DaimlerChrysler Sells a Unit

Elena
28 Dec, 2005
New York City

Asian-Pacific markets closed mixed with the Nikkei rising sharply to hit a five-year high of 1.4% at 16,194.61 on expectations exporter issues will gain on stronger dollar. European stocks traded mostly lower at mid-day, despite positive German consumer confidence data with he French CAC being the biggest loser, down 0.2%. The Conference Board is expected to report that the index of consumer confidence rose to 101.8 in December from 98.9 in November.

U.S. MARKET AVERAGES

U.S. stock futures pointed to a higher market opening Wednesday, rebounding from yesterday’s decline when the yield on the benchmark 10-year U.S. Treasury note fell below that of the two-year note for the first time since December 2000. Stocks are seen to open in the positive ahead of data expected to show a rise in December consumer confidence and as the Treasury yield curve mostly flattened. Investors were also awaiting weekly chain store sales to get an assessment of the holiday shopping season.

Of companies in focus, J.P. Morgan upgraded Albertson's to neutral from underweight.The board of the company still backs Chief Executive Larry Johnston amid the collapse of takeover talks last week.

Celgene Corp. said the Food and Drug Administration approved its drug Revlimid, announced a stock split and said its chief executive will retire in May.

DaimlerChrysler AG agreed to sell its off-highway unit to Sweden-based private equity firm EQT for 1.6 billion euros ($1.9 billion). The unit was sold for 1 billion euros excluding assumed debt and pensions, and the automaker said the deal will increase net profit by 300 million euros.

S&P 500 futures were up 3.2 points, above fair value. Dow Jones industrial average futures rose 26 points, and Nasdaq 100 futures gained 4 points.

INTERNATIONAL MARKET NEWS

Asian-Pacific benchmarks finished mixed Wednesday with the Nikkei sharply rising to hit a five-year closing high of 1.4% at 16,194.61 on expectations that exporter issues will profit on the continuously strengthening U.S. dollar. Across the region, Hong Kong’s Hang Seng fell 0.5%, South Korea’s Kospi declined 0.4%, while Australia’s All Ordinaries advanced 0.6%.

European stocks traded mixed at mid-day, reflecting a lower close on Wall Street overnight and losses in oil majors. Upbeat consumer climate data, raising optimism in the German economy, provided support. The German DAX 30 fell 0.04%, the French CAC 40 lost 0.2%, while London’s FTSE 100 edged up 0.04%. The euro gained 0.7% to $1.1925.

OIL, METALS, CURRENCIES

Crude oil prices extended losses on expectations of mild U.S. weather. Light sweet crude for February delivery slipped 35 cents to $57.81 a barrel on the Nymex. London Brent lost 28 cents to $56.01.

European gold prices rose to a two-week high as weakening dollar increased its appeal. Gold for immediate delivery gained $3, or 0.6% to $510.90 per troy ounce.

The U.S. dollar dropped against its major counterparts in European trading. The euro was quoted at $1.1911, sharply up from $1.1832. The dollar bought 117.08 yen, down from 117.36. The British pound traded at $1.7382, up from $1.7270.

EARNINGS NEWS

Cal-Maine Foods Inc ((CALM)), egg producer, reported a Q2 loss of 3 cents a share, up from a loss of 23 cents a share a year-ago. Sales increased in Q2, compared with the same time last year. The company announced that it expects feed costs to be favorable in the months ahead. Cold, snowy weather in much of the country added to strong seasonal holiday demand.

CBRL Group Inc., ((CBRL)), restaurants and retail concepts developer, announced that same-store restaurant sales for its main Cracker Barrel Old Country Store units increased 0.9% in December. For its Logan's Roadhouse units, same-store restaurant sales rose 4.4%. The company forecasts revenue growth of 2% to 4% for the Q2, and earnings of 56 to 61 cents a share, including stock option expense of 3 to 4 cents a share, compared with the analyst view of 59 cents a share.