Thyssen, ArcelorMittal, SocGen Rise

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

European markets edgged higher after a wave of earnings from Vivendi, ArcelorMittal, ING, Societe Generale, EADS and ThyssenKrupp. ArcelorMittal earnings rose 5% to $2.4 billion and ThyssenKrupp profit jumped 106% to 502 million euros. ThyssenKrupp revenue rose 1% to 13.2 billion and ArcelorMittal revenue increased 22% to $30 billion. Steel prices are expected to rise in the second half of the year as Arcelor raised prices and ThyssenKrupp hinted of price increases.

[R]10:00PM Frankfurt, 4:00PM New York, 8:00AM Sydney – European markets edged higher after consumer related stocks gained. ArcelorMittal, Societe Generale and ING gained.[/R]

Global Markets Update

ArcelorMittal, the largest steel maker added 4.15% to 64.70 euros in Amsterdam trading and closed at $97 in New York after it reported first quarter profit rise of 5% to $2.4 billion. The largest steelmaker lifted the second quarter profit outlook. Shipment in the quarter rose 8% to 29.2 million tons and sales rose 22% to $29.8 billion from a year ago. In the quarter the company paid dividend of $0.5 billion and bough back $2.1 billion of stocks.

Chairman and CEO Lakshmi N. Mittal said, “We have also now fully captured the $1.6 billion of synergies that we announced we expected from our successful merger with Arcelor. Looking forward, we expect EBITDA in the second quarter to be higher than in the first quarter to exceed $6.5 billion, largely on account of strong demand for our products across all regions.”

ThyssenKrupp reported second quarter revenue rose 1% to 13.2 billion euros and net income increased 106% to 502 million euros. Orders received in the quarter rose 1% to 14 billion. Earnings per share rose to 1.85 euros from 1.76 euros.

The company press release added, “For the current fiscal year we expect world crude steel production to increase to 1.43 billion metric tons. In our core European market, which remains relatively robust, all the signs indicate a further rise in steel consumption, albeit below the high growth rates of the previous two years.

Steel prices will continue to be determined to a large degree by high raw material and energy costs. In supply year 2008/2009 European producers will have to contend with price increases of 65% for fine ore and almost 87% for pellets. Prices for high-quality Australian coking coal will increase by as much as 200%.”

Societe Generale rose 5% to 70.75 euros after it reported mark down of assets related to credit markets of 1.45 billion euros. The bank wrote down assets of 2.05 billion in the fourth quarter. In the first quarter of 2008 the bank reported a 23% decline in earnings to 1.09 billion euros from 1.4 billion euros. The revenue in the quarter fell 8.6% to when adjusted for similar businesses or dropped 6.1% to 5.6 billion euros.

ING Groep NV added 4% to 25.40 euros after it reported earnings decline of 15.2% to 1.54 billion euros and earnings per share of 74 euro cents. New life insurance sales jumped 23.1% and new business reached 320 million euros.

BHP Billiton jumped 5% to 2,117 pence on the speculation that Chinalco, Aluminum Corporation of China may take a stake in a company similar to the one it took in acquisition target Rio Tinto.

Bradford & Bingley plans to sell 300 million pounds in stock offering to bolster its capital base after the wholesale mortgage market has nearly collapsed. The largest private mortgage lender in the UK fell 9% to 144 pence.

U.S. stocks advanced in the morning trading as inflation measure showed a smaller than expected rise in April. Monthly inflation rose at 0.2% according to the government. However most consumers feel the pain of rising food and energy costs. Deere & Company fell after earnings rose 22%. Whole Foods dropped 10% after quarterly earnings declined. Markets in Europe, Asia and Mexico traded higher.

The Bank of England inflation report suggested that pressures on inflation are rising as credit market remains tight. Separately the governor of BOE said that inflation may rise above 3% for several quarters. Shareholders of Royal Bank of Scotland approved £12 billion offering. Eurasian Natural led advancers in the FTSE 100 index with a rise of 7%.

Stocks in Japan traded in positive territory after NTT and Astellas Pharmacies increase dividends and share buyback. In Tokyo trading Nikkei 225 rose 1.18% or 164.82 at 14,118.55, and the broader Topix Index increased 1% or 12.99 at 1,373.04. The Bank of Japan reported that the Domestic Corporate Goods Price Index rose 3.7% from a year ago at 107.3 after adding 3.9% in March.

