U.S. Stocks Open Higher

123jump.com Staff
13 Nov, 2007
New York City

U.S. stocks open higher with Dow Jones, S&P 500, and Nasdaq edging nearly 0.6% ahead. Wal-Mart reported 8.9% rise in sales and third quarter earnings rise of 7.9%. Domestic sales played a crucial role in earnings growth. Same-store domestic sales in the quarter, excluding fuel, rose 1.5%. Vodafone returned to profit on higher revenue at recently acquired mobile companies in India and Turkey. Oil declined. The Bank of Japan left rates unchanged to 0.5%.

[R]9:40AM New York – U.S. stocks opened higher on better than expected earnings from Wal-Mart.[/R]

U.S. stocks trade higher at the opening. At the opening Dow Jones Industrial Average increased 80 to 13,071, Nasdaq added 32 to 2,616, and S&P 500 edged higher 12 to 1,452.

Wal-Mart jumped $2.60 to $45.95 after it reported its earnings. Earnings at the third quarter increased to $2.86 billion compared to $2.65 billion or earnings per share increased to 70 cents compared to 63 cents per share year ago. Revenue in the quarter increased 8.9% to $91.95 billion. Wal-Mart predicted fourth quarter earnings from continuing operations between 99 cents and $1.03 per share and fiscal 2008 earnings from continuing operations between $3.13 and $3.17 a share revised from earlier projection of between $3.05 and $3.15 a share.

European markets fell on weak oil and metal prices. Telecom stocks led the gainers in the region on earnings form Vodafone.

Norway, for the second day, led the decliners in the region, at mid-day trading, with a loss of 1.3% followed by losses in Germany and the Netherlands of 0.5%, in Spain and France of 0.2%, and in U.K. of 0.05%. Switzerland added 0.3% followed by increases in Italy of 0.07%.

Vodafone reported earnings for the six months ending on Sept 30 at 3.29 million pounds or 6.19 pounds per share compared to a loss of 5.11 billion on the charges of 8.1 billion pounds related to its Italian and German operations. Revenue in the first half increased 9% to 17 billion pounds from 15.59 billion pounds a year ago on the rising revenues at the recent acquisitions in Turkey and India.

Vodafone jumped 3.5% in London trading.

Asian markets tracked local news. India led the advancers in the region with a rise of 1.6% followed by increases in Australia of 0.7%, in Taiwan of 0.65%, in Hong Kong and in Korea of 0.5%.

Singapore led the decliners with a fall of 1% followed by losses in Indonesia of 0.7%, in Japan, Thailand, and in Philippines of 0.5%.

Third quarter economic growth in Japan was recorded at 0.6% on strong exports growth and rising consumer spending. In a near unanimous decision the Bank of Japan left the rate unchanged at 0.5%. Isuzu Motor dropped 6% on 16% decline in earnings.

[R]6:00AM New York, 7:00PM Tokyo - Tokyo stocks declined for the eighth session in a row. Rising consumer spending lifted third quarter GDP.[/R]

In Tokyo trading Nikkei 225 slumped 0.46% to 70.46 to 15,126.63, while the broad Topix Index shed 1.67 to 1,454.73.

In the first section of the Tokyo Stock Exchange 9.9 billion shares worth 1.2 trillion yen were traded compared to 260 million shares valued at 5.0 billion yen traded in the second section.

Of the Nikkei 225 stocks 84 gained, 134 declined and 7 were unchanged. Casio Computer Company led gainers, rising 13.86% after brokerage Merrill Lynch raised the rating on the stock to “buy” from “neutral”. Mitsubishi UFJ Nicos on Aiful return to profitability.

Japan’s Cabinet Office released its preliminary third quarter GDP estimates that real GDP soared by 0.6% from the previous year to an annualized 2.6% in the three months to September. GDP for the second quarter was revised to 1.6% compared to the preliminary figure of 1.2%. Net exports contributed 0.2% and local demand increased 0.4% from 0% and –4% registered in the first and second quarter respectively.

According to the statistics, private demand rose 0.3% from 0.2% in the April to June period, while the consumption of households also rose to 0.3% from 0.2%. Private residential investment tumbled 7.8% from a 4.1% decline in the second quarter. However, private non-residential investment rose 1.7% from a fall of 2.1% in the previous quarter.

