Apple and AMD Advance

123jump.com Staff
10 Jan, 2006
New York City

Market averages were mostly in mild decline but Dow managed to close above 11,000 for the second day in a row. Dow, S&P and Nasdaq traded near four-year high. Apple share advanced 6% on new products release, 14 million iPod unit sales and better-than-expected revenue. AMD advanced on analyst upgrade and hope that the company meeting with Dell will lead selection of its chips for Dell computers.

U.S. MARKET AVERAGES

Market averages did not register a move but home builders, Home Depot, Apple Computer and healthcare stocks did move.

Apple Computer Inc at Macworld Expo announced that first quarter revenue reached $5.7 billion on iPod sales growth of 300% and Macintosh computer sales crossed one million units for the fifth quarter in a row. Apple sold 14 million iPod music players and 1.25 million and attracted 26 million visitors to its stores which generated $1 billion in sales for the first time, Chief Executive Officer Steve Jobs said at the gathering in San Francisco today. Apple Computer stock jumped 6% as Mr. Jobs spoke at the gathering.

General Motors after rising 7% yesterday lost 1.36% today. Aide to Kerkorian said that company should cut dividend and salaries of executives. GM also announced price cuts on most of its 2006 models. Detroit is hosting the annual auto show and talks of problems at domestic auto makers are dominating the agenda of foreign visitors.

Health-care stocks declined as drug makers, HMOs and assisted living service providers declined. Guidant shares declined for most of the day but closed up 39 cents.

Material stocks came under heavy pressure as Phelps Dodge ((PD)) lowered its revenue and earnings outlook for the quarter on higher copper prices and lower profit from Alcoa ((AA)) also put the sector in negative spotlight. Phelps Dodge lost 5% at close but tumbled 11% during the day.

Home Depot proposed $3.2 billion merger with Hughes Supply ((HUG)). Hughes, located in Orlando, Florida distributes construction, repair and maintenance supplies to tradesmen. Home Depot ((HD)) was the largest percentage gainer in Dow Industrial Average up 2.4% and Hughes gained 18.3% at close.

Semiconductor stocks advanced led by Advanced Micro Devices. The AMD stock has gained 5% on analyst upgrade and hope that Dell will select company chips for its line of computers. The stock has gained more than 100% in 52 weeks.

MOVERS AND SHAKERS

Planar Systems ((PLNR)), flat-panel-display-systems maker, raised its Q4 sales and earnings forecast on higher-than-expected sales of some higher margin display products in its industrial and medical divisions. The company expects revenue of $56 million to $57 million and earnings of 8 cents to 10 cents a share. The company’s shares climbed 23.8%.

Home Depot Inc ((HD)) agreed to buy Hughes Supply Inc., a distributor of construction, repair and maintenance products, for $3.47 billion, or $46.50 a share, assuming $285 million in debt. The stock rose 2.5%.

Bell Microproducts Inc ((BELM)) , provider of semiconductors, computer platforms, peripherals, storage products, as well as tech services, expects to report a fourth-quarter loss of 23 cents to 30 cents a basic share. Fourth-quarter adjusted net should come in at $1.8 million to $2.7 million, or 6 cents to 9 cents a share, lower than earlier projections of 14 cents to 18 cents. Revenue was around $845 million up, 5% from $808 million. The stock dropped 11.7%.

Endo Pharmaceuticals Holdings Inc ((ENDP)) forecast 2006 earnings of $1.75 to $1.80 a share, excluding some items, on sales of $860 million to $880 million. Analysts forecast 2006 earnings of $1.65 to $1.95 a share on sales of $820 million. The stock fell 4.4%.

ECONOMIC NEWS

The Department of Commerce released its report on wholesale inventories in the month of November on Tuesday, showing that inventories rose slightly less than economists had been expecting.

The report showed that wholesale inventories rose 0.4 percent in November following a 0.2 percent increase in October. Economists had been expecting inventories to increase by about 0.5 percent.

The increase was partly due to a 0.6 percent increase in inventories of durable goods, which reflected a 1.5 percent increase in inventories of machinery, equipment, and supplies. Inventories of non-durable goods rose 0.1 percent in November.

The report also showed that wholesale sales fell 0.7 percent in November after increasing by 0.9 percent in October. The decrease reflected a 0.5 percent drop in sales of durable goods and a 1.0 percent drop in sales of non-durable goods.

The Commerce Dept. added that the inventories-to-sales ratio edged up to 1.15 in November from 1.14 in October. The ratio came in at 1.18 in November of 2004.

