France and Germany Up 1.7%

123jump.com Staff
21 Dec, 2007
New York City

European markets advanced for the second day in a row after metal and energy prices advanced. Philips agreed to buy Respironics for 3.6 billion euros and Russia based Vimpel Communication purchased Golden Telecom for $4.3 billion. Alitalia management favored a bid from Air France-KLM Group over that from domestic emerging carrier Air One. British pound fell to a 8-year low against euro on the interest rate outlook. France and Germany led the gaiers in the region with a rise of 1.7%.

[R]10:30PM Frankfurt, 4:30PM New York, 8:30AM Sydney[/R]

[R]Global Markets Indexes[/R]

In London FTSE 100 Index closed up by 88.50 or 1.39% to 6,434.10, in Paris CAC 40 Index increased 91.32 or 1.66% to close at 5,602.77, and in Frankfurt DAX index closed higher 133.48 or 1.70% to close at 8,002.67. In Zurich SMI closed up by 65.53 or 0.78% to close at 8,468.37.

Dow Jones Industrial Average closed up 205.42 or 1.55% to a close of 13,451.06, S&P 500 edged higher 24.35 or 1.67% to 1,484.47, and Nasdaq Composite Index traded up 51.13 or 1.94% to a close of 2,691.99. In Toronto TSX Composite gained 178.98 or 1.33% to close at 13,585.99.

Of the 30 stocks in Dow Jones Industrial Average, 28 closed higher, 2 closed lower, and none was unchanged.

AIG led the gainers in the index with a rise of 2.57% followed by increases in AT&T of 2.4%, in DuPont of 2.3%, in Alcoa of 2.3%, and in McDonalds of 2.1%. Only two stocks in the index declined. Altria fell 0.09% and Honeywell dropped 0.03%.

Of the stocks in S&P 500, 427 closed higher, 69 fell, and 4 were unchanged.

Sixteen stocks fell more than 3% and twenty three stocks rose more than 3%.

Circuit City led the decliners with a loss of 28% followed by losses in Jabil Circuit of 22%, in Micron Technology of 5.4%, in Washington Mutual of 4.2%, and in Ambac Financial of 3.9%. Hess Corporation led the gainers with a rise of 9% followed by increases in Unisys of 8.8%, in First Horizon of 7.4%, and in Huntington Banc of 7.3%.

E*Trade, Morgan Stanley, Terex, and US Steel gained more than 5%.

In Tokyo Nikkei 225 Index higher 225.40 or 1.50% to close up at 15,257.00, in Hong Kong Hang Seng index closed up by 609.83 or 2.26% to 27,626.92, in Australia ASX 200 closed increased by 70.10 or 1.13% to close 6,247.00.

In South Korea Kospi Index increased 33.95 or 1.84% to close at 1,878.32, Thailand closed up 21.89 or 2.76% to 813.60, and Indonesia and India were closed for local holidays.

In Latin Markets Peru led the gainers with a rise of 2.3% followed by increases in Brazil of 2.22%, in Colombia of 1.1%, in Chile of 1.78%, in Venezuela of 1.43%, in Mexico of 1.7%, and in Argentina of 0.23%.

Bond Yields increased on 10-year U.S. bonds to 4.16% and 30-year bonds to 4.57%.

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

Crude oil rose $2.26 to close at $93.38 per barrel for a front month contract, natural gas increased 4 cents to $7.214 per mBtu, and gasoline futures increased 5.48 cents to close at 238.24 cents per gallon.

Gold edged higher $12.20 in New York trading to close at $815.40 per ounce, silver closed up 15 cents to $14.49 per ounce, and copper for front month delivery gained 13.20 cents to 309.75 per pound and in London copper futures market was closed.

Dollar edged lower against euro to $1.4358 and higher to 114.190 yen.


[R]11:30AM New York – Vimple Communication agrees to pay $4.3 billion for Golden Telecom.[/R]

A total of more than $10 billion deals were announced today and a potential investment of $5 billion in Merrill Lynch from Temasek kept market averages rising.

Dow Jones Industrial Average jumped 162 to 13,407, Nasdaq added 32.44 to 2,673.62, and S&P 500 increased 17.15 to 1,477.28.

Vimpel Communications has agreed to pay $4.3 billion or $105 per share for Golden Telecom. The offer price of $105 per share represents a premium of 3.5% to the closing price of Golden Telecom common stock on November 30, 2007, the business day before Golden Telecom and VimpelCom announced that they were in negotiations regarding a potential transaction, and a premium of 10.1% and 27.6% to the average closing price of Golden Telecom common stock over the previous 60 and 120 days, respectively.

The VimpelCom Group includes companies operating in Russia, Kazakhstan, Ukraine, Uzbekistan, Tajikistan, Georgia and Armenia. The VimpelCom Group''s GSM and 3G license portfolio covers a territory with a population of about 250 million including Russia, Kazakhstan, Ukraine, Uzbekistan, Tajikistan, Georgia and Armenia.