Changes in private inventory contributed 0.1% from a 0.1% slump to GDP recorded in the second quarter. The Cabinet Office also noted that government consumption leapt 0.3% in the quarter under review, while public investment plunged 2.6%, extending a 2.7% drop in the previous quarter.

Exports rose 2.9% from 0.9% in the three months to April and imports similarly climbed 0.5% from 0.8%. The GDP deflator, which is a measure of prices, declined 0.3% and the domestic demand deflator and private consumption deflator fell 0.2% and 0.5 % in that order.

The Bank of Japan today kept its key interest rate on hold at 0.5% by an 8-1 vote after a two-day monetary policy. Again, Atsushi Mizuno was the only dissenter.

Of the Nikkei 225 index shares, Casio Computer Company paced gainers, with a rise of 13.86%, followed by increases in Mitsubishi UFJ Nicos of 12.44%, in Clarion Company Limited 7.93%, in Toto Limited of 7.93% and IHI Corp of 4.44%.

Casio Computer Company, which has a joint venture with Hitachi Limited Casio Hitachi Mobile Communications, gained the most since May 2004 after Merrill Lynch lifted the rating on the stock from “neutral” to “buy”, citing an increase in market share in the handset business that could help profits.

Mitsubishi UFJ Nicos rose after consumer lender Aiful Corp second quarter profit jumped to 14.2 billion yen from a loss of 194 billion yen a year ago. Revenue for the company however slumped 16% to 107 billion yen.

Isuzu Motors led decliners in the index with a fall of 5.86%, followed by losses of 5.56% in Sojitz Corporation, 5.29% in Nippon Mining house, 4.55% in Mitsumi Electric Company and 4.47% in Showa Shell.

Isuzu reported yesterday that first half profit fell 33% as domestic demand slumped. Net income dropped 37 billion-yen in the six months to September.

Commodity and energy related stocks fell on declining prices of metals and oil. Crude oil for December delivery fell 0.3% to $94.36 per barrel. Mitsubishi Corp plunged 3.73 and Nippon Oil declined 2.07%.

Sankyo rose after the first half net income fell to 16.3 billion yen, lower than the 16 billion yen analysts had predicted.

[R]4:00AM New York, 8:00PM Sydney – The Australia index rose 0.9% as major stocks led by banks traded stronger.[/R]

ASX 200 index gained 0.9% or 59.9 to close at 6,515.20. Banks led the gainer with Westpac adding 1.3% and National Australia Bank increasing 1.6%.

Preliminary stock turnover was 850 million shares worth A$3.41 billion, with 511 stocks up, 560 down and 356 unchanged.

The most traded stock on the market was Republic Gold Ltd, with 44.5 million stocks changing hands at a value of A$8.74 million.

The precious metal explorer''s shares were 13.89% stronger to 20.5 cents.

Macquarie Group Limited today announced a record A$1.06 billion profit after tax attributable to ordinary shareholders for the half year ended 30 September 2007. This increase represents a 45% increase over the A$730 million profit for the half year ending on September 30, 2006.

The company said the 45% profit growth was driven by a 38% increase in total revenue, of which 55% was derived from international operations. Earnings per share for the six-month period increased 34% to A$4.02 from A$3.01 on the prior corresponding period.

But the bank said it is cautious about its outlook, forecasting its second half result to be in line with last year and further cautioned that it may be too early to forecast the results.

Macquarie Group Managing Director and Chief Executive Officer Allan Moss says equity market conditions may not continue to be as favorable, and noted that the first half had benefited from a large number of asset sales.

Moss said Macquarie Group Limited will pay interim dividend of A$1.45 per share, 16% increase form a year ago. Mcquarie targets to pay dividend between 50% and 60% of its profit.

Moss, said: ""This record half year result underscores the strength and diversity of our global business. He further added, ""The story of our strong growth beyond Australia continues and we are particularly pleased with the outstanding contribution from the Asia-Pacific region, which was largely unaffected by the credit market disruption.""

Moss noted that Macquarie continued to hire quality staff, while maintaining a low expense-to-income ratio.

