Semis Lead Averages

123jump.com Staff
02 Dec, 2005
New York City

After five straight weeks of gains in averages, market seems to have plenty of vigor. Even though broader market averages are declining, stocks in semiconductors, techs, financial brokers, and home builders are on the rise. Philadelphia index on semiconductor stocks reached a 40-month high.

U.S. MARKET AVERAGES

It was another day of positive economic news, this time it was unemployment and job creation.

Market has been served with positive news on economic growth, initial claims on unemployment, job creation and unemployment level. Market displayed its usual restraint and took today’s news on employment in stride.

Morning strength in the major averages turned into mildly negative tone at mid-day as market nears the end of the week. Even after five straight week of gains, it seems market still has lot vigor.

Semiconductor stocks showed another day of strength. The semiconductor index on Philadelphia exchange rose to 40 months high and climbed another 0.8% today after gaining 11% in November. Intel, Broadcom, Advanced Micro Devices are leading the sector at mid-afternoon.

Oil displayed its usual volatility and rose in the wake of weather warnings in the North East.

The biotech sector is among the worst performers in the first half hour of trading, reversing Thursday''''s rally with a decline of 1.2%. Transportation stocks are also weak, led lower by losses in the trucking group.

Even with the losses elsewhere in transportation, the airline sector is ticking up in the early going, climbing by about 1.1%. The gaming space is also showing strength.


MOVERS and SHAKERS

Novell Inc. ((NOVL)) stock rose 10% on earnings news. The company reported revenue growth of 6.5% to $320 million for the quarter ending October 31st. Before the restructuring charges of $38 million the company would have earned 7 cents a share beating the estimates of 3 cents. For the current quarter the company is forecasting revenue between $260 million and $270 million.

Walgreen Co ((WAG)) reported November same-store sales growth of 7.8% compared to a year ago. The pharmacy sales rose which accounts for 63% of total sales rose 7.7% for the month.


ECONOMIC NEWS

Friday morning, the Department of Labor released its report on the employment situation in the month of November, showing employment growth that came in roughly in line with economist estimates.

The report showed that non-farm payroll employment rose by 215,000 in November following a downwardly revised increase of 44,000 in October. Economists had expected payrolls to increase by 225,000 compared to the increase of 56,000 previously reported for October.

The Labor Dept. said that job growth was widespread, with large gains among construction and food service jobs. Manufacturing employment also edged up in November, increasing by about 11,000 jobs.

The closely watched report also showed that the unemployment rate came in at 5.0 percent in November, unchanged from the previous month. Economists had been expecting the unemployment rate to remain unchanged.

The data may generate some optimism about the strength of the labor market, which has been in question recently following disappointing data in September and October. The recent hurricanes and the subsequent surge in energy prices had been keeping job growth subdued.

INTERNATIONAL MARKET NEWS

Asian-Pacific benchmarks finished in the positive territory. The Nikkei hit another five-year high, climbing 1.9% to 15,421,60, boosted by strong U.S. economic data, easing inflation concerns and higher Wall Street close overnight. Among other regional markets, Hong Kong’s Hang Seng rose 0.9%, Sydney’s All Ordinaries advanced 0.9%, and South Korea’s Kospi gained 0.3%.

European markets advanced at mid-day dealings, pushed higher by the best performers of the day, technology stocks. Key U.S. economic news, expected later in the day, also weighed on sentiment. The German DAX 30 gained 0.3%, the CAC 40 rose 0.2%, reaching a three-year high of 4,644, and London’s FTSE 100 rose 0.4%. The euro fell 0.3% to $1.1709.

OIL, METALS, CURRENCIES

Crude oil prices neared $59 a barrel on U.S. cold. weather forecast. Light sweet crude for January delivery rose 19 to $58.66 a barrel in electronic trading on the Nymex. London Brent jumped 50 cents to $56.65..

European gold hit a 23-year high. In London the precious metal was fixed at $504.75 per troy ounce, up from $499.75. In Zurich gold traded at $505.05, up from $501.66. In Hong Kong gold gained $2.80 to close at $506.55. Silver traded at $8.51, up from $8.41.

The U.S. dollar advanced against its major counterparts. The euro was quoted at $1.1709, down from $1.1734. The dollar bought 120.74 yen, up from 120.46. The British pound traded at $1.7282, down from $1.7310.