Mergers Lift Sentiment

Elena
12 Dec, 2005
New York City

Asian-Pacific benchmarks advanced, led by the Nikkei hitting a new five-year high of 15,738.70, followed by South Korean Kospi, up 1.2%. European averages traded higher at mid-day, boosted by media companies with the German DAX 30 in the lead, up 0.7%. Shares of Burlington Resources climbed on news that ConocoPhillips is in talks to buy the oil and gas producer for more than $30 billion.

U.S. MARKET AVERAGES

U.S. stock futures indicated a sharply higher opening of Monday trading session on deal news activity, including a report that ConocoPhillips is in talks to buy oil and gas producer Burlington Resources Inc. for more than $30 billion.

Investors are also likely to remain cautious ahead of the Tuesday meeting of the U.S. Fed Reserve’s policy-setting committee. Another quarter-percentage-point rate increase is expected, but investors are mostly interested in the outlook for rates and whether the long streak of rate hikes will end soon.

In other developments, traders will also keep an eye on Web-search company Google Inc. ((GOOG)), which is among a dozen companies set to replace laggards such as Sanmina-SCI Corp. ((SANM)) in the widely watched NASDAQ 100 Index. The changes are effective at the start of trading December 19.

Standard & Poor''s 500 futures were up 2.6 points, above their fair value. Dow Jones industrial average futures were up 39 points, and Nasdaq 100) futures were up 7 points.


INTERNATIONAL MARKET NEWS

Asian-Pacific benchmarks finished Monday session in the positive. The Nikkei soared to a new five-year-high, rising to 15,738.70 on increased confidence in financial stocks with Tokyo Stock Exchange admitting that the turbulent trading last week was due to a technical error in the trading system. Across the region, South Korea’s Kospi rose 1.2%, Hong Kong’s Hang Seng advanced 0.5%, and Australia’s All Ordinaries rose 0.6%.

European stocks advanced at mid-day dealings, buoyed by French media companies, including Vivendi Universal and gains in U.S. and Japanese markets. The German DAX 30 rose 0.7%, the French CAC 40 gained 0.6%, and London’s FTSE 100 rose 0.3%.

OIL, METALS, CURRENCIES

Crude oil prices climbed on oil depot explosion on London over the weekend and OPEC’s decision to maintain production at the highest levels. Light sweet crude for January delivery gained 55 cents to $59.94 a barrel on the Nymex. London Brent rose 55 cents to $57.86.

Gold prices pushed further up, leading metals rally for eight consecutive session on robust world demand, inflation concerns and central-bank buying. Gold in London was fixed at $537.50 per troy ounce, up from $529.30. In Zurich the precious metal rose to $538.03 from $529.45. In Hong Kong gold climbed $12.40 to close at $535.15. Silver opened at $9.15, up from $9.

The U.S. dollar traded lower against the major currencies. In European trading the euro was quoted at $1.1883, up from $1.1815. The dollar bought 120.60 yen, down from 120.64. The British pound stood at $1.7639, up from $1.7543.