Credit Suisse Drops 7%

Elena
15 Feb, 2006
New York City

Asian-Pacific benchmarks closed broadly down ahead of Ben Bernanke''s inaugural address to the Congress. South Korean Kospi slid 1.8% and the Nikkei dropped 1.6%. European averages pushed lower at mid-day, led by the CAC 40, down 0.4%. Credit Suisse shares dropped 7% after the banking giant reported Q4 profit rise of 15% on 10% revenue growth, but disappointed with its banking performance and rising costs.

U.S. MARKET AVERAGES

U.S. stock futures were sitting just below the flat line, pointing to a slightly lower opening after a sharp advance on Tuesday. Investors assumed cautious positions ahead of the first appearance of Ben Bernanke as Fed Reserve Chairman.

The new Fed chief is expected to offer an upbeat assessment of the U.S. economy when he testifies before the House Financial Services Committee at 10 a.m. Signals for interest-rate hikes are also anticipated.

Wednesday's is heavy with other news and economic data, with an earnings report due from tech bellwether Hewlett-Packard, a U.S. oil inventory report and other indicators.

In corporate news, the financial sector may draw attention as Merrill Lynch & Co. Inc. and BlackRock Inc. are expected to reveal the terms of their money management alliance.

United Technologies Corp.'s Pratt & Whitney jet engines will announce plans to produce spare parts for General Electric’s best selling engine.

Standard & Poor''s 500 futures were down 1.9 points, below fair value. Dow Jones industrial average futures were down 14 points, and Nasdaq 100 futures were down 1.5 points.

INTERNATIONAL MARKETS NEWS

Asian-Pacific benchmarks closed mostly in the red on cautiousness ahead of the inaugural public address of new U.S. Fed Reserve Chairman Ben Bernanke before the Congress today. South Korea’s Kospi was the sharpest decliner with a loss of 1.8%. The Nikkei dropped 1.6%, Singapore Straits Times fell 0.8%, while Shanghai was the only index in the positive with a gain of 0.5%.

European stocks turned weak at mid-day dealings, hurt by concerns about climbing costs from banks Credit Suisse and BNP Paribas. The German DAX 30 lost 0.2%, the French CAC 40 slipped 0.4%, and London’s FTSE 100 declined 0.2%.

OIL, METALS, CURRENCIES

Crude oil prices inched up with market sentiment remaining bearish ahead of the weekly petroleum report, expected to show a continuing growth in fuel stocks. Light sweet crude for March delivery added 21 cents to $59.78 a barrel. Gasoline gained 2 cents to $1.4050 a gallon, while heating oil added over 1 cent to $1.6225. Natural gas rose 7 cents to $7.185 per 1,000 cubic feet. London Brent gained 14 cents to $59.71.

European gold resumed the upward momentum Wednesday. In London gold traded at the fixed price of $544.30 bid per troy ounce from $543.500. In Zurich the precious metal traded at $544, down from $545.20. In Hong Kong gold rose $6.50 to close at $545.30. Silver opened at 9.27, up from $9.23.

The U.S. dollar traded mixed against other major currencies. The euro traded unchanged at $1.1911. The dollar bought 117.61 yen, up from $117.43. The British pound stood at $1.7385, up from $1.7351.

EARNINGS NEWS

Myers Industries, ((MYE)), automotive repair company, reported Q4 net income of 25 cents a share, up 25% from 20 cents a share in the year-earlier period on 5% revenue growth, topping analyst estimate of 18 cents a share.

Bluelinx Holdings Inc., ((BXC)), building products distributor, reported Q4 net income of 48 cents a shareswinging from a year-earlier loss of 9 cents a share on 10% revenue growth, topping analysts’ forecasts of 46 cents a share.

Ceridian Corp, ((CEN)), provider of information services, reported Q4 earnings of 32 cents a share, up from a profit of 7 cents a share a year-earlier on revenue growth, beating analyst estimate of 25 cents a share. The company said that the strong quarter was due to its penetration into new markets, new products, and heavy demand for its Comdata credit, debt, and stored value payment services.

Jones Apparel Group Inc, ((JNY)), apparel manufacturer, reported net income of 48 cents a share, up from 28 cents a share in the year earlier quarter on revenue growth, beating analyst estimate for a profit of 45 cents a share. Results were given a boost by better than expected results in its licensed businesses and Gloria Vanderbilt moderate apparel business, as well as the Barneys retail stores.

Alfa Corp, ((ALFA), insurance company, reported Q4 earnings of 29 cents a share, a penny up from 28 cents a share in the same period the previous year on 17% revenue growth. If not for investments gains, earnings were 28 cents a share, missing analysts’ expectations for earnings of 31 cents a share.

Caremark Rx Inc, ((CMX)), pharmaceutical company, reported that Q4 net income advanced 41.7% to 64 cents a share on 4.4% revenue growth. If not for integration expenses and adjustments to income tax provisions, adjusted earnings were 55 cents a share, in-line with analysts’ estimates. The company stated its results were helped by strong growth in generic dispensing rates.

RailAmerica Inc, ((RRA)), railroad company, reported Q4 net income of 20 cents a share, up from 11 cents a share in the year-earlier period on 9.1% revenue growth. Earnings from continuing operations were 24 cents a share, beating on that basis analyst estimate of 23 cents a share.

Cimarex Energy Co, ((XEC)), oil and gas company, reported Q4 net income of $1.98 a share, up vs. $1.12 a share in the same period the previous year on revenue growth, topping analyst estimate of $1.52 a share. There were roughly double the average shares outstanding in Q4, following Cimarex''s 2005 acquisition of Magnum Hunter Resources completed in June. Revenue reached 429.5 million from $142.6 million. Q4 oil and gas production volumes rose 87%, in view of Magnum Hunter contributions and continued positive drilling results, partially offset by hurricane-related disruptions.