mid-day are trading nearly 0.7% higher acorss the region. In Asian trading India, Hong Kong, Korea, and Thailand surged. Oil traded above $93 per barrel and dollar fell to a record low against euro. Merrill Lynch fell a fraction after news report suggested that its chief executive may be forced out as early as today.

[R]10:00 AM New York – U.S. Market averages open higher. Oil crossed above $93 per barrel and dollar at record low against euro.[/R]

U.S. averages opened higher as oil rose above $93 per barrel and dollar fell to a record low against euro. Nasdaq traded up 14.86 to 2,817.79 after 10 minutes of trading and S&P 500 added 4.83 to 1,540.29.

Merrill Lynch stock was trading 44 cents down to $65.65 after the news report in the Wall Street Journal suggested that Chairman and Chief Executive Stanley O’Neal may be forced out as early as today. Merrill last week reported a quarterly loss of $3.5 on $8.4 billion loss in subprime securities.

CH Energy ((CHG)) reported earnings per share of 27 cents compared to profit of 70 cents per share a year ago. The Central Hudson Gas & Electric Company reaffirmed its annual earnings guidance between $2.55 and $2.80.

Gehl Company ((GEHL)) reported third quarter earnings from continuing operations of 40 cents per share compared to 57 cents in the previous year on a decline of 17% in net sales. The company lowered its annual sales outlook between $445 million and $460 million earnings per share from continuing operations between $1.90 and $2.00. Gehl stock fell 12% at the opening.

Hertz ((HTZ)) reported third quarter sales increase to $2.45 billion, 9.3% increase compared to a year ago. Pre-tax earnings in the quarter fell to $162.7 million from $163.9 million. Earnings per share in the third quarter 2007 were 50 cents on 327.7 million shares compared to 46 cents per share on 231.9 million shares outstanding in the third quarter of 2006.

Oil futures are trading higher than $93 after two oil production platforms were forced to shut down, rising tensions in the Middle East and saber rattling between the U.S. and Iran, expectations of higher oil demand in the upcoming winter season, and record weakness in dollar.

European markets at mid-day are trading higher ahead of the market opening in New York. Norway is leading the region with a rise of 1.2% on higher oil prices followed by 0.7% rise in Spain, France, Germany, and UK. Switzerland and Italy added 0.4%.

In trading in the rest of Asian markets Hong Kong and India led the region with a sharp rise of 3.9% and 3.8% respectively followed by increases of 2.3% in Thailand, 1.9% in Taiwan, 1.7% in Indonesia and Korea, and 1.3% in Singapore and Australia.


[R]6:00AM New York, 7:00PM Tokyo – Tokyo stock market rose on financial and auto stocks. Asian markets surged led by banks. September retail sales increased 0.5% in Japan.[/R]

In Tokyo trading Nikkei 225 rose 1.17% or 192.45 to 16,698.08.

Of the Nikkei 225 stocks, 178 rose, 38 declined, and 9 were unchanged. Nissan Motor Corp led the advancers, spiking 14.15% the most since September 2000 on better-than-expected results.

In the first section of the Tokyo Stock Exchange 79 billion shares worth 1.1 trillion yen changed hands and in the second section 143 million shares valued at 4.3 billion yen were traded.

Oil prices climbed to a record $93 per barrel after Petroleos Mexicanos shut down a fifth of its production and the dollar slumped to a record 1.4426 against the euro. Mitsubishi Corp edged up 3.02%.

The yen firmed to 114.19 from 114.21 against the dollar and gained 164.72 from 164.75 against euro.

Of the index shares, Nissan Motor Corporation led advancers with a rise of 14.15%, followed by gains in Resona Holdings of 10.34%, in Sumitomo Mitsui Financial Group of 9.54%, in Nippon Yusen of 8.41% and in Sumco Corporation of 7.12%.