Philips Electronics has agreed to purchase Respironics $5.1 billion or $66 per share. The offer price represents a premium of approximately 31% over Respironics'' average closing share price for the thirty trading days ended December 20, 2007. The Board of Directors of Respironics has unanimously approved the transaction.

According to the company press release, after the purchase, Respironics will become the headquarters for Philips Home Healthcare Solutions group within Philips Healthcare, and Respironics'' senior operating leadership are expected to remain with the organization.

Philips has made a number of successful acquisitions in the area of home healthcare so far including Lifeline Systems, Health Watch and Raytel Cardiac Services.

Merrill Lynch ((MER)) jumped 3% after the Wall Street Journal reported that it is in advanced talks with Singapore controlled investment fund Temasek. Merrill is expected to receive an investment of $5 billion if the deal is consummated.

The recent mortgage market meltdown has depleted capital base of many large banks and brokerage houses. UBS, Citigroup, Bear Stearns, and Morgan Stanley are just few of the large financial services firm that have accepted investment from investors in Asia and Middle East.

Research in Motion ((RIM)) reported sharply higher revenue and earnings in the third quarter from a year ago and from the second quarter of this year. The maker of popular BlackBerry mobile communication devices jumped 10% or $12.09 to $119.18 after it reported revenue and earnings rise of more than 100%.

Circuit City ((CC)) fell $1.41 to $5.25 after it reported higher than expected loss and declining revenue. Revenue in the quarter declined to $2.96 billion from $3.06 billion and loss increased to $207.3 million from $20.4 million. Loss per share increased to 7% of net sales to $1.26 from 12 cents or 0.7% of net sales in the previous year.

Walgreen Co ((WAG)) reported fiscal first quarter 2008 earnings increase of 5.5% to $456 million or 46 cents per share from $432 million or 43 cents per share. Revenue in the quarter rose 10.4% to $14 billion. Comparable same store sales in the quarter rose 5.4% and front end drug store sales rose 4.6%.

Netsuite ((N)) jumped 20% a day after it priced 6.2 million shares at $26 per share.

The Commerce Department reported that November personal consumption increased 1.1% from October.


[R]8:00AM New York – Asian Markets closed higher led by Japan and Hong Kong.[/R]

In Tokyo Nikkei 225 Index higher 225.40 or 1.50% to close up at 15,257.00, in Hong Kong Hang Seng index closed up by 609.83 or 2.26% to 27,626.92, in Australia ASX 200 closed increased by 70.10 or 1.13% to close 6,247.00.

In South Korea Kospi Index increased 33.95 or 1.84% to close at 1,878.32, Thailand closed up 21.89 or 2.76% to 813.60, and Indonesia and India were closed for local holidays.

[R]5:00AM New York, 7:00PM Tokyo – Sumitomo Metal Industries and China Steel form a joint venture to build a plant in Viet Nam.[/R]

Stocks in Japan rose for the second day after Toshiba and Hitachi realigned their interests in disk drive and chip manufacturing businesses.

In Tokyo trading Nikkei 225 rose 1.5% or 22.5 to 15,257.00 but down 1.7% for the week, while the broader Topix Index gained 11.64 to 1,469.20.

In the first section of the Tokyo Stock Exchange 8.7 billion shares worth 1.0 trillion yen were traded and in the second section 392 shares worth 6.7 billion changed hands.

Of the Nikkei 225 stocks 166 gained 53 declined, and 6 were unchanged. Mitsumi Electric Company Limited led gainers with a rise of 6.61% on reports of a restructuring in the electronics sector.

Exporters gained the yen slipped 0.19% from 113.02 to 113.04 against the dollar. Sony climbed 1.16%, Casio Computer jumped 2.35% and Toyota Motor Corporation soared 1.52%.

The Bank of Japan said yesterday in its monthly report that the pace of economic growth appears to be slowing on a significant drop in housing investment which is likely to recover in the coming quarters. The new building code has brought virtual halt on most residential and commercial construction activities.

According to the bank, domestic corporate goods prices and consumer prices are likely to increase as a result of increase in international commodity prices and the rise in food and petroleum prices.

The bank still considers the financial environment as accommodative, notwithstanding the credit demand in the private sector that has been more or less flat.

Sumitomo Metal Industries announced yesterday that the company would form a joint venture with China Steel Corp to establish a plant on the outskirts of Ho Chi Minh City in Vietnam. China Steel Corp will control 50% in the venture and Sumitomo Metal Industries will have 30% equity.

The steel plant is expected to commission in 2011 and produce steel sheets. Total investment is estimated at 110 billion yen.

Steelmakers advanced on news that Sumitomo Metal Industries would be partnering China Steel Corp in establishing a plant in Vietnam. Nippon Steel rose 4.92%.

Mitsumi Electric Company led the gainers in the Nikkei 225 Index with a rise of 6.61% followed by gains of 6.58% in Matsushita Electric Works Limited, of 6.29% in Japan Steel Work, in NSK Limited of 6.21%, and in Taiheiyo Cement of 5.51%.

Mitsumi Electric Company rose along with other electronic companies on the reports from Nikkei that Sharp Corporation would expand its purchases of advanced microchips from Toshiba Corp.

