Nasdaq Rallies 1%

Elena
01 Dec, 2005
New York City

The U.S. Department of Labor reported that initial jobless claims declined by 17,000 to 320,000 in the week ended Nov 26, vs expectations of a decline of around 323,000. The Commerce Dept. said that personal income rose 0.4% in October after surging up 1.7% in September, slightly below estimates of a 0.5% increase. Personal spending increased by 0.2% in line with economist estimates.

U.S. MARKET AVERAGES

The stock markets opened higher on retail sales and economic data easing inflation concerns, with the three major averages advancing through the first trading hour. After significant losses during the previous session, the Dow and S&P 500 were each up by more than 0.7% and the Nasdaq led the rally, climbing by more than 0.9%.

The Commerce Dept. reported that consumer prices rose just 0.1% in October, far better than September's 0.9% jump. Strong holiday shopping season is expected on data showing incomes rise of 0.4% and spending increase of 0.2%.

A decrease in initial jobless claims also lent support to stocks. The Labor Department said first-time jobless claims fell to 320,000 last week, down from 335,000 the week before.

Technology stocks were among the drivers of Thursday''s early gains. The semiconductor sector rose 1.8%, reaching a new high. Teradyne ((TER)), National Semiconductor ((NSM)) and Maxim Integrated Products ((MXIM)) led the blue-chip rally.

Energy stocks climbed in early trading, including a 1.4% advance in the oil sector. Following two weak sessions, the gold sector rebounded, climbing by 2.6%.

The nation's largest retailer. Wal-Mart Stores ((WMT)) reported a 4.3% rise in its November comparable sales, matching an estimate it released last week. Total sales for the month came in at $25.768 billion, the company said, up 9.4% from last year''s mark of $23.544 billion. For December, Wal-Mart predicted comparable sales growth of 2%-4%.

Costco ((COST)), the largest U.S. warehouse club operator, posted a 6% rise in November sales at its stores open at least a year, missing analyst forecast of a 7.2% increase.

United Retail Group ((URGI)) reported a 5% growth in same-store sales in November. JoS A. Bank Clothiers ((JOSB)) posted a 3.8% rise in same-store sales.

Yum! Brands ((YUM)) confirmed its earnings guidance for fiscal 2005, saying it still expects a profit of $2.64 per share, in line with analysts'' consensus. Looking ahead to fiscal 2006, the company predicted worldwide system-sales growth of 5%-6%, with a 2%-3% increase in U.S. blended same-store sales.

MOVERS AND SHAKERS

Rigel Pharmaceuticals ((RIGL)) released disappointing results from a clinical study of R112, a potential intranasal therapy for the treatment of allergic rhinitis. In the trial, treatment with R112 failed to show a statistically significant difference from placebo treatment in improving nasal allergy symptoms. The stock dropped nearly 63%.

MTC Technologies Inc ((MTCT)) projected Q4 earnings of 34 cents to 37 cents a share on revenue of $96.8 million to $100.8 million compared with a previous forecast of 32 to 40 cents a share on revenue of $108.7 million to $114 million. The company sees 2005 earnings of $1.34 to $1.37 a share on revenue of $373 million to $377 million. MTC also said that the planned acquisition will not occur this year, as conditions connected with it were not satisfied. Company’s shares fell 11.2%.

ECONOMIC NEWS

The Commerce Dept. said that personal income rose 0.4 percent in October after surging up 1.7 percent in September. The increase came in slightly below economist estimates of a 0.5 percent increase.

The report also showed that personal spending increased by 0.2 percent in October following a 0.5 percent increase in September. The personal spending growth came in line with economist estimates.

The Commerce Dept. noted that its index of consumer prices excluding food and energy rose at an annual rate of 1.8 percent in October, down from a 2.0 percent rate of growth in September. This marked the slowest pace of growth since February 2004

The number of people filing for first-time unemployment benefits declined in the most recent week and came in below economists'' expectation.

The U.S. Department of Labor revealed Thursday that initial jobless claims came in at 320,000 for the week ended on November 26, a decline of 17,000 from the previous week''s revised total. Economists had expected a level of around 323,000.

The 4-week moving average for initial claims, which flattens out the week-to-week volatility, fell 1,250 to 322,500. Continuing claims for the week ended November 19, the most recent week for which the government has data, dropped 24,000 to 2.767 million.

INTERNATIONAL MARKET NEWS

Asian-Pacific benchmarks finished mixed. The Nikkei ended the session at a five-year high of 15,130.50, climbing 1.8% on shipping and constructions shares with Advantest and Softbank the biggest contributors to the rise. Across the region, Hong Kong’s Hang Seng gained 0.9%, South Korea’s Kospi jumped 0.7%, while stocks in Australia slid 1.2%.

European markets advanced at mid-day dealings, shrugging off lower close of U.S. markets overnight and receiving strong support from energy stocks and takeover deals ahead of European Central Bank interest rate meeting. The German DAX 30 gained 0.6%, the French CAC 40 rose 0.7%, and London’s FTSE 100 added 0.4%.

OIL, METALS, CURRENCIES

Crude oil prices slipped on higher heating oil stocks, easing supply concerns. Light sweet crude for January delivery declined 23 cents to $57.09 a barrel in electronic trading on the Nymex. London Brent fell 37 cents to $54.68.

European gold declined. In London the precious metal was fixed at $494.40 per troy ounce, down from $494.50. In Zurich gold traded at $494.35, down from $494.85. In Hong Kong gold gained 50 cents to close at $493.75. Silver traded unchanged at $8.13.

The U.S. dollar traded mixed against its major counterparts. The euro was quoted at $1.1781, down from $1.1791. The dollar bought 119.96 yen, up from 119.81. The British pound traded at $1.7311, up from $1.7290.

EARNINGS NEWS

Warner Music Group Corp. ((WMG)), record-label operator and music publisher, announced that Q4 net loss narrowed to 21 cents a share, against a net loss of $1.27 per share in the year-ago period on 13% higher revenue. If not for special items, the company would have gained 8 cents a share against a loss of $1.01.

Conn's, Inc. ((CONN)), consumer electronics retailer, reported that Q3 net profit surged 44.6% to 38 cents a share, from the year-ago period on 30.4% revenue growth and same-store sales up 23.3%.

Movado Group ((MOV)), watch maker and seller, posted Q3 earnings of 54 cents a share, up from 44 cents a share in the same period last year on 12% revenue growth If not for non-recurring items, earnings would have been 51 cents a share, topping analyst estimate of 48 cents at $18.45.

Gerber Scientific, Inc. ((GRB)), industrial goods company, posted a Q2 fiscal 2006 loss of 2 cents per share, narrower than last year’s loss of 5 cents per share on revenue growth. Excluding the impact of a one-time charge, the earnings would have been 5 cents per share.

Del Monte Foods Company ((DLM)), consumer goods company, posted Q2 net income of 21 cents per share, a penny above the year-ago profit, including 1 cent per share integration expense. Net sales increased 4.2% from the prior year period.