Oil Up on OPEC, Service Index Lifts Stocks

123jump.com Staff
05 Mar, 2008
New York City

U.S. stocks rebounded in the morning trading after the release of ISM service index. The February measure showed a lower decline compared to January decline. OPEC left its production quota unchanged after a meeting and indicated that there is no sign of demand slack. Crude oil jumped 2%. Big Lots surged 23% after beating the earnings expectations and increasing the earnings guidance for 2008.

[R]11:00AM New York – U.S. stocks rallied in the morning after a statement from OPEC and a rise in service industry index.[/R]

ISM Service index increased in February to 50.8% from 41.9% in January, indicating growing service sector. The news lifted market sentiment and stocks advanced in the morning trading.

Banks, energy, and retailers advanced in the morning trading. Wells Fargo added 63 cents to $29.46 and Citigroup increased 14 cents to $22.24.

OPEC after a meeting in Vienna, Austria agreed to keep crude oil production unchanged and indicated that there is no sign of demand slacking. Crude oil, after the news, jumped 2% and traded as high as $102 a barrel.

Crude oil supplies fell 3.1 million barrels in the week ended February 29 according to the weekly inventory report released by Energy Department. Gasoline inventories rose to 234.3 million barrels from 232.6 million barrels and that for distillate declined to 117.6 million from 120 million barrels.

Chevron added 95 cents to $87.69 but Valero declined $1.67 to $55. Vale, the Brazilian iron ore miner added $1.22 to $35.18 and BHP Billiton increased $2.29 to $73.89.

Earnings News

Big Lots ((BIG)) today reported net income of $92.0 million or $1.04 per diluted share for the 13 week or fourth quarter of fiscal 2007 on net sales declined to $1.4 billion from $1.54 billion a year ago.

This compares to net income of $104.3 million, or $0.94 per diluted share for the 14 week fourth quarter of fiscal 2006. Operating profit increased 9.4% from 8.9% a year ago.

For the 52 week fiscal 2007 ended February 2, 2008, net income was $158.5 million, or $1.55 per diluted share, compared to net income of $124.0 million, or $1.11 per diluted share, for the 53 week fiscal 2006.

For the fourth quarter of fiscal 2007, the income from continuing operations was $85.6 million, or $0.97 per share, compared to income from continuing operations of $91.6 million, or $0.83 per share, for the same period of fiscal 2006.

For fiscal 2007, income from continuing operations was $151.2 million, or $1.47 per share compared to income from continuing operations of $112.6 million, or $1.01 per diluted share for fiscal 2006.

Inventory ended the fourth quarter at $748 million, down 1% or $10 million compared to last year. Lower inventory value resulted from a decline in store count as average store inventory levels were relatively flat compared to the prior year.

Big Lots estimated income from continuing operations in 2008 to increase between $1.70 and $1.80 per share from $1.41 in 2007. The retailer estimated same store sales to increase between 1% and 2%.

Big Lots stock jumped 21% or $3.69 to $21.05.