""All operating groups have experienced continued international growth. For Macquarie Capital (formerly Investment Banking), Equity Markets, Treasury and Commodities, Real Estate and Funds Management Groups income from international activities was more than half of each group''s total operating income,"" Mr Moss said.

Gaming and media group Publishing and Broadcasting Ltd (PBL) indicated today that Canadian gaming regulators have approved the bid by its 50/50 joint venture for Gateway Casinos in Canada.

The company said regulators in the provinces of British Columbia and Alberta have approved the bid by the PBL and Macquarie Group joint venture, New World Gaming Partners, for Gateway Casinos Income Fund.

The joint venture partners will pay $1.3 billion for the fund, which holds a network of nine casinos in Vancouver, Edmonton and Alberta.

The decision by Reserve Bank of Australia to revise its inflation forecast has heightened speculation among economists of further hikes in interest rates.

Economists predict that the Governor Glenn Stevens and his board will increase the overnight cash rate target by a quarter of a percentage point to 7% by March.

In reviewing its inflation forecast, the bank noted that global financial-market sentiment ``remains fragile'''' because of the U.S. sub-prime rout, indicating it may keep borrowing costs unchanged next month.

The bank indicated yesterday that core inflation would accelerate to 3.25% by December and remain there until June, more than a previous estimate of 3%. This would mean that annual price increases would exceed the 3% upper limit of the bank''s target range.

News Corporation will use its newly acquired Wall Street Journal brand to reach deep into the world''s developing economies with financial news.

Chairman Rupert Murdoch announced this at the company''s annual general meeting in Adelaide. Mr Murdoch revealed plans to replace about one million paying subscribers of the paper''s online edition, with 10-15 million who wouldn''t pay a thing.

Of importance in his plan was a long term plan to penetrate developing markets like China and India, where demand for financial news and services would explode in the decades ahead.

Mr Murdoch said the company needed to ride on the fact that about 50 and 100 million people a year are joining the world economy thereby creating an explosion of wealth and business opportunities and such people need up-to-the-minute information.

Murdoch believes that financial news supported on advertising revenue is likely to generate higher revenue than subscription revenue based business model. One million paying U.S. subscribers may not bring substantial revenue, but ten million visitors from China and India with no subscription revenue may not bring comparable revenue.

Murdoch paid approximately $5 billion to acquire Dow Jones and the deal has still not been approved by the regulators. The advertising driven revenue model may not generate enough revenue to justify the high price target.

The Australian dollar finished weaker today, dipping below $0.8800 during the local session.

At the close of trade the Australian dollar was trading at $0.8877/82, down from yesterday''s close of 0.8967/72.

During the day, the Australian dollar traded between a low of $0.8754 and a high of $0.8900.

Of the ASX 200 index shares, ABC Learning led the gainers with a rise of 11.1% followed by increases in IOOF Holdings Limited by 6.5%, in Hills Industries by 6.3%, in Aristocrat Leisure by 5.7%, and in STW Communication by 5.1%.

Of the ASX 200 index stocks Macquarie Group led the decliners with a fall of 3.7% followed by losses in Paladin Resource of 3.7%, Newcrest Mining by 4%, in AWB Limited by 4.2%, and 5.6% in Sino Gold Mining Ltd.

In other stocks Commonwealth Bank was lower at 1.8%, Australia and New Zealand bank put on 3.6% and Macquarie was down 3.8%. In the Resource sector BHP Billiton was up 0.2%, and Rio Tinto shares dropped 0.5%.

In the energy sector Woodside Petroleum was up by 0.7%, Oil Search put on 1.6%, and Santos was up 1.8%. In the gold sector Lihir was weaker at 1.5%.

Zinifex lost 2.8% after indicating that declining price of zinc coupled with a stronger Australian dollar will cut its revenue this year.

Monto Minerals Ltd. (MOO AU), added 16% after opening its new industrial minerals project in central Queensland State, yesterday.

The retailers traded higher Harvey Norman by 0.9%, Woolworths added 0.5%, Wesfarmers Limited edged higher 0.8% and David Jones gained 3.1%.

Media stocks were mixed, with PBL gained 2.5%, Fairfax lost 0.4%, News Corp was down 0.04%.