Silver Approaches $9

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

Fourth quarter stock market rally looked tired today. As the market entered into the final three weeks of the months, averages traded sideways for the most of the session. Semiconductor, energy, utilities and materials sectors fell during the day. Gold, silver and copper rose and traded near record highs. Texas instruments raised its low end of the earnings guidance from 36 cents to 38 cent and range to 38 cents to 40 cents. Microsoft to invest $1.7 B in India in the next four years.

U.S. MARKET AVERAGES

Wall Street was in a mood to sell and it did.

Market was in a cautious mood at the start of the day and did not shake-off its inflation worries during the session’s trading. Market did not seem keen to add its gains of the yesterday’s session and traded cautiously during the morning hours. Despite better-than-expected oil inventory report market fell during the day. Yield on ten-year bond rose to 4.51% driving the financial and brokerage sectors lower.

Tech sector saw mild volatility as semiconductor stocks came under mild pressure ahead of Intel and Texas instruments mid-quarter reports. A brokerage report upgrading Cisco helped tech stocks, but not much.

Gold and precious metal mining stocks rose. Home builder stocks fell on several reports that investment segment of the housing market is slowing. Banks, financials, brokerages, telecoms, utilities and energy sector stocks fell during the session.


MOVERS AND SHAKERS

Cisco Systems ((CSCO)) reaffirmed its long-term growth forecast. Consequently, J.P. Morgan upgraded the company from neutral to overweight. The stock rose 2.4%.

SigmaTel ((SGTL)) was downgraded to peer perform from outperform on evidence that the company's fourth-quarter is tracking toward the low end of expectations and even lower due to increased competition, weaker demand, and market pressure from Apple. Company’s shares dropped 8.4%.

SimpleTech Inc ((STEC)), memory chip maker, cut its fourth-quarter revenue forecast and said earnings per share will come below its previous outlook. The company sees its revenue in the range of $60 million to $63 million, compared with its previous outlook of $70 million. The stock slid 9.7%.

ECONOMIC NEWS

Coming back from the previous week's sharp declines, crude oil inventories advanced in the latest week, according to government data released Wednesday. Stocks of gasoline also moved higher.

The Department of Energy's Energy Information Administration revealed that crude oil inventories rose by 2.7 million barrels for the week ended December 2, climbing to 320.3 million barrels from the prior week's level of 317.6 million barrels. This followed a decline of 4.2 million barrels in the previous week. Oil inventories were 11.1% higher than their levels of the same time last year.

Gasoline inventories also posted a week-over-week advance of 2.7 million barrels, the government said, compared to the previous week's 500,000-barrel slide. Gasoline stocks were 4.3% below their levels of last year. Inventories of distillate fuel oil rose by 2.7 million barrels as well in the most recent week.

INTERNATIONAL MARKET NEWS

Asian-Pacific benchmarks closed higher, supported by U.S. markets gains overnight. The Nikkei helped the upside momentum, recovering from yesterday’s losses and rising 0.4% ahead of economic data Friday. Across the region Indonesian Jakarta Composite surged 2.5%, Hong Kong’s Hang Seng rose 1%, while South Korea’s Kospi gained 0.3%, reaching a new high on tech stocks.

European markets finished mixed as gains from metals and telecoms stocks offset losses in automakers and insurance shares. The German DAX 30 slipped 0.3%, the French CAC 40 closed flat, while London’s FTSE 100 added 0.1%.

OIL, METALS, CURRENCIES

Crude oil slipped below $60 a barrel on report, showing higher oil, gasoline and heating oil supplies the previous week. Light sweet crude for January delivery fell 73 cents to $59.21 a barrel on the Nymex. Heating oil lost 3 cents to $1.7366 a gallon. Gasoline fell 1.5 cents to $1.5676 per gallon. Natural gas climbed 21 cents to $13.70 per 1,000 cubic feet.

European gold hit a 24-year high for the second consecutive session on heavy fund buying. In London the precious metal was fixed at $510 per troy ounce. In Zurich gold traded at $513.25, up from $506.55. In Hong Kong gold rose $4.70 to close at $513.25 and silver traded at $8.75, up from $8.62. In New York gold closed up $4.00 to $517.80 per ounce and silver closed up8.50 cents to $8.875. Copper rose 4.5 cents to 210.95 cents.

The U.S. dollar advanced against other major counterparts. The euro was quoted at $1.1724, down from $1.1794. The dollar bought 121.02 yen, up from 120.74. The British pound traded at $1.7315, down from $1.7418.

EARNINGS NEWS

Synovis Life Technologies Inc ((SYNO)), medical device company, announced that Q4 profit advanced to 2 cents a share, breakeven with the year-earlier period. Earnings per share remained unchanged despite the profit gain because there were more shares
outstanding in Q4. Revenue advanced to $16.8 million from $14.6 million in the comparable period a year-ago.

Pall Corp. ((PLL)), maker of filtration systems for industrial applications, announced that its Q1 earnings rose 16 percent to 20 cents per share, up from 17 cents per share in the same period last year on growth in its industrial and biopharmaceuticals segments. Sales increased 4 % and total industrial sales went up 6 %.