Durable Orders Rise, China Mobile Earnings Soar

123jump.com Staff
27 Aug, 2008
New York City

Durable goods orders rose 1.3% in July matching the rise in June. The better than expected increase in orders lifted stocks in the morning trading. Tropical storm Gustav, after dropping rain in Haiti appears to heading towards Gulf of Mexico. In earnings news, China Mobile earnings rose sharply as it adds more than 20 million subscribers. PetroChina earnings fell on losses in its refining business.

[R]10:00AM New York – U.S. stocks edged higher after better than expected rise in durable goods orders in July. China Mobile earnings surge but at PetroChina fell.[/R]

U.S. durable goods orders rose 1.3% in July and after adjusting for transportation, orders rose 0.7%. Orders excluding defense equipment increased 2.8% according to the Commerce Department. The third consecutive monthly increase in orders is driven by nearly 50% fall in dollar against euro and at least 20% decline against other major currencies. Orders in June rose 1.3% as well. Nondefense new orders for capital goods in July increased $4.5 billion or 6.3 percent to $76.3 billion. The revised gross domestic product data is scheduled to release tomorrow.

Crude oil futures prices for immediate delivery rose $1.87 a barrel to $118.14 after the downgraded Tropical Storm Gustav headed towards Louisiana after it dumped rain in and around Haiti.

Stock Movers

Talbots, Inc ((TLB)) surged 8% or 80 cents to $10.90 after it reported sales decline of 8% and net loss in the quarter of $25 million or 47 cents a share.

Dollar Tree ((DLTR)) fell $2.34 to $36.83 after it reported net sales increase of 12% and net earnings rise of 13.3% to $37.6 million or 42 cents a share.

Merrill Lynch ((MER)) rose 1.5% or 18 cents to $24.27 after Temasek Holdings Pte indicated that it may increase stake in the troubled broker. The Singapore investment fund has acquired stake in the broker earlier at nearly twice the price and express confidence in the current management despite a 50% fall in stock price.

Airlines fell as crude oil surged in the morning trading as Tropical Storm Gustav approach refineries installation in the Gulf of Mexico. AMR, the parent of American Airlines ((AMR)) dropped 64 cents to $8.96 and UAL Corp ((UAUA)) declined $1.01 to $10.14.

PetroChina Company ((PTR)) rose 76 cents to $129.15 in New York trading after it reported first half net income fell 35% as refining losses dragged the profit from 46% rise in retail petrol prices on sales rise of 40% to 550 billion yuan.

China Mobile ((CHL)) rose $1.78 to $61.71 after it reported second quarter profit rise of 51% to 30.6 billion yuan or $4.5 billion and operating profit rose 16% to 104.4 billion yuan. The average phone usage increased to 496 minutes from 440 minutes a year ago period and average revenue per user fell 84 yuan from 88 yuan a month.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 25.75 or 0.20% to 12,752.96, , Hang Seng index in Hong Kong increased 408.06 or 1.94% closed to 21,464.72.ASX 200 index in Australia increased 3.70 or 0.07% to close 5,011.20. The KL Composite index in Malaysia decreased 2.85 or 0.27% closed to 1,067.65.

The Kospi Index in South Korea increased 3.67 or 0.25% to close at 1,493.92, SET index in Thailand closed higher 7.07 or 1.06% to 675.99 and JSE Index in Indonesia increased 23.52 or 1.12% to 2,131.06. The Sensex index in India decreased 185.43 or 1.28% closed to 14,296.79.

Europe Markets Review

In London FTSE 100 Index traded higher 1.10 or 0.02% to 5,471.80, in Paris CAC 40 Index decreased 40.55 or 0.93% to 4,328.00 and in Frankfurt DAX index traded lower 55.44 or 0.87% to 6,285.08. In Zurich trading SMI decreased 40.00 or 0.56% to 7,053.72.

U.S. Earnings Review

Dollar Tree, Inc, the nation''s leading operator of single-price point dollar stores reported second quarter sales, rose 12% to $1.09 billion from $971.2 million a year ago. Net income in the quarter increased 13.29% to $37.6 million or 42 cents per diluted share compared to net income of $32.6 million or 33 cents per share, a year ago.

Comparable same-store sales increased 6.5%.

Dollar Tree, Inc ((DLTR)) in the last one year traded as high as $44.13 in August 2007 and as low as $20.72 in January 2008. Based on the yesterday’s closing price the company has a market cap of $3.53 billion.

The Talbots, Inc, a specialty retailer and direct marketer of women’s apparel, shoes, and accessories reported second quarter sales decreased 8.39% to $528 million from $572.3 million a year ago. Net loss in the quarter was $25.0 million or 47 cents per diluted share compared to net loss of $13.3 million or 25 cents per share, a year ago.

Comparable store sales declined 10.9%.

The Talbots, Inc ((TLB)) in the last one year traded as high as $23.84 in August 2007 and as low as $6.48 in January 2008. Based on the yesterday’s closing price the company has a market cap of $555.23 million.