Weary Market Ignores Wal-Mart and Lowes

123jump.com Staff
14 Nov, 2005
New York City

AFTER THE CLOSE: Agilent Technologies reported Q4 earnings of 5 cents vs. 15 cents a year ago. Comtex reports decline in earnings on flat sales. Bob Evans Farms reports earings of 37 cents vs. 30 cents a year ago on revenue growth of 4%. The company opened eight new restaurant in the quarter. Quintiles Transnationals reported earings of $27 million, lower than $34 million a year ago on one-time charges and benefits from repatriation and revenue rise of 19%.

U.S. MARKET AVERAGES

Market traded in a narrow range despite strong earnings from Wal-Mart and Lowe’s.

Expectations at the opening were after three week of rising averages. Falling oil, strong retail earnings and two large deals brought more buyers in the early hours. Strength of earnings from Wal-Mart and Lowe’s supported rise in retail stocks. A number of stocks in the sector are to report earnings this week including Nordstrom, Staples and Starbucks.

Georgia-Pacific has agreed to be acquired by Koch industries for $13 billion, 36% premium to the close of Friday. Host Marriott agreed to buy 38 properties from Starwood at a value close to $4 billion. The materials and hotels segments were on the account of these two deals. Natural resource stock in the paper and pulp industries have not enjoyed investors favor as returns have been not attractive in the last decade.

Market did trade in the afternoon on conviction as traders retreated to their familiar worries of inflation and prepared for the report on retail sales and CPI and PPI.

At close tech lead Nasdaq sold-off and Dow lost most of its gains of the day. On New York Stock Exchange 21 stocks declined for every 11 rising stocks on volume of 1.06 billion shares.


MOVERS AND SHAKERS

Wal-Mart Stores Inc. ((WMT)) reported third-quarter results that came above analyst expectations, excluding costs of $40 million connected to Hurricanes Katrina, Rita and Wilma. The company also offered a fourth-quarter outlook equal to recent Wall Street expectations. Wal-Mart’s stock is currently up 1.2%.

The retailer Lowe''s Cos. Inc. ((LOW)) also posted earnings that came in ahead of analyst forecasts. The company’s shares added 4.2%.

The maker of branded paper goods Georgia Pacific Corp. ((GP)) said it has received an offer of $48 a share, or $13.2 billion in cash and $7.8 billion in assumed debt, from privately-held company Koch Industries. Georgia Pacific’s shares soared almost 37%.

Starwood Hotels & Resorts Worldwide ((HOT)) agreed to sell 38 of its properties to Host Marriott Corp. ((HMT)) for nearly $4 billion, including debt assumption. Host Marriott said it expects the acquisition to lift earnings in 2006. Starwood shares lost 0.3% while Host Marriott''s stock added 5.3% on Friday.

INTERNATIONAL MARKET NEWS

Asian-Pacific benchmarks finished the session mixed. The Nikkei advanced in the morning but reversed course in the afternoon to close down 0.3% largely due to losses in the financial sector which overweighed gains in tech stocks. South Korea’s Kospi rose 0.1% and hit a fresh peak of 1,257,63. Among other regional markets, Hong Kong’s Hang Seng lost 0.8%, while Australia’s All Ordinaries climbed 0.7%.

European markets closed little changed, supported by resource stocks and oil companies which gained on the back of higher oil prices. Investors also digested a lot of deal talk. The German DAX 30 gained 0. 03%, the French CAC 40 rose 0.3%, and London’s FTSE 100 added 0.09%.

OIL, METALS, CURRENCIES

Crude oil prices briefly reached $58.20 a barrel on weather forecast, predicting a cold snap in the US. Light sweet crude December delivery rose 67 cents to $58.20 before slipping to $57.69, up 16 cents. Heating oil traded up 69 cents at $1.74 a gallon. Gasoline added a cent to $1.4961. Natural gas gained 2 cents to $11.93 per 1,000 cubic feet. London Brent advanced 58 cents to $55.47.

Gold prices advanced in European trading. In London the precious metal closed at $467.50 per troy ounce, up from $467.20. In Zurich gold advanced to $467.25 from $466.35. In Hong Kong gold rose $4.60 to close at $470.55. Silver traded at $7.80, up from $7.46.

The U.S. dollar traded higher against most major currencies. The euro was quoted at $1.1707, up from $1.1706. The dollar bought 118.76 yen, up from 117.97. The British pound traded at $1.7372, down from $1.7395.

EARNINGS NEWS

Lowe''s Cos ((LOW)), home improvement products retailer, posted Q3 earnings of 81 cents a share, up from a profit 65 cents a share in the year-ago period, beating analyst estimate of 77 cents a share. Sales rose 16.9% in Q3 and same-store sales with 6.2%. The company said it recorded positive same-store sales in all 20 of its product categories, and 19 of its 21 geographic regions during the quarter.

Tyson Foods Inc ((TSN)), chicken, beef and pork producer, posted Q4 net income of 28 cents a share, up from 19 cents a share in the same period last year, missing analysts’ forecasts of 30 cents a share. Q4 sales amounted to $6.5 billion, down from $7.1 billion. Operating income was $190 million, compared to $178 million.

Outdoor Channel Holdings, Inc. ((OUTD)), television network operator, reversed to a Q3 net profit of one penny a share, up from a net loss of $1.75 a share in the same period last year on 4.2% revenue growth. Subscriber fees climbed 11.5% from the year-ago period on an greater number of paying subscribers.

Wal-Mart Stores Inc. ((WMT)), retailer, announced that Q3 earnings increased 3.8% to 57 cents a share, from 54 cents in the year-ago period on 10% higher revenue, in line with analyst forecasts of 57 cents a share. Same-store sales for the quarter advanced 3.8%, reflecting rises of 2.9% at Wal-Mart outlets and 8.1% at Sam''s Club.

Rockwood Holdings Inc. ((ROC)), producer of specialty chemicals and advanced materials, reported a Q3 loss of 25 cents a share, narrower than last-year’s loss of $1.50 a share in the comparable period, missing analyst estimate of 18 cents a share. Q3 earnings included $31.8 million in after-tax charges related mainly to its initial public offering. Sales jumped 44.6%, buoyed by a strong performance in its advanced ceramics and specialty chemicals businesses.

EPlus Inc ((PLUS)), information technology company, reported that its Q3 net income shed a penny to 21 cents a share, from 22 cents a share in the same period last year despite revenue growth compared with the year-ago period.

Eagle Bulk Shipping Inc. ((EAGLE)), a dry-bulk tanker shipper, posted net income of 27 cents a share and revenue of $21.1 million. The company announced it expects to pay a Q4 dividend of 57 cents a share to stockholders in February 2006.

[Five Star Quality Care, ((FVE)), operator of senior living centers, posted a Q3 loss of $5.64 a share, down from profit of 10 cents a share in the same period last year. Excluding charges, Five Star would have gained 11 cents a share. During the quarter, Five Star terminated 12 management agreements with Sunrise Senior Living.