Oil Piles up, Gasoline down

Elena
29 Dec, 2001
New York City

Stocks edged up at the start of Thursday trading, but the major averages came off intraday highs with little news to boost their way up. Traders largely ignored initial jobless claims data. The Labor Department said initial jobless claims in the week ended Dec 24 rose to 322,000 from 319,000 last week, vs. estimates of a rise of 325,000. Weekly petroleum report is also expected with energy prices down, making effort to rally the market.

U.S. MARKET AVERAGES

U.S. stock averages started Thursday session slightly higher on economic data and volatile energy prices clamping down on attempts to rally the market. Stocks were also supported by a multi-billion deal in which Hilton Hotels Corp. is said to acquire Hilton Group, a move that would reunite the Hilton brands for the first time in more than four decades.

Energy prices slipped ahead of the weekly inventory data, following yesterday’s rise in crude futures on speculation that OPEC may consider output cuts.

Investors paid little respect to the Labor Department's report on unemployment. First-time jobless claims rose by an expected 4,000 last week to a seasonally adjusted 322,000.

The airline sector sharply moved to the upside, rebounding from Wednesday's slide. Insurance and chemical stocks also advanced with each group showing a gain of less than 1%.

Energy stocks continued trading in a volatile fashion, moving modestly lower from yesterday’s gains. Networking and defense stocks also posted modest losses in early going.

In the first hour of trading, the Dow Jones industrial average rose 20.03, or 0.19%. The Standard & Poor's 500 index added 2.25, or 0.18%, and the Nasdaq composite index gained 2.98, or 0.13%.

Bonds were little changed, with the yield on the 10-year Treasury note steady at 4.37% from late Wednesday.

MOVERS AND SHAKERS

Warner Music Group Corp ((WMG)) plans to pay a quarterly dividend of 13 cents a share, or $19.3 million in total on Feb. 14. Warner Music previously announced that it will pay regular quarterly dividends totaling up to $80 million a year. The stock rose 1%.

Christopher & Banks Corp. ((CBK)), the Minneapolis women's-clothing retailer, reported sales for the four weeks ended Dec. 24 rose 9% to $60.2 million from $55.1 million in the year-earlier period. December same-store sales rose 2%. During the Thanksgiving-through-Christmas period, CBK said, gift-card sales increased to 11 million from 9 million, indicating a 22% increase. The company’s shares advanced 1.2%

ECONOMIC NEWS

Crude oil inventories recorded another build in the latest week, according to government statistics released Thursday, though the advance was far more modest than in the previous week. Stocks of gasoline and distillate fuel oil declined during the period.

The Department of Energy's Energy Information Administration revealed that crude oil inventories ticked up by 100,000 barrels for the week ended December 23, climbing to 322.6 million barrels from the prior week's level of 322.5 million barrels. This followed an advance of 1.3 million barrels in the previous week. Oil inventories were 12.6% higher than their levels of the same time last year.

Gasoline inventories posted a week-over-week decline of 1.2 million barrels, the government said, compared to the previous week's slide of 300,000 barrels. Gasoline stocks were 6% below their levels of last year. Inventories of distillate fuel oil fell by 900,000 barrels in the most recent week.

The National Associations of Realtors released its report on existing home sales in the month of November on Thursday, showing that sales fell slightly more than economist had been expecting.

The National Associations of Realtors released its report on existing home sales in the month of November on Thursday, showing that sales fell slightly more than economist had been expecting.

The report showed that existing home sales fell to a seasonally adjusted annual rate of 6.97 million units in November from a 7.09 million unit rate in October. Economists had been expecting sales to fall to a 7.00 million unit rate.

The report also showed that the national median existing-home price came in at $215,000 in November, up 13.2 percent year-over-year.

Additionally, total housing inventory levels rose 1.2 percent to 2.90 million existing homes for sale at the end of November, a 5-month supply at the current sales pace.

Thursday morning, the Department of Labor released its report on initial jobless claims in the week ended December 24. The report showed that jobless claims rose slightly less than economists had expected.

Thursday morning, the Department of Labor released its report on initial jobless claims in the week ended December 24. The report showed that jobless claims rose slightly less than economists had expected.

The Labor Dept. said that jobless claims rose to 322,000 from the previous week's revised figure of 319,000. Economists had been expecting claims to rise to 325,000 compared to the 318,000 originally reported for the previous week.

The report also showed that the less volatile four-week moving average edged up to 325,000 from the previous week's revised average of 324,750. Additionally, continuing claims rose to 2.715 million in the week ended December 17 from the preceding week's revised level of 2.630 million.

Some closely watched economic data is also due to be released after the start of trading, with the National Association of Realtors set to release its report on existing home sales in November, while the NAPM-Chicago is due to release its purchasing managers index.

INTERNATIONAL MARKET NEWS

Asian-Pacific benchmarks rallied on Thursday with the Nikkei in the lead, up 0.9%, hitting a multi-year high of 16,344.20 on hectic buying in expectations of strong corporate profit and robust economic growth across the region next year. South Korea’s Kospi rose 0.8%, Shanghai Composite surged 1.1%, and Taipei’s Weighted index advanced 0.8%. Hong Kong was the sole decliner, down 0.4%.

European stocks slightly advanced at mid-day, supported by resource stocks and gains from the leading German insurers Allianz and Munich Re which posted detailed earnings outlooks. The German DAX 30 gained 0.3%, followed by the French CAC 40, up 0.3%, and London’s FTSE 100 rising 0.3%.

OIL, METALS, CURRENCIES

Crude oil prices slipped ahead of oil inventory report and amid expectations that OPEC may cut production next year. Light sweet crude for February delivery lost 25 cents to $59.57 a barrel on the Nymex. London Brent slid 27 cents to $57.37.

European gold prices neared a two-week high on speculations that the central banks may buy more of the precious metal to diversify their reserve. In London gold rose to $517 per troy ounce, up from $515.20. In Zurich the precious metal advanced to $517.03 from $515.75. In Hong Kong gold gained $8.05 to close at $516.90. Silver traded unchanged at $8.59.

The U.S. dollar steadied against its major counterparts ahead of economic data. The euro was quoted at $1.1845, up from $1.1836. The dollar bought 117.90 yen, up from 117.83. The British pound traded at $1.7199, up from $1.7160.

EARNINGS NEWS

Luby's Inc. ((LUB)), cafeteria-style restaurants operator, posted a Q1 profit of 8 cents a share, up from a loss of 5 cents a share a year earlier, beating analyst estimate of 3 cents a share. Sales advanced 6.9% in Q1, compared with the same time last year, with same-store sales advancing 6.9% in the quarter. The company announced that its sales in Q1 were hurt by Hurricane Rita, which resulted in a loss of about 236 store days of operations.

CORPORATE NEWS

Hilton Hotels Corp is expected to announce that it bought the international hotels of Hilton Group for around $6 billion. Both companies had previously confirmed those talks and a deal may lead to further consolidation talk in the lodging industry, with Starwood Hotels & Resorts Worldwide Inc. reportedly a suitor for InterContinental Hotels Group PLC.

InterDigital Communications Corp. said late Wednesday that a federal judge confirmed an award rendered by a tribunal against mobile phone making giant Nokia Corp. for between $232 million and $252 million.