China reported a raft of economic data suggesting that the economy continues to grow at a rapid clip. April industrial output rose at 15.7% and international trade rose at 24% in the first four months of the year. Despite a rise in wholesale inflation at 10.3%, retail sales surged at 22% in April from a year ago. However a sharp rise in food and energy costs is hobbling the consumer. In stock trading, Hong Kong Exchanges & Clearing fell after it reported earnings rise of 79%.

Mumbai stocks rose after a rise in IT and metal stocks. Rupee fell to a 13-month low to 42.44 against one dollar as rising crude oil import worries investors. Software exporters gained on rupee weakness. Metal and steel companies added in the trading after the government said it is considering industry request to review duties on metal exports. Cement companies fell on the worries that recent price weakness and rising new capacity will hurt the industry margins.

European Markets indexes

In London FTSE 100 Index closed higher 4.10 or 0.07% to 6,216.00, in Paris CAC 40 Index increased 56.57 or 1.13% to close at 5,055.24 and in Frankfurt DAX index higher 23.05 or 0.33% to close at 7,083.24. In Zurich trading SMI increased 16.29 or 0.21% to close at 7,594.61.

North American Markets indexes

Dow Jones Industrial Average rose 66.20 or 0.52% to a close of 12,898.38, S&P 500 closed up 5.62 or 0.4% to 1,408.66, and Nasdaq Composite Index increased 1.58 or 0.06% to close at 2,496.70. In Toronto TSX Composite closed up 9.61 or 0.07% to 14,626.31.

Of the 30 stocks in Dow Jones Industrial Average, 24 closed higher, 6 closed lower, and none was unchanged.

Hewlett Packard led gainers in the index with a rise of 3.1% followed by increases in Verizon Communication of 2.2%, in Merck & Company of 1.7%, in Disney of 1.4%, and in Home Depot of 1.29%. Caterpillar led the decliners in the Dow Jones with a fall of 1.6% followed by losses in McDonalds of 1.1%, in Procter & Gamble of 0.35% and Alcoa with a loss of 0.28%.

Of the stocks in S&P 500 index, 360 stocks increased, 131 declined, and 9 were unchanged. Of the stocks in the index, 11 stocks fell more than 3% and 28 gained more than 3%.

Whole Foods Market led the decliners in the S&P 500 index with a loss of 14% followed by losses in Deere & Company with a loss of 9.9%, in Manitowoc of 5.4%, in Sovereign Bancorp of 4.5%, in Range Resources of 3.6%. Freddie Mac led the gainers in the S&P 500 index with a rise of 9.1% followed by increases in Pulte Homes of 6.8%, in Lennar Homes of 6.4%, in Novellus Systems 6.4% and Fannie Mae of 6.3%.

South American Markets Indexes

Mexico led the gainers in the Latin American markets with a rise of 1.45% followed by increases in Peru of 1.14%, in Colombia of 0.78% and in Chile of 0.54%. Venezuela led the decliners in the index with a loss of 1.8% followed by losses in Brazil of 0.68%.

Asian Markets

In Tokyo Nikkei 225 Index closed higher 164.82 or 1.18% to 14,118.55, in Hong Kong Hang Seng index decreased 19.29 or 0.08% closed to 25,533.48. In Australia ASX 200 index higher 60.00 or 1.03% to close 5,872.70. In Malaysia KL Composite index increased 1.20 or 0.09% closed to 1,287.74.

In South Korea Kospi Index increased 0.95 or 0.05% to close at 1,843.75, in Thailand SET index closed higher 9.66 or 1.15% to 848.94 and Indonesia JSE Index edged increased 30.44 or 1.26% to 2,449.34. Sensex index in India increased 225.49 or 1.35% to 16,978.35.

Commodities, Metals, and Currencies

Crude oil decreased $1.88 to close at $123.92 a barrel for a front month contract, natural gas increased 13 cents to $11.56 per mBtu, and gasoline futures increased 3.68 cents to close at 320.10 cents per gallon.

Gold decreased $3.10 in New York trading to close at $866.50 per ounce, silver closed down 39 cents to $16.83 per ounce, and copper for front month delivery decreased 1.80 cents to $3.73 per pound.

Wheat futures decreased 9.75 cent in Chicago trading and closed at $7.95 per bushel. Sugar decreased 49 cent to $11.16 per pound. Soybean future closed up 11.70 cents to $13.79 a bushel.

Dollar edged higher and traded near record low against euro to $1.5462 and edged higher against yen to 105.09.

Yields on U.S. bonds increased to 3.91% with 10 years of maturities and decreased to 4.61% with 30-year of maturities.