Miners and Steel Stocks Rise, Toyota Falls

123jump.com Staff
08 May, 2008
New York City

U.S. stocks rebounded on the strength in retail, mining and metals and select financials. BHP Billiton, Vale, Cleveland Cliff, ArcelorMittal and Freeport McMoran led the gainers. Gold resurged after the ECB and the Bank of England left rates unchanged. Crude oil edged lower. Toyota Motor fell 4% after it offered gloomy outlook on sales and earnings for the current year but increased its dividend 20% on 4.5% rise in fiscal year 2008 earnings.

[R]11:50PM New York – Mining and metals stocks rallied as euro rebounded after ECB left rates unchanged.[/R]

Mining and metals stocks rebounded sharply after two days of weakness. BHP Billiton in New York trading rose $3.89 to $86.60. ArcelorMittal ((MT)) surged to a new high of $94.50 after it added $2.40. Cleveland Cliff ((CLF)) added $2.45 to $177.26.

Freeport McMoran ((FCX)) added $3 to $117.36 and Brazilian iron ore miner Vale added 69 cents to $39.75.

In precious metals trading gold resurged $14.40 to $885.60 per ounce on weakness in dollar against euro. Crude oil front month contract declined 91 cents to $122.62 but natural gas rose 5 cents to $11.37.

Costco leads same store sales gain

Costco, in one of the few retailers that have managed to show more than 5% same store sales rise for twelve months in a row. Costco same store sales rose 8% and excluding fuel sales rose 6% in the U.S. International sales rose 14% in April. Wal-Mart Stores reported sales rise of 3.2% in April as the company offered more drugs on discounts.

Jobless claims fall

Initial jobless claims filed for the week ending last week fell 18,000 to 365,000 and continuing claims in the period fell 10,000 to 3.02 million.

European central banks leave rates unchanged

The Bank of England left key rate at 5% and European Central Bank left rates unchanged at 4% today. Central banks around the world are fighting inflation, unlike the Federal Reserve in the U.S. which is more concerned with the falling economic growth.

Toyota revenue and earnings rise but offered weak revenue and earnings outlook

Toyota Motor Corporation reported for the fiscal year ending in March 2008 revenue increased 9.8% to 26.29 trillion yen (or $262 billion) from a year ago. Net income in the period rose 4.5% to 1.72 trillion yen. The company also announced cash dividend of 140 yen per share, an increase of 20% from a year ago. The dividend payout ratio improved to 25.9% from 23.4% a year ago and the company has targeted 30% as dividend payout ratio.

In fiscal year 2008, Toyota''s consolidated sales reached 8.91 million units, an increase of 389 thousand units over the last fiscal year. In Japan, vehicle sales decreased by 85 thousand units over the last year, to 2.19 million units. In North America, vehicle sales reached 2.96 million units, an increase of 16 thousand units.

Toyota lowered its consolidated financial forecast for the fiscal year ending March 31, 2009. Based on an exchange rate of 100 yen to the U.S. dollar and 155 yen to the euro, Toyota estimated consolidated net revenues of 25.00 trillion yen, operating income of 1.60 trillion yen and net income of 1.25 trillion yen.

Toyota (((TM)) in New York trading fell $4.60 to $100.15.

BHP to sell assets if Rio takeover succeeds

BHP Billiton chief executive Marius Kloppers has hinted that the mining giant could sell more than $53 billion of assets if it acquired Rio Tinto.

He told Britain''s Financial Times that the takeover could create the same scenario that occurred Australia''s BHP merged with Billiton of South Africa in 2001 when 15% of the combined assets had to be sold because they were irrelevant.

Possible targets for disposal include smaller or non-core assets in aluminium, copper and ferrous metals, which could realise $57.5 billion. A combined BHP and Rio would form a natural resources company with a combined market value of about $383 billion.

Kloppers said he was also confident of securing approval from European Union competition regulators for the takeover, which is opposed by Rio, """"""""in the fourth quarter"""""""" of this year.

BHP in New York trading rose to $86.69.

Earnings review

News Corporation reported third quarter sales rise of 16% to $8.75 billion from a year ago revenue of $7.5 billion. Earnings in the period rose to $2.7 billion from $871 million on tax-free sale of certain assets and stock exchange with Liberty Media. Earnings per class A share rose to 91 cents from 29 cents in the prior year.

News Corp ((NWS.A)) stock rose 47 cents to $18.89.

Watson Wyatt Worldwide, Inc., a global consulting firm today reported revenue increased 16% for the third quarter of fiscal year 2008 to $457.5 million (14% constant currency) compared to $395.6 million the same quarter of fiscal 2007. Net income for the third quarter was increased 25.74% to $42.5 million or $0.96 per diluted share an increase from $33.8 million or $0.76 per diluted share in the prior-year third quarter.