DuPont Cuts Outlook

Elena
11 Jan, 2006
New York City

Asian-Pacific markets closed mostly strong on upbeat economic data from China with the Nikkei in the lead, rising 1.5% to 16.363.59. Among the losers, China Shanghai Composite dropped 0.8% and South Korean Kospi dropped 0.2%. European shares advanced at mid-day supported by merger-and-acquisition activity, led by the DAX 30, up 0.6%.

U.S. MARKET AVERAGES

U.S. stock futures pointed to a positive opening, following a stock drop on profit taking Tuesday morning, recovery at mid-day and flat close. Stock averages looked to extend recent gains, although Genentech may see pressure after sales of a key drug came in below consensus forecasts.

The broader stock futures erased most of their gains Wednesday after Dow Component DuPont lowered its Q4 guidance. A downgrade on Yahoo to neutral from buy pushed Nasdaq 100 futures down.

There are no significant economic reports due out on Wednesday and very few significant earnings reports are expected. The government will release its weekly petroleum inventory report, which could have a substantial impact on the energy market.

UBS increased its price target on Apple Computer to $100 from $86 and kept a buy rating on the stock, citing Apple's revenue guidance.

Deutsche Bank downgraded the world's largest mobile phone maker Nokia Corp., to hold from buy. The bank upgraded its 2006 handset market forecast to show a 10% volume rise from a previous view of 7%. Deutsche raised Nokia's target price to 16 euros from 15 euros.

Markets will be looking to see whether Johnson & Johnson comes back with a higher offer for Guidant.

S&P 500 futures rose 2.2 points at 1,298.30 and Nasdaq 100 futures rose 2.5 points at 1,762.5 points.

INTERNATIONAL MARKETS NEWS

Asian-Pacific benchmarks closed largely higher, lifted by upbeat data indicating a robust growth in China’s trade surplus, which is a favorable factor for the inter-regional trade and development. The gainers were led by the Nikkei, climbing 1.5% to 16,363.59, followed by Hong Kong’s Hang Seng, up 0.5% and Taiwan’s Weighted index which reversed from losses to gain 0.4%. China’s Shanghai and South Korea’s Kospi dropped, 0.8% and 0.2% respectively.

European stocks advanced Wednesday morning on U.S. markets recovery at close and merger-and-acquisitions activity. The German DAX 30 climbed 0.6%, the French CAC 40 rose 0.5%, and London’s FTSE 100 gained 0.4%.

OIL, METALS, CURRENCIES

Crude oil prices steadied ahead of oil inventories report. Light sweet crude for February delivery gained 14 cents to $63.51 a barrel. Gasoline slightly fell to $1.7306 a gallon. Heating oil traded slightly down at $1.7305. Natural gas added 7 cents to $9.405 per 1,000 cubic feet. London Brent traded unchanged at $61.92.

European gold prices advanced. On Tuesday gold hit a 25-year high of $553 per troy ounce. In London gold opened at $542.25 per troy ounce, up from $541.10. In Zurich the precious metal advanced to $541.75 from $540.85. In Hong Kong gold dropped $6.10 to close at $540.40. Silver traded at $8.90, down from $8.99.

The U.S. dollar gained ground against most major currencies. The euro was quoted at $1.2070, down from $1.2071. The dollar bought 114.51 yen, up from 114.36. The British pound traded at $1.7653, up from $1.7651.

EARNINGS NEWS

Material Sciences Corp, ((MSC)), material-based solutions for acoustical applications company, posted Q3 net earnings of 15 cents a share, down 7.9% vs. 17 cents a share in the same time last year despite revenue growth. Gross margin dropped 0.7%.

Genentech Inc, ((DNA)), biotherapeutics manufacturer, reported that its Q4 net income was 31 cents a share, 64% higher than the 19 cents a share, earned in the same period a year ago. Sales were $1.9 billion vs. last year''s $1.3 billion. Non-GAAP earnings of 34 cents a share matched the analysts’ estimate Sales, however, exceeded the $1.85 billion forecast by analysts.

International DisplayWorks Inc., ((IDWK)), maker of LCDs for modules, cell phones and other wireless devices, reported Q4 net income of a penny a share down from 2 cents a share in the same time last year despite higher sales because of costs growth. Sales amounted to $24 million, up 68 percent from last year''s same period result. The company missed the analysts’ expectations of 4 cents a share for the period.

Infosys Technologies, ((INFY)), technical and system software company, reported that Q3 earnings per share rose to 53 cents, up from 42 cents per share in the year-ago period on 32.2% revenue growth.