Higher Opening for U.S. Indexes; ECB Holds Rates

123jump.com Staff
03 Sep, 2009
New York City

U.S. stocks are expected to open higher after the European Central Bank left its key lending rate unchanged at 1%. Companies in U.S, Asia and Europe are planning to raise at least $25 billion in the next two months. The home builder Hovnanian reports 46% decline in sales but reports a smaller loss.

[R]9:00 AM New York – U.S. stocks are expected to open higher after the European Central Bank left its key lending rate unchanged at 1%. Companies in U.S, Asia and Europe are planning to raise at least $25 billion in the next two months. The home builder Hovnanian reports 46% decline in sales but reports a smaller loss. Ciena jumps after it offered optimistic outlook.[/R]

U.S. stocks are expected to open higher as companies around the world raise capital, mergers continue and the European Central Bank left its key rate unchanged.

Companies in India, Hong Kong, China, UK, Germany and Australia are planning to raise as much as $25 billion in the next two months as investors’ appetite for risk returns.

Dainippon Acquires Sepracor for $2.6 Billion

Dainippon Sumitomo Pharma Company agreed to acquire Sepracor Inc for $2.6 billion in all cash deal. Dainippon has offered $23 a share and plans to raise $200 million in bank loans and fund the rest through its reserves.

Stronger yen has helped Japanese companies to acquire American rivals at a cheaper price. Yen has jumped 26% in the last two years.

Sepracor has a sales force of 1,200 and sells drugs for asthma, insomnia and allergic rhinitis. Dainippon plans to sell its schizophrenia treatment Lurasidone in the U.S. after the approval in 2010.

Rates on Hold in Europe

The European Central Bank left its key lending rates unchanged at 1% to keep the early economic recovery in place. Sweden also left its rate at 0.25%. Germany and France recently reported economic expansion but unemployment in the region is still rising and consumer spending is weak.

Earnings Review

Collective Brands, Inc, the shoe retailer and wholesaler said second quarter sales fell 8% to $836.3 million from $911.7 million a year ago. Net income in the quarter rose 131% to $18.7 million or 29 cents per diluted share compared to net income of $8.1 million or 13 cents per share a year ago.

Hovnanian Enterprises, Inc, a homebuilder said third quarter revenues fell 46% to $387.1 million from $716.5 million a year ago. Net loss in the quarter was $168.9 million or $2.16 per diluted share compared to net loss of $202.5 million or $2.67 per share a year ago.

HMV Group plc, an entertainment media group said total sales for the 18 weeks ended 29 August 2009 rose 4.4% and like-for-like sales fell 1.8%. Total sales in HMV & Ireland rose 12.5% and like for like sales up 1.7%. Waterstone''s total sales fell 2.6% and like-for-like sales fell 3.4%.

Pernod Ricard SA, the producer and distributor of spirits and wines said full-year sales rose 9.3% to €7.2 billion from €6.59 billion a year ago. Net profit in the full-year rose 13% to €945 million compared to net profit of €840 million a year ago.

Europe Markets Review

In London FTSE 100 Index traded higher 2.13 or 0.04% to 4,819.68, in Paris CAC 40 Index increased 3.09 or 0.09% to 3,576.22 and in Frankfurt DAX index traded higher 10.59 or 0.20 % to 5,330.43. In Zurich trading SMI decreased 8.47 or 0.14% to 6,080.77.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 65.82 or 0.64% to 10,214.64, Hang Seng index in Hong Kong increased 239.68 or 1.23% to 19,761.68 and CSI 300 index in China higher 161.04 or 5.57% to 3,051.96. ASX 200 index in Australia decreased 8.60 or 0.19% to 4,429.60. The FTSE Bursa KL Composite index in Malaysia closed higher 5.65 or 0.48% to 1,173.66.

The Kospi Index in South Korea increased 0.37 or 0.02% to close at 1,613.53. SET index in Thailand closed higher 11.42 or 1.75% to 665.54 and JSE Index in Indonesia increased 36.32 or 1.59% to 2,322.25. The Sensex index in India decreased 69.13 or 0.45% to 15,398.33.

ASX 200 Index Movers

Straits Resources Ltd led the decliners in the ASX 200 index of 13.1% followed by losses in Transpacific Industries Group Ltd of 6.1%, in Fleetwood Corporation Limited of 6.1%, in Pacific Brands Ltd of 5.3% and in Astro Japan Property Trust of 4.4%.

St Barbara Limited led gainers in the ASX 200 index with a rise of 20.0% followed by gains in Sino Gold Mining Ltd of 10.6%, in Murchison Metals Limited of 8.3% and in Newcrest Mining Limited of 7.6%.

Nikkei 200 Average Movers

Pioneer Corp led the decliners in the Nikkei 225 index of 5.8% followed by losses in Isuzu Motors Ltd of 5.0%, in Hitachi Zosen Corp of 4.1%, in CSK Holdings Corporation of 3.9% and in Hino Motors Ltd of 3.8%.

Alps Electric Co Ltd led gainers in the Nikkei 225 index with a rise of 7.8% followed by gains in Sumitomo Metal Mining Co Ltd of 5.5%, in J Front Retailing Co Ltd of 5.0% and in Dowa Holdings Co Ltd of 4.0%.