GE Raises Outlook

Elena
18 Nov, 2005
New York City

Asian-Pacific benchmarks advanced on economic optimism, Wall street rally and falling oil with the Nikkei hitting a new five-year high of 1.5% to 14,623,12. European stocks also gained at mid-day on automotive and airline sectors with each average rising 1.1%. In corporarte news, Cisco Systems Inc announced plans to buy Scientific-Atlanta Inc, the top U.S. maker of cable television set-top boxes, for $6.9 billion.

U.S. MARKET AVERAGES

U.S. stock futures are pointing to a higher opening, Friday, following yesterday’s broad rally and after General Electric Co. raised its 2006 forecast, raising hopes about the economy''s strength, and said it was selling most of its reinsurance business

Market sentiment was also lifted by better-than-expected profit from computer maker Hewlett-Packard Co late Thursday and news from automaker General Motors Corp. that it does not see itself headed for bankruptcy.

Swiss Re, the world's second-largest reinsurer, said it agreed to buy Insurance Solutions from GE for $6.8 billion. GE also said it now expects faster earnings growth in 2006 and will increase its dividend and stock buyback plan.

Cisco Systems Inc. announced plans to buy Scientific-Atlanta Inc, the top U.S. maker of cable television set-top boxes, for $6.9 billion.

S&P 500 futures were up 2 points, above their fair value. Dow Jones industrial average futures were up 17 points, and Nasdaq 100 futures were up 1 point.

INTERNATIONAL MARKET NEWS

Asian-Pacific benchmarks closed higher, making solid gains on the back of economic optimism, Wall Street rally Thursday and falling crude oil prices. The Nikkei opened sharply up and extended gains to hit a five year high of 1.5% to 14,623,12, buoyed by optimism of economic recovery. Across the region, Singapore’s Straits Times rose 1.4%, Hong Kong’s Hang Seng gained 0.6%, and Sydney’s All Ordinaries climbed 0.9%.

European markets rallied at mid-day trading, boosted by gains in the automotive and airline sectors, made on the back of further slipping crude oil prices. Nestle, which advanced on announcing a plan to buy back $2.3 billion in stock, also provided support. All three major averages, the German DAX 30, the French CAC 40, and London’s FTSE 100 climbed 1.1%.

OIL, METALS, CURRENCIES

Crude oil prices rose on cold U.S. weather after dropping to a five-month low yesterday. Light sweet crude December delivery gained 3 cents to $56.37 a barrel on the Nymex. Heating oil traded at $1.7050 a gallon. Gasoline edged up to $1.4624. Natural gas traded at $11.946 per 1,000 cubic feet. London Brent rose 26 cents to $55.11.

Gold prices hit an 18-year high on strong physical demand, central-bank buying and inflation worries. In London the precious metal was fixed at $487.90 per troy ounce, up from $484.60. In Zurich gold advanced to $487.78 from $484.40. In Hong Kong gold rose $8.80 to close at $488.45. Silver traded unchanged at $7.73.

Copper futures reached a record $1.961 a pound, up $1.50. Copper prices have surged this week on speculation that China is being forced to buy large quantities of the metal to cover a position taken by a Chinese copper dealer in London.

The U.S. dollar gained ground against other major currencies. The euro was quoted at $1.1682, down from $1.1749. The dollar bought 119.08 yen, up from 118.72. The British pound traded at $1.7122, down from $1.7189.

EARNINGS NEWS

Hewlett-Packard Co., ((HPQ)), provider of solutions for individual consumers, posted a Q4 profit of 14 cents a share, down from 37 cents a share in the year-ago period. If not for $1.57 billion in restructuring charges, H-P would have earned 51 cents a share, thus beating analyst estimate of 46 cents a share.

Starbucks,((SBUX)), high-quality whole bean coffee producer, reported Q4 net earnings of 16 cents a share, up 21% from the 13 cents a share in the year-earlier period on 23% revenue growth and a penny ahead of analyst estimate.

Nordstrom Inc, ((JWN)), retailer, reported that its Q3 profit advanced 38% to 39 cents a share, up from 27 cents a share a year ago on higher sales, beating analyst estimate of 35 cents a share. In Q4, Nordstrom expects earnings in the range of 60-65 cents a share, on same-store sales growth in a low single-digit percentage range.

Sports Authority Inc., ((TSA)), retailer, swung in Q3 to net earnings of 13 cents a share, up from a net loss of 11 cents a share in the year-ago period on revenue growth and a 1.2% same-store sales increase.. The company stated it is comfortable with analysts'' estimate for Q4 earnings of $1.07 a share, and forecast Q4 revenue of $730 million to $740 million.

H&R Block Inc., ((HRB)), financial services provider, reported a Q2 loss of 22 cents a share, down vs. a loss of 15 cents a share, in the same period a year ago. The company reduced its 2006 profit target after competition and rising rates in the mortgage market crimped the performance of the tax preparation company''s home-loan business.

Autodesk Inc., ((ADSK)), software company, announced that Q3 profit soared 28% to 38 cents a share, up from 30 cents a share in the year-ago period on 26% revenue growth, reflecting strong demand across its product lines and markets. Outside a tax benefit, the company would have gained 31 cents a share, beating analyst expectations by a penny.

Barnes & Noble Inc., ((BKS)), bookseller, posted Q3 net income of zero cents a share, down from 11 cents a share in the year-earlier period, beating analysts’ forecasts of a net loss of 2 cents a share. Sales advanced 4%.

BEA Systems Inc., ((BEAS)), software maker, reported net income of 9 cents a share, a penny up vs. 8 cents a share for the same period a year ago. If not for one-time charges, earnings would have been 11 cents a share, topping on that basis analysts’ expectations by a penny.

Foot Locker Inc., ((FL)), retailer, posted Q3 net earnings of 42 cents a share, down 12% from 47 cents a share in the same period last year on revenue and same-store sales growth, missing the analyst forecasts by a penny. The company expects Q4 income from continuing operations in a range of 53 cents to 61 cents a share, and for same-store sales growth in the low-to-mid single-digit range.