U.S. Stocks Rise, FedEx, Fannie Mae Fall

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

U.S. stocks gain after a day of volatile trading. Dow Jones and S&P 500 added 0.5% and Nasdaq increased 0.7%. Cisco increased its buyback of its stock by $10 billion helping the averages to recover. FedEx lowered its earnings forecast and cited rising fuel cost and slowing freight volume. Energy stocks rose after oil jumped above $95 per barrel. Agilent Technologies jumped 9% after reporting better than expected earnings.

[R]5:00PM New York, 11:00PM Frankfurt, 9:00AM Sydney[/R]

[R]Global Markets Indexes[/R]

Dow Jones Industrial Average rose 66.74 or 0.51% to a close of 13,176.79, S&P 500 added 0.52% or 7.59 to 1,458.74, and Nasdaq Composite Index gained 18.73 or 0.72% to a close of 2,637.24. In Toronto TSX Composite advanced 5.93 or 0.04% to close at 13,530.36.

Of the 30 stocks in Dow Jones Industrial Average, 20 closed higher, 10 closed lower, and none were unchanged.

Of the stocks in S&P 500, 262 closed higher, 231 fell, and 7 were unchanged.

In London FTSE 100 Index closed down 68.40 or 1.08% to 6,291.20, in Paris CAC 40 Index decreased 37.50 or 0.67% to close at 5,523.63, and in Frankfurt DAX index lost 54.77 or 0.71% to close at 7,612.26. In Zurich trading SMI declined 114.85 or 1.34% to close at 8,478.80.

In Tokyo Nikkei 225 Index fell 241.69 or 1.57% to close at 15,154.61, in Hong Kong Hang Seng index closed down 1,136.78 or 3.95% to 27,614.43, in Australia ASX 200 closed down 66.70 or 1.02% to close 6,461.90. India lost 0.44% or 86.53 to 19,698.36.

In South Korea Kospi Index decreased 21.54 or 1.11% to close at 1,926.20, Thailand closed down 6.45 or 0.75% to 849.07, and Indonesia edged lower 37.12 or 1.37% to 2,668.70.

In Latin Markets Mexico led the decliners with a rise of 1.6% and Argentina added 0.6% but other market declined. Peru led the decliners with a fall of 1.2% followed by losses in Chile and Venezuela of 0.7%. Brazil lost 0.03%.

Bond Yields edged higher on 10-year U.S. bonds to 4.17% and 30-year bonds increased to 4.53%.

[R]Commodities, Metals, and Currencies[/R]

Crude oil jumped $1.77 to close at $93.84 per barrel for a front month contract, up 44.00% for the year, natural gas increased 30 cents to $8.00 per mBtu, and gasoline futures increased 3.92 cents to close at 237.54 cents per gallon.

Gold edged lower $0.430 in New York trading to close at $787.00 per ounce, silver closed down 7 cents to $14.51 per ounce, and copper for front month delivery gained 8.00 cents to 319.90 cents per pound and in London trading closed down $205.50 to $6,897.00.

Dollar edged lower against euro to $1.4662 and lower to 110.08 yen.


[R]11:30AM New York – 9:00PM Mumbai – Sensex in India fell reflecting a weakness in Asian markets trading.[/R]

Sensex in Mumbai trading fell 86.53 or 0.44% to close at 19,698.36 and CNX Nifty dropped 5.25 or 0.09% to close at 5,906.85.

Wholesale Price Index at the end of the last week, on annual basis rose to 3.11% from 2.97% at the end of the previous week.

Daily turnover on the Bombay Stock Exchange fell to 8,854 crore rupees from 9,268 crore rupees.

Of the stocks traded on the Bombay Stock Exchange, 1,909 closed higher, 912 declined, and 44 closed unchanged.

ITC, conglomerate of cigarette, hotels, and food products, jumped 8.2% to 205 rupees.


[R]9:30AM New York – Cisco buyback helped U.S. market averages to open higher.[/R]

At the market opening in New York, Dow Jones Industrial Average increased 78 to 13,188, Nasdaq added 13 to 2,631, and S&P 500 advanced 8 to 1,459.

Starbucks fell at the opening after it reported fourth quarter earnings. Starbucks earnings increased 22% to 21 cent from 15 cents a year ago on revenue rise of 22% to $2.4 billion. Same-store sales increased 4% in the quarter but the customer traffic declined 1%, first decline in traffic since the company was listed on the stock exchange. Domestic sales increased 19% to $1.9 billion and international sales increased 31% to $472 million.

The coffee retailer estimated earnings per share in the fiscal 2008 to be in the range of $1.02 and $1.05 and expects revenue to increase between 17% and 18%.

Investment arm of Abu Dhabi government agreed to take a stake in Advanced Micro Devices for $622 million or 8.1% stake in the company.

Cisco Systems plans to purchase $10 billion in stock buyback after a lackluster performance in the stock. Cisco stock fell nearly 10% after reporting earnings two weeks ago and issued cautious earnings guidance that took tech investors by surprise.

