Retailers Gain on Holiday Shopping

Elena
25 Nov, 2005
New York City

Following Thanksgiving, light volume trading is expected as stock and bond markets will close early and commodities remained closed. Retailers will be the major players today, expected to report sales growth after hectic holiday shopping.Three U.S. telecom companies are buying a collection of local telephone access lines from wireless carrier Alltel Corp. for as much as $10 billion.

U.S. MARKET AVERAGES

U.S. stock futures are pointing to a flat or slightly higher opening with most markets ready to resume trading after holiday, but volume is expected to be light as the U.S. stock and bond markets will close early.

The positive start of Friday session is seen on expectations that the large-scale holiday shopping for Thanksgiving will provide a support to retailers and will help market’s rally. Since late October gains in retailers have helped the S&P’s retail index rise 12% higher. Retreating oil prices and anticipation that the Fed Reserve is approaching the end of its rate-rising cycle, also helped futures rise.

The world's largest retailer, Wal-Mart Stores Inc. ((WMT)) is expected to report preliminary November sales data later on Friday or Saturday. Wal-Mart projects U.S. same-store sales to rise in the range of 3% to 5%.

The owner of Macy’s and Bloomingdale’s Federated Department Stores Inc. ((FD)) may also be in focus. Shares in the company jumped 3.2% late on Wednesday on hopes for stronger sales.

S&P 500 futures were down 0.9 point but slightly above their fair value. Dow Jones industrial average futures were down 3 points, and Nasdaq 100 futures were down 0.5 point.

INTERNATIONAL MARKET NEWS

Asian-Pacific benchmarks ended the session mixed with the Nikkei rising for the seventh consecutive session, extending rally to 14,784,29, or 0.3% on economic and corporate news. Across the region, bourses in Hong Kong and Australia closed unchanged, South Korea’s Kospi added 0.1%, while Singapore Straits Times dropped 0.4%.

European markets traded a little higher at mid-day with support coming from strong resource stocks and their record-high prices. A market drag was supermarket Tesco which declined 0.9% after reporting quarterly sales. The German DAX 30 was little changed at 0.01%, the French CAC 40 added 0.1%, and London’s FTSE 100 gained 0.2%.

OIL, METALS, CURRENCIES

European gold prices hit an 18-year high, rising close to $500 on building inflation concerns. In London gold traded at $497.35 per troy ounce, up from $493.90.

The U.S. dollar advanced against all major currencies on weak German data and Japanese inflation figures. The euro was quoted at $1.1749, down from $1.1783. The dollar bought 119.36 yen, down from 118.83. The British pound traded at $1.7184, down from $1.7226.