Oil Above $65

Elena
17 Jan, 2006
New York City

Asian-Pacific benchmarks posted heavy losses Tuesday as the Japanese authorites started a probe of Internet portal Livedoor. The Nikkei tumbled 2.8%, followed by South Korean Kospi, down 2.3%. Only Shanghai Composite gained 0.5%. European stocks were also weak, hurt by rising oil and corporate news. The German DAX 30 dropped 1.1%. Texas Regional Bancshares posted Q4 earnings rise of 46 cents a share, exceeding estimates of 44 cents.

U.S. MARKET AVERAGES

U.S. stock futures slipped Tuesday, pointing to a weaker market opening on crude oil prices over $65 a barrel and focus on earnings reports from companies like Intel Corp., International Business Machines Corp. and Yahoo Inc. On Monday U.S. markets were closed for a holiday celebrating Martin Luther Jr.

Crude prices hit a 3 1/2-month high above $65 a barrel after militants said they would broaden attacks on Nigeria's oil industry.

After the close, Intel ((INTC)), IBM ((IBM)) and Yahoo ((YHOO)) are set to report earnings that will support sentiment toward the fourth-quarter reporting season.

In economic news, data on industrial production are due out prior to the start of trading, with economists projecting a 0.5% increase for December. Capacity utilization is expected to come in at 80.6%.

Standard & Poor's 500 index futures were down 4.40 points, below fair value. Nasdaq 100 index futures were down 11 points, and Dow Jones industrial average futures down 37 points.

INTERNATIONAL MARKETS NEWS

Asian-Pacific benchmarks finished deeply in the red Tuesday, pressured by selling of Internet-related, real estate and brokerage issues. The decline started as Japan’s authorities began a probe of Internet portal Livedoor Co. The Nikkei tumbled 2.8% to 15,805.95. South Korea’s Kospi slid 2.3%, followed by Hong Kong’s Hang Seng, down 1.4%. Shanghai Composite was the only gainer with an advance of 0.5%.

European stocks declined Tuesday morning, rebounding from yesterday’s gains. Stocks fell on oil prices over $65 a barrel, mixed corporate news and heavy losses in Tokyo. The German DAX 30 slipped 1.1%, the French CAC 40 shed 0.8%, and London’s FTSE 100 fell 0.4%.

OIL, METALS, CURRENCIES

Crude oil prices climbed over $65 a barrel, reaching a 3 ½-month high on growing political tension in Nigeria and supply concerns, raised by Iran. Light sweet crude for February delivery rose $1.27 to $65.29 a barrel. London Brent February delivery rose 94 cents to $64.12 a barrel.

European gold prices retreated from 25-year highs on signals that recent gains may be overdone. In London gold traded at the fixed price of $558.05 per troy ounce, down from $561.70. In Zurich the precious metal traded at $557.75, down from $559.55. In Hong Kong gold fell $1 to close at $557.80. Silver opened at $9.16, down from $9.18.

The U.S. dollar advanced against major currencies ahead of consumer confidence and manufacturing data. The euro was quoted at $1.2110, down from $1.2121. The dollar bought 114.96 yen, up from 114.15. The British pound was quoted at $1.7681, down from $1.7758.

EARNINGS NEWS

Fifth Third Bancorp, ((FITB)), reported Q4 earnings per share were 60 cents, up from 31 cents per share for the year-ago period. Return on average assets (ROA) and return on average equity (ROE) were 1.27 % and 13.9 %, respectively, compared to 0.72 %and 7.6 % in 2004''s Q4. Earnings and balance sheet comparisons to the prior year were also impacted by the Q1 of 2005 acquisition of First National Bankshares of Florida, Inc.

M.D.C. Holdings Inc. ((MDC)), home builder, reported that Q4 net income advanced to $4.29 a share, up from $3.17 a share in the same period previous year on more homes sold at greater prices, beating analysts expectations of $3.98 a share. Total revenue, which reflects orders taken months ago, rose 29 % to $1.7 billion.

Texas Regional Bancshares, ((TRBS)), reported Q4 net income of 46 cents a share, up from 42 cents a share in the year-earlier period, topping analyst estimate of 44 cents a share. The company recorded about $898,000 in Q4 charge-offs due to the impact of Hurricane Rita, less than the provision of $2.5 million.

National City Corp., ((NCC)), banking services, reported that Q4 net income dropped to 64 cents a share, down from $1.46 a share in the same period the previous year, missing analyst estimate of 67 cents a share. The bank took $75 million in after-tax charges during the quarter. It took $132 million provision for credit losses compared to $81 million in the year-ago quarter, on higher commercial and consumer net charge-offs, as well as a $20 million provision for bankruptcy losses that haven't yet been realized.

Continental Airlines, ((CAL)), airline company, reported a narrower Q4 net loss of 53 cents a share, up from $3.16 per share in the year-ago period helped by a gain on sale of stock but hurt by almost 58% higher costs of fuel and related taxes as well as sharp competitive challenges. In the latest quarter, if not for a $106 million gain on the sale of Copa stock and charges of $21 million, the loss was $1.58 per share, topping on that basis analysts’ estimates of a loss of $1.68 per share.

U.S. Bancorp, ((USB)), banking services, reported an 8% increase in quarterly net income to 62 cents a share, compared to 56 cents a share in the year-ago period on growth in its fee-based businesses, matching analyst estimate.