New Decade Low for GM

Elena
10 Nov, 2005
New York City

Asian-Pacific Markets closed mixed with the Nikkei unchanged on economic data and China''''s Shanghai Composite the biggest decliner, down 1.8%. European stocks traded higher at mid-day, led by the German DAX 30, up 0.6%. Siemens AG posted a 88% decline in Q4 profit. General Motors said it will have to restate earnings after overstating 2001 profit by up to $400 million.

U.S. MARKET AVERAGES

U.S. stock futures point to Thursday start at the unchanged mark, pressured by disappointing sales outlook from Cisco Systems and an earnings restatement at General Motors. In addition, key data due out today also weigh on sentiment. U.S. trade deficit and consumer confidence reports are expected.

Cisco Systems released upbeat Q1 results but posted sales guidance for the second quarter that missed consensus expectations, as the networking giant sees only a 8% rise.

General Motors, after a session where its shares fell to 13-year lows, said it will have to restate earnings after overstating 2001 profit by up to $400 million.

Yahoo Inc. may be active after The Wall Street Journal reported it has dropped out of the race to buy a stake in Time Warner Inc.''s America Online unit.

Dow Jones futures were recently up 1 point, S&P 500 futures fell 0.4 of a point, and Nasdaq 100 futures fell 3.5 points.

Key data out Thursday include the U.S. trade gap, expected to widen to $61.5 billion in September, and the University of Michigan consumer sentiment index for November, which is expected to rise to 76.2 from 74.2.

ECONOMIC NEWS

The number of people filing for first-time unemployment benefits ticked up in the most recent week and came in a little above economists' expectation.

The U.S. Department of Labor revealed Thursday that initial jobless claims came in at 326,000 for the week ended on November 5, an advance of 2,000 from the previous week's revised total. Economists had expected a level of around 320,000.

The 4-week moving average for initial claims, which flattens out the week-to-week volatility, fell 16,250 to 334,250. Continuing claims for the week ended on October 29, the most recent week for which the government has data, rose 23,000 to 2.818 million.

INTERNATIONAL MARKET NEWS

Asian-Pacific benchmarks closed mixed on weaker U.S markets Wednesday and deadly explosions in the Middle East. The Nikkei traded almost unchanged, edging up 0.06% on machinery orders data and ahead of GDP report Friday. China’s Shanghai Composite was the biggest decliner in the region, losing 1.8% on export-related issues. Singapore’s Straits Times index declined 0.5%, while Australia’s all Ordinaries gained 0.4%.

European markets traded higher at mid-day, boosted by solid earnings from companies such as Germany’s Siemens AG and the positive close of U.S. markets overnight. The German SAX 30 gained0.6%, the French CAC 40 added 0.4%%, and London’s FTSE also advanced 0.4%.

OIL, METALS, CURRENCIES

Crude oil prices dropped below $59 a barrel on weekly petroleum report and signs of lower demand due to unusually warm weather for the season. Light sweet crude December delivery lost 41 cents to trade at $58.52 a barrel on the Nymex, the lowest level since July. Heating oil shed nearly a penny to trade at $1.7815 a gallon. Gasoline declined to $1.5420. London Brent fell 48 cents to $56.40.

Gold prices rose in European trading. In London the precious metal was fixed at $467, up from $463.65. In Zurich gold rose to $466.78 from $462.45. In Hong Kong gold gained $4.50 to close at $466.75. Silver traded at $7.66, up from $7.46.

The U.S. dollar was mixed against major currencies. The euro was quoted at $1.1772, up from $1.1763. The dollar bought 117.62 yen, up from 117.47. The British pound traded at $1.7476,up from $1.7426.

EARNINGS NEWS

Siemens AG ((SI)), industrial conglomerate, posted a 88% decline in Q4 profit at 77 million euros, with the units it''s holding onto seeing a 32% profit decline. Siemens sold the loss-making handsets division to BenQ during Q4. Communications profit went down 81% on severance charges and market-driven margin pressures, Siemens Business Services' loss widened to 427 million euros from 28 million euros on charges, and its VDO Automotive unit saw a 8% profit decline amid a decline in investment and higher R&D expenses.

Rockwell Collins Inc. ((COL)), producer of communications and aviation electronics, announced that Q4 net income rose 29% to 62 cents a share from 48 cents a share in the year-ago period on 15% higher sales, in line with analyst estimate of 62 cents a share. Earnings and revenue in fiscal 2006 should rise by double-digit percentages.

W&T Offshore Inc. ((WTI)), oil and gas company, said that Q3 net income climbed 40% to 80 cents a share from 58 cents a share in the same period last year on 27% higher revenue, missing analysts’ forecasts of 86 cents a share. The company also said that on account of Hurricanes Katrina and Rita, it deferred 5.3 billion cubic feet equivalent of production in Q3 and will defer 11.7 Bcfe in Q4.

Green Mountain Coffee Roasters, Inc. ((GMCR)), roasted coffee distributor, reported that Q4 net income rose to 31 cents a share, up from 27 cents a share in the same period last year on 14.6% sales growth. Total coffee pounds shipped were up 9.3%. The Company''s net income in Q4 includes recognition of non-cash income of $0.01 per share as a result of its equity investment in Keurig, Inc. as compared to a non-cash loss of $0.04 per share in Q4 of fiscal 2004.

ING Group ((ING)), insurance and banking services company, reported that Q3 net profit advanced to 1.88 billion euros on 44.6% rise in banking profit while insurance profit increased only 4.9%. Sequential growth of 41% at its Internet savings bank ING Direct helped banking results, while year-ago earns of 348 million euros from equity sales weighed on insurance results.