Financial stocks also gained after U.S. mortgage lender Countrywide Financial Corporation announced it would recover from the credit market turmoil and forecasted return on equity of between 10% and 15% in 2008. Resona Holdings climbed 10.34%, Sumitomo Mitsui Financial Group rose 9.54% and Mitsubishi UFJ Financial Group soared 4.70%

The Ministry of Economy, Trade and Industry revealed today in its preliminary report on the current survey of September commerce retail sales increased 0.5% to 10.7 trillion yen. Commercial sales also rose 1.3% to 51.9 trillion, while wholesale sales edged up 1.5% to 41.2 trillion yen. However, large-scale retail sales slipped 0.3% to 1.5 trillion yen.

According to the report, third quarter commercial sales firmed 2.7% to 151 trillion yen. Wholesale firmed 3.7% to 118 trillion yen and retail sales slumped 0.5% to 32.9 trillion yen.

Nissan Motor Corp and Indian truck manufacturer Ashok Leyland jointly announced today the companies had signed three joint venture companies agreement to manufacture light commercial vehicles.

The Vehicle Manufacturing Company will be located in India and be 51% owned by Ashok Leyland and production volume is expected to be 100,000 units starting 2010. Power Manufacturing Company, owned 51% by Nisaan, will be responsible for assembly and export of engines and other drive-train components for trucks. Technology Development Company would be responsible for the development of LCV products and related power-trains.

Separately Nissan surged 12% after reporting better than expected earnings on Friday. Sales in emerging markets, China and Russia helped the performance. The company reported 13% increase in operating profit and 12% in sales in the second quarter of the fiscal 2008. The company also announced stock buyback of 27 billion before the calendar year end 2008.

Softbank announced yesterday that it would spend 40 billion yen on a data centre in Southwestern Japan in Kitakyushi, Fukuoka Prefecture in October 2008. Two additional facilities, each with a floor space of 3,300 square metres will also be built by 2009.The data centre will house more than 100,000 computer servers and have an area of 140,220 square meters.

Financial stocks also gained on improved investor sentiment after U.S. brokerage Countrywide Financial Corp announced that it would recover from the credit market turmoil and expectations that the U.S. Federal Reserve might cut its key interest rate this week Mitsubishi UFJ Corp rose 4.70% and Mizuho Financial Group jumped 5.62%.

Nippon Yusen soared 8.4% to 1,251 yen after announcing today it expects net income for the full year ending March 31 to be 111 billion yen compared to 100 billion yen forecasted earlier, on rising demand of ore and bulk commodities transportation, especially to China. Operating profits in the second quarter rose 54% to 26.3 billion from 17.1 billion yen. Sales in the quarter also soared to 655.3 billion from 528.8 billion a year earlier.

Other shipbuilders gained as well. Kawasaki Heavy Industries and Mitsui Engineering & Shipbuilding firmed 1.95% and 3.95 correspondingly.

Advantest Corp led decliners in the Nikkei 225 index with a plunge of 6.65%, followed by losses of 4.17% in Matsushita Electric Work, 3.32% in Clarion Company Limited, 3.29% in Fast Retailing, and 2.39% in Trend Micro Inc.

Advantest Corp slipped after reporting first half net income fell 16.9 billion yen compared to 22.2 billion yen a year earlier. Sales were at 114.9 billion yen from 120 billion yen in 2006. Fiscal year net income was revised downwards from 35.6 billion yen to 33 billion yen and sales projections were cut from 235 billion yen to 230 billion yen.

Toshiba Corporation announced today first half operating income rose 17.3 billion yen from a year ago to 82.5 billion yen, while sales stood at 3.6 trillion yen First half net income rose 6.9 billion from a year earlier to 45.7 billion yen. However, the company projected annual profit will climb by 50% on increased demand for semiconductors in music players and digital cameras. Net income is forecasted to rise 31% to 180 billion yen, while annual sales might firm 9.6% to 7.8 million yen. Operating profit for the year will probably rise to 290 billion yen.

Toshiba added that full year profit at the chip business may rise to 150 billion, notwithstanding the anticipated 20% decline in NAND flash chip prices in the second half due to increased production and cost cutting measures being implemented.