U.S. Orders Rise; Weak Europe Economy

123jump.com Staff
03 Sep, 2008
New York City

U.S. stocks edged lower as crude oil prices fell below $108 a barrel. Base and precious metals prices declined dragging stock benchmarks in Canada and UK lower. The Bank of Canada left its key rate unchanged at 3% and Australia reported weak economic data for the second quarter. Euro zone economy in the second quarter shrank at 0.2% from the first quarter and retail sale in July fell 0.4%.

[R]10:30AM New York – U.S. stocks declined as crude oil futures and metals prices fell.[/R]

Traders shifted their focus from the storm activities in the Gulf of Mexico, the single largest source of oil and natural gas for the U.S. to the near term supply and demand trends. Crude oil future prices trended lower 2% or $2.10 and traded just above $107 a barrel. Crude oil futures have lost nearly $40 from its record high in July above $147 a barrel, a drop of 30% in the last two months. Crude oil is still trading 45% higher than a year ago price.

The U.S. stocks fell in the morning trading as dollar edged higher and commodities prices in New York fell.

Stocks in UK fell sharply as oil and metals prices continue to decline in international trading. UK benchmark index, FTSE 100, dominated by the mining and energy companies with nearly 40% weighting, declined 2% by the late afternoon trading.

World Economic Data

New orders for manufactured goods in July, up five consecutive months, increased $5.9 billion or 1.3% to $465.4 billion, the U.S. Census Bureau reported today.

The Bank of Canada left is key rate at 3% a day after the Reserve Bank of Australia lowered its key rate by 25 basis points.

Euro zone economic growth declined in the second quarter 0.2% from the first quarter when the economy expanded at 0.7% rate. Compared with the second quarter of 2007, seasonally adjusted GDP rose 1.4% in the euro area and 1.6% in the EU27, after gaining 2.1% and 2.3% respectively for the previous quarter.

Retail sales in July fell 0.4% in the euro area after dropping 0.9% in June. Australia reported second quarter economic growth by 0.3%

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 80.12 or 0.64% to 12,689.59, Hang Seng index in Hong Kong decreased 457.40 or 2.17% closed to 20,585.06.ASX 200 index in Australia decreased 56.00 or 1.09% to close 5,060.00.

The Kospi Index in South Korea increased 19.75 or 1.40% to close at 1,426.89, SET index in Thailand closed lower 9.58 or 1.45% to 649.93 and JSE Index in Indonesia decreased 43.05 or 1.99% to 2,116.00. Market of India was closed today.

Europe Markets Review

In London FTSE 100 Index traded lower 117.70 or 2.09% to 5,503.00, in Paris CAC 40 Index decreased 69.15 or 1.52% to 4,469.92 and in Frankfurt DAX index traded lower 59.51 or 0.91% to 6,458.96. In Zurich trading SMI decreased 49.44 or 0.68% to 7,349.15.

Earnings Review

Isle of Capri Casinos, Inc, operator of branded gaming facilities and related lodging and entertainment facilities in regional markets in the United States and internationally reported first quarter revenues jumped 1.4% to $282.3 million from $278.5 million a year ago. Net loss in the quarter was $3.6 million or 12 cents per diluted share compared to net loss of $7.1 million or 23 cents per share, a year ago.

Isle of Capri Casinos, Inc ((ISLE)) in the last one year traded as high as $21.00 in October 2007 and as low as $3.97 in July 2008. Based on the yesterday’s closing price the company has a market cap of $224.33 million.

Joy Global Inc, mining equipment firm reported third quarter sales jumped 45% to $904 million from $621.8 million a year ago. Net income in the quarter grew 35.39% to $113 million or $1.03 per diluted share compared to net income of $73 million or 66 cents per share, a year ago.

Joy Global Inc ((JOYG)) in the last one year traded as high as $90.00 in June 2008 and as low as $42.10 in September 2007. Based on the yesterday’s closing price the company has a market cap of $7.12 billion.

Staples, Inc, office supply retailer reported second quarter sales jumped 18% to $5.07 billion from $4.29 billion a year ago. Net income in the quarter fell 16% to $150.2 million or 21 cents per diluted share compared to net income of $178.8 million or 25 cents per share, a year ago.

Comparable same-store sales fell 7%.

Staples, Inc ((SPLS)) in the last one year traded as high as $26.57 in August 2008 and as low as $19.69 in November 2007. Based on the yesterday’s closing price the company has a market cap of $17.39 billion.

China Merchants Holdings (International) Co. Ltd, an investment holding company said first-half sales climbed 81% to HK$15.838 billion from HK$3.081 billion a year earlier. Net profit in the quarter jumped 27.4% to HK$1.932 billion or HK$83.89 per basic share compared to net profit of HK$ 1.42 billion, a year earlier.

China Merchants Holdings (International) Co. Ltd ((0144)) in the last one year traded as high as HK$ 55.75 in November 2007 and as low as HK$ 25.80 in August 2008. Based on the yesterday’s closing price the company has a market cap of HK$ 68.82 billion.

China Resources Enterprise, Limited, a government-controlled retailer and brewer said first-half sales fell 9.7% to HK$31.8 billion from HK$35.1 billion a year earlier. Net income in the quarter fell 60% to HK$1.49 billion or 62 cents per basic share compared to net income of HK$3.74 billion, or HK$1.58 per share, a year earlier.

China Resources Enterprise, Limited ((0291)) in the last one year traded as high as HK$ 36.00 in October 2007 and as low as HK$18.60 in August 2008. Based on the yesterday’s closing price the company has a market cap of HK$48.21 billion.