Apple and Oil Pressure Stocks

Elena
12 Oct, 2005
New York City

Asian-Pacific markets closed broadly down with the Nikkei down 0.7% on consumer confidence drop and unchanged monetary policy. The markets in Hong Kong and South Korea fell 2.2%. European stocks lost ground at mid-day, led by the DAX 30, down 0.6%. Harley-Davidson reported Q3 income rise of 96 cents a share vs. 77 cents a year ago, beating expectations of 90 cents a share.

U.S. MARKET AVERAGES

U.S. stock futures point to a weak opening after markets closed mixed Tuesday. The lower trading levels are mainly attributable to the disappointing quarterly revenue from Apple Computer Inc., which raised concerns about corporate profits, and advancing oil prices. Rising oil is likely to put off some investors from buying stocks. U.S. crude for November delivery rose to $64 a barrel.

S&P 500 futures were down 1.3 points, below their fair value. Dow Jones industrial average futures were down 9 points, while the Nasdaq 100 were down 2.5 point.

Shares of Intel Corp fell before the bell after Prudential cut the company to 'underweight' from 'neutral weight' and lowered its price target to $20 from $31, Intel declined 1.4 percent to $23.09 on Inet.

Advanced Micro Devices Inc. shares fell in Europe even after the world's second-largest microprocessor maker posted net profit above Wall Street's expectations.

Federal Reserve Chairman Alan Greenspan speaks in Washington at 8:30 a.m. on the flexibility of U.S. economy, which may help investors gauge the central bank's outlook on inflation.

INTERNATIONAL MARKET NEWS

Asian-Pacific benchmarks closed mostly down after the Nikkei fell off a four-year intraday high to close down 0.7%, reflecting consumer confidence decline in September and a decision of the Bank of Japan to leave monetary policy unchanged. Across the region, South Korea’s Kospi tumbled 2.2% on tech shares sell-off after LG Philips released lowered earnings outlook. Shares in Hong Hong dropped 2.2%, while in Australia gained 0.8%.

European markets lost ground at mid-day dealings due to mixed corporate news and advancing crude oil prices, which almost reached $64 a barrel. The German DAX 30 lost 0.6%, the French CAC 40 slipped 0.4%, and London’s FTSE 100 shed 0.3%.

ENERGY, METALS, CURRENCIES

Oil prices hover near $64 a barrel on IEA’s global demand outlook and winter supply concerns.. Light sweet crude for November delivery gained 64 cents to trade at $63.99 a barrel on the Nymex. Heating oil rose nearly a cent to $2.0262 a gallon. Gasoline prices inched up to $1.8378. Natural gas advanced 7 cents to $13.592 per 1,000 cubic feet. London Brent added 46 cents to $60.54.

In European trading gold prices climbed 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 the recommended price of $477.75 per troy ounce, up from $476.05. In Hong Kong gold fell 30 cents to $478.25. Silver opened at $7.82, down from $7.85.

In European trading the U.S. dollar traded mixed against its major counterparts. The euro was quoted at $1.1990, down from $1.9993. The dollar changed hands at 114.49 yen, up from 114.42. The British pound was trading at $1.7459, up from $1.7457.

EARNINGS NEWS

Host Marriott ((HMT)), full-service hotel properties holding company, reported Q3 funds from operations advanced to 19 cents a share, up from 6 cents a share in the year-ago period, as revenue rose 7.7% and comparable hotel revenue per available room went up 8%, topping analysts’ forecasts of 17 cents a share. The company added that insurance coverage should be enough to cover all of the property damage to the New Orleans Marriott and the near-term loss of business.

Regis Corp. ((RGS)), hair-care service provider, reported Q1 sales rose 15%, with same-store sales up 0.9%. The impact from hurricanes cut down revenue for the period by $2.1 million.

Virginia Commerce Bancorp Inc. ((CBI)), commercial banking services provider, posted Q3 net income of 35 cents a share, up from 26 cents in the same period last year, beating analyst estimate of 32 cents a share.The company also stated that net interest income were $14.5 million, up almost 34% from the year-ago period.

Media General Inc ((MEG)), media company, posted Q3 earnings of 41 cents a share, down from 66 cents a share a year-earlier on lower operating income from its Publishing and Broadcast divisions. Revenue advanced 1.5% over the same period last year. The company topped analyst estimate by a penny.

Lindsay Manufacturing Co ((LNN)), irrigation systems manufacturer, reported Q4 net profit of 3 cents per share, breakeven with last year’s in the same quarter despite 14% revenue decline, missing analysts’ forecasts of 5 cents per share.

Harley-Davidson Inc. ((HDI)) motorcycle producer, posted Q3 net income of 96 cents a share up from 77 cents in the year-earlier period on revenue growth as U.S. retail motorcycle sales rose 12%, beating analysts’ forecasts of 90 cents a share.

Apollo Group Inc. ((APOL)), for-profit education company, reported that Q4 net income advanced to $106.2 million from $15.7 million in the year-ago period. Apart from stock-based compensation charges in both years, income would have been 65 cents a share, up from 52 cents, in same time last year on revenue growth, matching on that basis analyst estimate.