Wholesales Trade up 1.2%

Elena
09 Dec, 2005
New York City

U.S. averages opened flat, pressured by Intel which released mid-quarter lower-than-expected sales outlook and drug maker Merck which dropped on news that it withheld information about the cardiac side effects of its arthritis drug Vioxx. Eli Lilly lifted sentiment, projecting fourth-quarter and full-year earnings at the top of its guidance and forecasting 2006 earnings to be from 8% to 12% higher.

U.S. MARKET AVERAGES

U.S. stocks opened near the flat line as Intel Corp. released a disappointing sales outlook which put technology shares under pressure, but an upbeat profit forecast from drug maker Eli Lilly and Co. provided some support

Intel ((INTC)) shares dropped nearly 3% in extended-hours trading after the company'' released mid-quarter lower-than-expected sales outlook.

Oil prices pushed further higher, following a sharp advance Thursday with a winter snow storm hitting U.S. Northeast. Light, sweet crude rose to $61 per barrel. Natural gas and gasoline are also continuing to rise on Friday.

The semiconductor sector showed strength in early trading, despite Intel being slightly under the flat level. AMD was the best performer in the group, rebounding with an advance of 2.4%.

Energy stocks ticked lower with the oil service sector down about 1%, coming off a multi-year high. The oil sector also declined 1%. Elsewhere, chemical and housing stocks posted modest losses.

The Dow Jones industrial average was down 1.92 points, or 0.02%. The Standard & Poor''s 500 Index was up 0.28 points, or 0.02%. The technology-laced Nasdaq Composite Index was up 0.82 points, or 0.04%.

Bond prices fell, with the yield on the 10-year Treasury note climbing to 4.51% from 4.46% late Thursday

MOVERS AND SHAKERS

Intel Corp. ((INTC)) released a disappointing mid-quarter sales forecast, as the company reaffirmed its revenue guidance, versus expectations that it would lift it. The stock fell 1.5%.

The New England Journal of Medicine said Merck ((MRK)) withheld information about the cardiac side effects of its arthritis drug Vioxx. The medical journal said that the Merck study failed to mention three heart attacks suffered by participants using Vioxx, which has since been taken off the market because of safety concerns. Company’s shares fell 2.4%.

Eli Lilly ((LLY)) announced it sees its fourth-quarter and full-year earnings at the top of its guidance, or in the range of 73 to 79 cents and $2.80 to $2.86 respectively. The company forecast 2006 earnings to be from 8% to 12% higher compared with the previous year. Shares of the company gained 4.5%.

JAMDAT Mobile ((JMDT)) surged on news that it agreed to be acquired by Electronic Arts ((ERTS)) for $680 million, or $27 per share. The stock climbed 17%.

Dendrite International ((DRTE)) sharply moved to the downside, after it revised its fourth-quarter earnings forecast and named a new CFO. The stock idropped 22%.

ECONOMIC NEWS

The Department of Commerce released its report on wholesale trade in the month of October on Friday, showing a notable increase in wholesale sales as well as a modest increase in wholesale inventories.

The report showed that wholesale sales rose 1.2 percent in October following a 2.4 percent increase in September. The increase was partly due to a 1.9 percent increase in wholesale sales of durable goods, which benefited from higher sales of metals and minerals and furniture.

At the same time, the report showed that wholesale inventories rose 0.2 percent in October after rising 0.6 percent in September. The increase came as an increase in wholesale inventories of durable goods more than offset a decrease in wholesale inventories of non-durable goods.

Subsequently, the Commerce Dept. said that the inventories/sales ratio fell to 1.13 in October from 1.15 in September.

INTERNATIONAL MARKET NEWS

Asian-Pacific benchmarks finished Friday session higher. The Nikkei recovered from yesterday’s sharp decline and advanced 1.5% to 15,404.05, ignoring disappointing revised GDP report. Regional markets gained with Singapore Straits Times in the lead, up 0.7%, followed by Hong Kong’s Hang Seng, up 0.2%, and Taipei’s Weighted Index rising 0.2%.

European markets were weak at mid-day trading, hurt by late Wall Street losses Thursday and falling chip stocks as Intel lowered its fourth-quarter sales outlook. The German DAX 30 fell 0.4%, the French CAC 40 dropped 0.4%, and London’s FTSE 100 lost 0.3%.

OIL, METALS, CURRENCIES

Crude oil crossed $61 a barrel, reaching a five-week high as cold weather raised worries about increased heating fuels demand. Light sweet crude for January delivery climbed 35 cents to $61.01 a barrel on the Natural gas surged to $15.15 per 1,000 cubic feet. London Brent advanced 30 cents to $58.92.

European gold hit a 25-year high, rising nearly $530 per ounce on robust world demand, inflation concerns and central-bank buying. Gold for February delivery rose $5.10 to $529 per ounce from $527.80. Silver gained 5 cents to $9.04.

The U.S. dollar advanced against major currencies ahead of industry report, expected to show an increase in consumer confidence. The dollar rose to $1.1793 per euro from $1.1817. The dollar bought 120.46 yen, up from 120.33.