Retailers Report Healthy Sales

Elena
02 Feb, 2006
New York City

Asian markets ended mostly up. The leading gainer was the Nikkei rising 1.4%, while the biggest decliner was Thailand SET, down 2.1%. European stocks erased early gains to turn lower at mid-day with the French CAC 40 falling deepest to 0.4%. Starbucks reported Q1 earnings rise of 20% with a 10% rise in same-store sales, beating esimates. United shares are trading at $41 in pre-market trading. Shares were issued to unsecured creditors at $15, and begin trading today.

U.S. MARKET AVERAGES

U.S. stock futures traded weak, predicting a lower opening ahead of retailers January sales reports and economic data, expected to show a slowdown in productivity growth. On Wednesday stock averages advanced as investors shrugged off disappointing earnings news from Google and focused attention on positive quarterly report from Dow component Boeing and domestic auto sales growth.

Same-store sales will be in the spotlight Thursday with sales seen to rise by 4% in January. However, Wall Street trading is expected to be cautious ahead of key jobs release data, due out Friday.

Wal-Mart Stores reported that January same-store sales climbed 4.7%, marking the highest monthly increase of the fiscal year. Total sales for the month grew 14.5% to $22.675 billion. The company predicted 2%-4% comparable sales growth in February.

In earnings news, Starbucks reported a 20% rise in Q1 earnings, topping forecasts. It also raised its earnings outlook after reporting a 10% rise in January same-store sales.

Tyco International Ltd. ((TYC)) reported that Q1 net income fell 22% on 1.1% higher sales, missing estimates by a penny a share.

Whirlpool Corp. ((WHR)) announced better-than-expected Q4 profit of $1.83 a share on 9% sales growth, beating estimates of $1.70. The company raised 2006 earnings to $7-$7.25 a share.

Cable TV operator Comcast Corp. ((CMCSA)) posted a 69% drop in quarterly profit. The board of directors approved an additional $5 billion stock buyback program

Dow Jones futures were recently down 38 points, S&P 500 futures fell 4.3 points, and Nasdaq 100 futures were off 6.5 points.

INTERNATIONAL MARKETS NEWS

Asian-Pacific benchmarks closed largely higher, supported by solid Wall Street gains and strengthening dollar after the interest rate rise which is favorable for the Asian exporter-related issues. The Nikkei soared 1.4% to 16,710.55. Among other regional markets Singapore Straits Times rose 0.45%, while Thailand SET dropped 2.1% and South Korea’s Kospi declined 0.1%. The dollar bought 118.24 yen.

European stocks turned weak at mid-day dealings as early gains on upbeat news from Alcatel and Rio Tinto were erased by losses in the oil sector and slightly disappointing quarterly results from Royal Deutsch Shell. The German DAX 30 lost 0.26%, the French CAC 40 declined 0.4%, and London’s FTSE 100 slipped 0.2%.

OIL, METALS, CURRENCIES

Crude oil declined, hovering above $66 a barrel on growing tension over the nuclear program of Iran. Light sweet crude for March delivery fell 28 cents to $66.28 a barrel. London Brent lost 53 cents to $64.50.

European gold prices hit a 25-year high on oil rise and inflation worries. In London gold traded at the fixed price of $571.85 bid per troy ounce, up from $565.30. In Zurich the precious metal traded at $571.10, up from $566.20. In Hong Kong gold rose $4.95 to close at $572. Silver opened at $9.83, up from $9.70.

The U.S. dollar turned mixed against other major currencies. The euro was quoted at $1.2069, up from $1.2057. The dollar bought 118.40 yen, up from 117.94. The British pound stood at $1.7739, up from $1.7732.