Oil and Market Gyrate Together

06 Apr, 2005
New York City

Crude oil prices traded up and down all day. Department of Energy reported that supply rose 2.4 million barrel latest week and stood at 317 million barrels and gasoline inventories fell 2.1 million barrel to 212.3 million barrels.

Crude oil prices traded up and down all day. Department of Energy reported that supply rose 2.4 million barrel latest week and stood at 317 million barrels and gasoline inventories fell 2.1 million barrel to 212.3 million barrels.

According National Petrochemical and Refiner's Association, there has been little net increase in U.S. refining capacity for the past three years, and the last new U.S. refinery was built in 1976. Currently, there are 149 U.S. refineries with a combined capacity of 16.8 million barrels a day, down from the high in 1981 of 325 refineries with a capacity of 18.6 million barrels a day. It is increasingly difficult to build new facilities to increase production. It is widely expected that this summer the gasoline prices will trend higher at the pump stations.


The stocks of Anheuser-Bush lost 3.8% after the company said its 2005 earnings will grow in low single digits. The stock has long been favored on Wall street for its steady and consistent earnings.
Recently consumers are favoring more and more distilled spirits and wine and as the company has to fight for market share, the earnings have been not as consistent.

Hamburger chain operator Wendy's International Inc forecasted a lower first-quarter profit on account of higher fresh beef costs. First-quarter earnings are expected to be lower than restated 42 cents. However, the company supported the full year forecast of earnings between $2.17 and $2.23.

The shares of Research in Motion recovered, after falling 2% in the early trading, on account of lower sales report. For the fourth quarter, the company reported $405 million and a loss of $2.6 million. Without the litigation charges of $294 million and patent and tax recovery charge of $151.6 million, adjusted earnings for the quarter were $140.1 million or 71 cents. Analysts were looking for higher revenue of $430 million.

Siebel systems reported that due to acquisition charges fourth quarter will result in a loss of $7 to $9 million. The stock lost more than 10%. At least two brokers downgraded the stock.

Autodesk raised 2006 year earnings guidance from $1.05 - $1.10 to $1.10-$1.15 excluding stock option expenses. During the investors day talk, company forecasted the first quarter earnings of 27 to 29 cents and revenue of $340 and $350 million.

Late yesterday, Cablevision announced that it has bid for the assets of bankrupt cable company Adelphia for $16.4 billion. What surprised the market was that the company is bidding cash and does not intend to partner with other financial institutions or private equity funds for the bid. The company shares traded 3.8% lower.


Shares of Fannie and Freddie came under fresh criticism, among others, from Chairman Greenspan. He wants Congress to limit the portfolio sizes of these agencies and said that better regulation alone will not be enough.