INTERNATIONAL MARKETS NEWS

Most Asian-Pacific benchmarks lost ground Tuesday, posting heavy losses on worries that recent rally may have gone too far, especially currency-rate gains with exporter issues benefiting from them. The decliners were led by The Nikkei which tumbled 1.9% to 16,124.35, followed by South Korea’s Kospi, down 0.9%, and Taiwan’s Weighted index, down 0.5%. China’s Shanghai Composite and Hong Kong’s Hang Seng reversed from recent weakness to finish higher by 0.4% each.

European stocks finished in the red with investors selling sensitive stocks like insurers after the Dow Jones Industrial average crossed the 11,000 level for he first time in four years and a half. The German DAX 30 lost 0.7%, the French CAC 40 slipped 0.3%, and London’s FTSE 100 declined 0.75%.

OIL, METALS, CURRENCIES

Crude oil prices advanced on worries that giant oil-producer Iran will be pressured by Western countries in connection with nuclear fuel. Light sweet crude for February delivery lost 13 cents to $63.37 a barrel. Gasoline slightly fell to $1.766 a gallon. Heating oil traded up to $1.7379. Natural gas added 2 cents to $9.336 per 1,000 cubic feet. London Brent rose 49 cents to $62.50.

European gold prices retreated from 25-year highs in early Tuesday trading when gold hit $553 per troy ounce. In London gold closed at $541.10 per troy ounce, down from $541.50. In Zurich the precious metal advanced to $540.85 from $541.55. In Hong Kong gold climbed $13.20 to close at $542. In New York gold closed down $4.80 to $545.80 per ounce silver was down 26 cents and copper was up one cent.

The U.S. dollar traded mixed against major currencies. The euro was quoted at $1.2070, down from $1.2083. The dollar bought 114.34 yen, down from 114.35. The British pound traded at $1.7653, up from $1.7645.

EARNINGS NEWS

Guidant Corp. ((GDT)), medical device manufacturer, announced that its Q4 sales would fall by 15% in comparison with the year-ago period. Quarterly defibrillator sales in the U.S. and worldwide would decline 23% and 19%, though the sales level remained above Guidant''s previous outlook.

AmerisourceBergen Corp. ((ABC)), pharmaceutical services company expects Q1 earnings of 37 cents to 43 cents per share, in line with the analyst estimate of 40 cents per share. The company increased its expectations for fiscal-year revenue growth, but backed its prior profit outlook for Q1 and full year. The company expects Q1 revenue growth of 10% to 11 %, due to greater sales to its larger customers.

[Alcoa Inc. ((AA)), aluminum producer, reported a 16 % decline in its Q4 profit, or 26 cents per share, down from 30 cents per share in the year-ago period, missing analysts’ projections of 37 cents per share as the company was racked by setbacks from hurricane-related refinery slowdowns to restructuring costs. Earnings from continuing operations were 24 cents per share.

SUPERVALU INC. ((SVU)), grocery company, reported record Q3 results Net sales amounted to $4.7 billion up from $4.6 billion last year, earnings per share were 53 cents compared to 46 cents in the year-ago period. Q3 results include net after tax charges of approximately 4 cents per share related to growth initiatives and costs related to terminated acquisition activities. Last year''s Q3 results include net after tax restructure and other charges of 9 cents per share primarily related to increased liabilities associated with employee benefit related costs from previously exited distribution facilities, as well as changes in estimates on exited real estate. Q3 retail net sales were $2.5 billion, a 1.9 % increase in comparison with last year''s Q3. Comparable store sales growth for the quarter was negative 0.9 %, with positive comparable store sales at company-operated Save-A-Lot stores. Reported retail operating earnings for Q3 were a record $104.5 million compared to $101.3 million in last year''s Q3.

Tiffany & Co ((TIF)), jeweler, reported that its same-store sales for the holiday period rose 6% in the U.S. and 7% in Japan. Net sales for the same period advanced 6%. On a constant currency basis, net sales increased 9% and worldwide same-store sales increased 6%. The company expects its earnings for 2005 to be in the range of $1.60 to $1.62 a share, slightly missing Analysts’ estimate of $1.64 a share for the year.

Icon ((ICLR)), clinical research company, reported that Q2 profit advanced 20.5% to 49 cents a share on an 11% increase in net revenue. The company announced that it raised its Q2 operating profit margin to 10.2% from 8.8% in the comparable period last year.