European markets edged lower ahead of the U.S. markets opening. Norway led the decliners in the region with a fall of 1.1% followed by losses in Switzerland of 0.8%, and in France, UK, and Germany of 0.4%. Italy and Spain increased 0.5%.

Asian markets closed sharply lower across the region on the U.S. housing market comments from Wells Fargo. Hong Kong led the region with a loss of 4% followed by losses in Philippines of 2%, in Japan and Taiwan of 1.6%, and Indonesia of 1.4%, in Australia and Korea of 1.1%.

Hong Kong suffered third loss in a row. Investors worried that the recent crackdown by the Chinese government may stem the flow of investment in Hong Kong. Hong Kong Stock Exchanges & Clearing soared ahead of earnings but the market weakness dragged the stock lower by 4.9%.

Hong Kong Exchanges & Clearing reported third quarter earnings increase of 147% to HK$2.4 billion and earnings per share surged to HK$1.58 from HK$0.53 from a year ago. Average daily turnover value on the exchange rose to HK97.7 billion from HK$26.3 billion from a year ago. Average daily number of derivative contracts traded on futures exchange increased to 197,874 from 95,911, and stocks option contracts increased to 240,131 from 66,836.

Financial and real estate stocks led the decliners in Japan on the worries that a slow-down in the U.S. and Japanese housing market slow-down.

[R]6:00AM New York, 7:00PM Tokyo – Tokyo closes the week down 1.57% led by financial and realty stocks. Deputy Governor of Bank of Japan Toshiro Muto says U.S. housing slump could affect economic growth in Japan.[/R]

Japan’s stock averages closed the week down 1.5% on retreat of financial and realty stocks.

In Tokyo trading Nikkei 225 dipped 1.57% or 241.69 to 15,154.61, while the broader Topix Index shed 1.8% or 27.19 to 1,471.67.

In the first section of the Tokyo Stock Exchange 7.9 billion shares worth 965 billion yen were traded compared to 8.9 billion shares valued at 1.1 trillion yen traded yesterday, and 216 million shares valued at 3.6 billion yen changed hands in the second section.

Of the Nikkei 225 stocks 39 gained, 179 declined, and 7 were unchanged. Asahi Breweries led gainers, rising 6.02% as investors opted for defensive stocks.

Bank of Japan Deputy Governor Toshiro Muto said in an interview yesterday turbulence in the financial markets could affect Japan’s economic growth and make it difficult to decide the appropriate time to raise the interest rate. Commented Muto: “We have repeatedly said we’ll raise interest rates in accordance with the improvements in the economy and prices; we don’t have any pre-determined schedule.”

Muto also added that tighter credit conditions and the U.S. housing slump have not yet affected spending by consumers and companies, adding that the sharp fall in housing starts could be contained.

According to Muto, Japan’s economic growth will average over 2% over the next two years through March 2009, while core consumer prices, excluding fresh food, would enter “positive territory” from the end of the year or towards the beginning of next year.

Minutes of the Bank of Japan Monetary Policy meeting released today showed housing investment is likely to remain sluggish in the short-term and would regain against the backdrop of rising household incomes and accommodative financial environment.

Furthermore, the minutes also showed that annual rate of change in the CPI had been flat, and is expected to remain flat in short run.

Japan Times reported today that the Shinko Research Institute has projected that group pre-tax profits of major companies is estimated to be the fifth record in a row to 18.1 trillion yen in the fiscal first half.

Financial stocks fell on bearish sentiment after Wells Fargo, one of the largest banks in the U.S. said that the current housing slump is the worst since the Great Depression. Mitsubishi UFJ Financial Group fell 2.91%, Mizuho Financial Group declined 2.56% and Sumitomo Mitsui Financial Group plunged 1.87%.

Real estate stocks retreated on the news that condominium sales in the greater Tokyo area dropped 9.1% in October from a year ago. Mitsubishi Estate Company plummeted 5.02% and Mitsui Fudosan fell 4.38%.

The Tokyo Stock Exchange plans to list 50 exchange traded funds. The ETFs are basket of stocks helping investors to take exposure to a industrial sector, investment strategy, or country focused investment index. TSE plans to increase the total number of index to 100 in the next two years. Japan’s Financial Services Agency notes that Deutsche Borse AG, London Stock Exchange, and NYSE Group Inc have more than 100 ETFs.

Of the Nikkei 225 Index shares, Asahi Breweries led gainers, followed by increases of 5.06% in Shinsei Bank Limited, 3.61% in Bank of Yokohama, 3.37% in Japan Tobacco and 2.70% in Meiji Seika.

Kumagai Gumi led decliners in the index with a fall of 9.40%, followed by losses in Dowa Holdings of 7.70%, Toho Zinc Company of 7.63%, Nippon Soda Company of 7.28% and Nippon Light Metal of 6.48%.

The yen traded at elevated level to 110.24 from 110.26 against the dollar and 161.22 from 116.25 against the euro. Sony Corp dipped 1.11%, Toyota Motor Company slumped 1.77%, and Canon slipped 1.26%.