Crude Oil Inventories Rise

Elena
13 Oct, 2005
New York City

Asian markets finished broadly in the red, led by South Korea's Kospi, down 1.9% on tech stocks. The Nikkei lost 0.1%. European stocks traded lower at mid-day on interest rate and inflation concerns.McDonald's Corp. released Q3 earnings outlook of 58 cents a share, exceeding expectations of 54 cents. The Web online engine Google and the cable company Comcast are to buy a stake in Warner Time's America Online for $5 billion. September import prices index jumped 2.3%, the highest in 15 years.

U.S. MARKET AVERAGES

U.S. stock futures point to a flat market opening after the three major averages posted heavy losses yesterday and closed the session at five-month lows. The market sentiment was raised by a strong third-quarter earnings outlook from McDonald’s Corp. and acquisition news from Google and Comcast Corp., which are in discussions to buy shares in Time Warner Inc’s America Online for $5 billion. However, the positive sentiment was offset by traders’ concerns about oil inventory report, due out later in the day. Data on the U.S. trade balance and weekly jobless claims are both due today.

S&P 500 futures were up 1.9 points, just below their fair value. Dow Jones industrial average futures were up 12 points, while Nasdaq 100 futures were up 4 points.

INTERNATIONAL MARKET NEWS

Asian-Pacific benchmarks lost ground, reflecting U.S. markets losses Wednesday when all major averages hit five-month lows. The Nikkei lost 0.1% on trade surplus data. Across the region , South Korea’s Kospi dropped 1.9% on tech stocks, hurt by concerns over the sector’s earnings outlook. Samsung Electronics was the most notable decliner. Shares in Hong Kong added 0.3%, while stocks in Australia shed 0.8%.

European markets traded lower at mid-day on interest rate and inflation concerns overseas. However, regional markets were supported by corporate news and automakers Volkswagen and Peugeot Citroen. The German DAX 30 lost 0.4%, the French CAC 40 slipped 0.8%, and London’s FTSE 100 shed 0.9%.

ENERGY, METALS, CURRENCIES

Oil prices slightly retreated ahead of U.S. oil inventory report, ignoring the Department of Energy forecasts of increased global demand in the following year. Light sweet crude for November delivery slipped 12 cents to $64 a barrel in electronic trading on the Nymex. Heating oil fell 2 cents to trade at $1.99 a gallon. Gasoline declined to $1.8222. Natural gas lost 2 cents to $13.505 per 1,000 cubic feet. London Brent was flat at $60.58.

In European trading gold prices further declined. In London gold December contract traded at the recommended price of $471.25 per troy ounce, down from $475.60. In Hong Kong gold fell $6.80 to close at $471.45. Silver opened at $7.73, down from $7.83.

In European trading the U.S. dollar advanced against its major counterparts. The euro was quoted at $1.1977, down from $1.2015. The dollar changed hands at 114.74 yen, up from 114.43. The British pound was trading at $1.7475, down from $1.7494.

EARNINGS NEWS

Monsanto Company ((MON)), maker of genetically engineered seeds, reported Q4 loss of 47 cents a share, down from 16 cents a share in the year-ago period despite 3% revenue growth. Apart from one-time items, the company stated its loss from continuing business was 50 cents a share, beating analyst estimate of a loss of 51 cents.

Fairchild Semiconductor ((FCS)), global supplier of power semiconductors, reported a Q3 net loss of 17cents per share, down from a net income of 11 cents per share in the same period last year. Q3 loss included $4.2 million of restructuring expenses referring to employee payouts and certain asset impairments. Gross margin amounted to 20.8%, 90 basis points higher sequentially and 950 basis points lower than the comparable period last year.

Winnebago Industries ((WGO)), motor home manufacturer, reported Q4 earnings of 46 cents a share, down from a profit of 55 cents a share in the year-ago period on revenue decline, topping analysts’ expectation of 42 cents a share The company added that its performance was poor on a year-over-year basis due to lower sales volume and a shift in product mix to lower priced models.

LG Phillips LCD Co. ((LPL)), maker of liquid-crystal displays for computers, reported Q3 net profit dropped 22%. Net profit reached 227 billion won ($217.78 million) based on South Korean accounting standards. Third-quarter sales advanced 46% to 2.74 trillion won from 1.88 trillion won.

AMCORE Financial, Inc ((AMFI)), financial services provider, reported Q3 earnings of 50 cents a share, 2% up vs. 49 cents a share in the year-ago period. Average bank issued deposits grew 16 % and average loan balances respectively 11 % compared with the same period last year. Net interest income rose 7%.

Landstar System Inc. ((LSTR)), provider of transportation services to shippers, reported Q3 net income of 61 cents a share, up from 36 cents a share in the year-ago period on 28% sales growth, beating analysts’ forecasts of 46 cents a share. The company anticipates Q4 revenue to increase 10% to 14%, with profit reaching 46 cents to 51 cents a share.