Also, Toshiba would most likely exit its venture with Matsushita Electric Industries Company and Hitachi through selling its 15% stake in IPS Alpha Technology Limited and buy its displays from Sharp Corporation. Sharp Corporation rose 2.89%, Toshiba gained 2.45%.

Hitachi rose 3.60% on Nikkei reports the company will spin off its hard disk drive business to U.S. buyout fund Silver Lake Partners.

Mitsui Sumitomo Insurance Company Limited led decliners in the Nikkei 225 Index with a drop of 3.44% followed by losses in J Front Retailing of 3.00%, in Nippon Express of 2.59%, in Sompo Japan Insurance of 2.59%, and in Mitsui OSK Lines of 2.51%.

Financial stocks slumped as Bear Stearns in New York recorded its first loss of $854 million in the fourth quarter and a surprise admission by bond insurance company MBIA Inc that it had $8.1 billion in collaterized debt obligations.

Mitsubishi IFJ Financial Group dropped 1.23%, Mizuho Financial Group tumbled 0.37% and Mitsui Sumitomo Financial Group plunged 3.44%.

Kyodo news online edition reported today that Sumitomo Mitsui Financial Group has rejected a request by the U.S. for the contribution of $5 billion towards a subprime mortgage bailout fund.

Nikkei news also reported today that Canon Inc is likely to report full year net income increase to 488 billion yen, 7% down from the initial projection of 500 billion yen. Canon closed down 2.24%

[R]5:00AM New York, 9:00PM Sydney- ASX 200 Index declined by 1.1% after gains in energy and financial stocks.[/R]

ASX 200 index declined 1.1% or 70.1 to close at 6,247.

The Preliminary market turnover was 1.7 billion, worth a total value of $10.75 billion, with 629 stocks moving up, 569 moving down, and 374 unchanged.

Flinders Diamonds was the most active stock with 85.76 million shares changing hands worth $7.89 million.

The world''s largest explosives maker, Orica Ltd has announced its intention to expand production at two of its ammonium nitrate factories at Yarwun and Kooragang Island. The move to expand follows Dyno Nobel Ltd''s decision to scrap its plans to build a plant in Australia. Dyno is Orica''s closest rival.

Dyno Nobel announced last week that it will abandon plans to build the plant despite spending $280 million ($242 million) on the project, opting instead to buy the key explosives ingredient to meet sales contracts with customers including Rio Tinto Group. Orica shares fell 1.8%.
Australian fund manager and resort operator, MFS Ltd''s Park Hyatt Hotel in Sydney has been acquired by an unidentified Japanese investor for a record $202 million ($174 million). The company will receive a transaction fee of at least A$5 million for the record price.

According to a statement released by the MFS the price paid for the hotel, which overlooks Sydney''s Opera House and Harbour Bridge, Southport is the highest ever for a single Australian hotel property. The sale translates to $1.3 million per room at the hotel.

The hotel has been under MFS management since September 2005. MSF has been managing the 158-room Park Hyatt property hotel on behalf of 2,400 investors in its PH Sydney Hotel Trust.
Centro Properties Group stock fell further after the company said that it plans to sell assets as collateral for $4.7 billion of bonds sold by Morgan Stanley and others.

According to a report authored by Merrill Lynch & Co''s Roger Lehman, loans that were used to fund the purchase of 388 U.S. properties by Centro have been packaged into commercial mortgage-backed securities that were also sold by JPMorgan Chase & Co. and Credit Suisse Group.

Comments by Chief Executive Officer Andrew Scott this week that the company may sell malls to help refinance $3.9 billion of debt by February 15, 2008 triggered a $3.8 billion loss in value. Any sale of assets backing the securities may affect payments to bondholders, according to Merrill Lynch.

Centro declined 15%.

Of the ASX 200 index shares, Centro Retail Group led the gainers with a rise of 21.9% followed by increases in Nexus Energy Ltd by 12.5%, in Incitec Pivot by 9.1%, in Aquarius Platinum of 8%, and in PMP Limited of 7.9%.

Of the ASX 200 index stocks Centro Properties led the decliners with a fall of 15.2% followed by losses in Tisman Speyer by 6.8%, Macarthur Coal by 6.4%, in Macquarie DDR Trust of 6.4%, and in Perilya Limited in 5.9%.

BHP Billiton was up 0.4% and Rio Tinto added 0.4%. The energy sector was mixed, with Woodside picking up 2.4%, Santos losing 0.6% and Oil Search dropping 1.3%.

The gold miners were up with Newcrest adding 4.6% and Lihir increasing 3.7%.

The banking sector was mixed, with ANZ gaining 2.1%, the National Australia Bank putting on 3.7%, Westpac adding 0.8% and the Commonwealth Bank shedding 0.02%.

The retailers were mixed, with Wesfarmers adding 1.3%, Woolworths picking up 1.4%, David Jones adding 3.3% and Harvey Norman losing 0.3%.

The media sector was stronger, with News Corp adding 1.4% and Fairfax gaining 2.7%.