Myogen Slides 10%

Elena
07 Mar, 2006
New York City

Stocks slightly recovered from the early drop on rising bond yields, inflation worries and losses in the tech sector. On Tuesday morning the yield on the 10-year Treasury note rose to 4.77%. Myogen slipped 10% after it announced a loss for 2005. The company also revealed a licensing deal with GlaxoSmithKline. Sunrise Senior Living was a notable gainer after posting Q4 earnings increase and lifted 2006 earnings guidance. The stock jumped 10%.

10:30AM Market Movers-Declining stocks led advancers by more than 3 to 1 on the Nymex
Stocks slightly recovered from the initial drop. The Dow moved into the positive territory, rising 23 points, supported by some of its components, such as Honeywell International and Procter & Gamble Co. The Nasdaq posted a loss of about 10 points, or 0.4%.

Sunrise Senior Living ((SRZ)) was the most conspicuous gainer after posting Q4 earnings increase and raised its 2006 earnings guidance. Shares of the provider of senior living services jumped 10%. Krispy Krème Doughnuts ((KKD)) climbed 17.4% after it said it hired Daryl G. Brewster as the new president and chief executive. Myogen ((MYOG)) was one of the most notable losers, falling 10% after it revealed a licensing deal with GlaxoSmithKline, but it also announced a loss for 2005.

9:45AM Market Tone-Stocks started lower mostly on rising bond yields
Stocks opened lower on continuous worries about interest-rate hikes and further rise in bond yields. The yield on the 10-year Treasury note rose to 4.77% from 4.74% late Monday. The worst performers in early going were tech stocks hurt by the disappointing guidance from Texas Instruments. The stock led decliners, falling 4.5%. The semiconductor sector fell 1.9%. The gold sector and biotech group also showed weakness. The HMO sector rose nearly 1% to stand out among gainers. Chemical and airline stocks also moved to the upside.

In the first hour of trading, the Dow Jones industrial average fell 21.21, or 0.19%. The Standard & Poor''s 500 index fell 4.25, or 0.33%, and the Nasdaq composite index fell 13.03, or 0.57%.

Economic News The Department of Labor released its revised report on productivity in the fourth quarter. The report showed that the drop in fourth quarter productivity was slightly smaller than previously reported. The report said productivity fell 0.5 percent in the fourth quarter, slightly less than the 0.6 percent decline reported previously. Economists had expected a more significant revision to a decline of 0.1 percent.

The drop in productivity in the fourth quarter marked the first decline since the first quarter of 2001, when productivity fell 0.6 percent. In the third quarter of 2005, productivity increased by 4.5 percent. The Labor Dept. noted that the decline in productivity in the fourth quarter came as output increased by 1.5 percent while hours rose by 2.0 percent. The report also showed that the growth in unit labor costs in the fourth quarter was revised down to 3.3 percent from the previously reported 3.5 percent growth. Economists had expected the growth in unit labor costs to be revised down to 3.0 percent.

9:00AM – TI Earnings guidance indicates lower tech stocks opening.
U.S. stocks futures pointed to a negative opening, hurt by weakness in tech stocks. A number of technology firms released guidance late Monday including technology bellwether Texas Instruments Inc which posted a disappointing forecast and raised concerns about the outlook for corporate growth. Texas Instruments ((TXN)), top supplier of mobile phone chips, lifted the lower end of its profit forecast range but failed to deliver the strong outlook analysts had expected. The stock dropped 3% in shares after hours on Monday.

Fairchild Semiconductor ((FCS)) raised its guidance for Q1. The company expects to increase its revenue by about 9% from previously predicted 5%-7% growth on strong order rates. The company also reported that it has enough demand scheduled to ship within the quarter to achieve its new, higher sales guidance.

8:00AM Asian Markets close reflected weakness led by 2.1% decline in Korea.
Asian-Pacific benchmarks finished in the red, reflecting weak close on Wall Street and cautiousness ahead of Bank of Japan’s meeting on Wednesday. The Nikkei slipped 1.1% on speculations the BOJ could tighten its ultra-easy monetary policy. Semiconductor-linked stocks declined on disappointing earnings from U.S. technology company Texas Instruments. Chip maker Elpida Memory fell 6%. Softbank slid 8.5% on reports that the Internet service company is in deal talks with British mobile-phone operator Vodafone. South Korea’s Kospi tumbled 2.1%, China Shanghai Composite plunged 2.3% on profit taking by institutional investors, Hong Kong’s Hang Seng fell 1.3%, and Taiwan Weighted index dropped 1.2% on weakness in banking and tech stocks.

European stocks traded lower at mid-day dealings, hurt by sharp U.S. markets losses and weak resource stocks including BHP Billiton, down 3.7% and Rio Tinto, down 3%. However, automaker Volkswagen AG bucked the lower trend, rising 1.1%. The German DAX 30 lost 0.8%, the French CAC 40 dropped 0.7%, and London FTSE 100 slipped 0.9%.

Crude oil prices advanced ahead of OPEC meeting to discuss output levels. Light sweet crude April delivery gained 24 cents to $62.65 a barrel in electronic trading on the Nymex. Gasoline lost 1 cent to $1.6505, while heating oil was marginally up to $1.7598. Natural gas rose 3 cents to $6.575 per 1,000 cubic feet. London Brent added 43 cents to $62.77. European gold prices further declined. In London gold fell to $555.25 bid per troy ounce, down from $565.10. In Zurich the precious metal fell to $555.40 from $565. In Hong Kong gold dropped $13.20 to $554.60. Silver opened at $10 per troy ounce, down from $10.20.

The U.S. dollar advanced against other major currencies. The euro traded at $1.1909, down from $1.2017. The dollar bought 117.84 yen, up from 117.54. The British pound was quoted at $1.7363, down from $1.7491.

Earnings from several small retailers generally met analyst’s expectations
Per-Se Technologies, ((PSTI)), provider of healthcare technology products, reported Q4 earnings of 34 cents a share, down from a profit of $1.11 a share a year-ago. On an adjusted basis, the company reported earnings from continuing operations of 27 cents a share in Q4. The adjusted results exclude expenses related to the NDCHealth acquisition and a tax benefit. The analysts estimate was for a profit of 29 cents a share.

Finlay Enterprises, ((FNLY)), retailer of fine jewelry products, reported Q4 net income of $3.11 a share, up 2% from $3.02 a share in the year-earlier period. If not for charges, net income advanced to $3.25 a share from $2.94 a share. Revenue grew 10.7% to $421.4 million.

The Sports Authority Inc, ((TSA)), sporting goods retailer, reported Q4 earnings of $1.10 a share, up from a year-earlier profit of 96 cents a share. Sales advanced in Q4 to $741.1 million from $713.8 million in the same period a year ago and same-store sales advanced 2.4%. The analysts’ estimate was for a profit of $1.08 a share. The company attributed the improved earnings to strong sales of active and outdoor apparel, fitness and team sports products, as well as improved gross margins and continued expense controls.

Dick''s Sporting Goods Inc, ((DKS)), sporting-goods retailer, reported that Q4 net income advanced 28% to $1 a share, up from 79 cents a year earlier, topping analysts’ estimate of 98 cents a share. Sales for Q4 rose 8% to $849.5 million, while same-store sales advanced 4.1%.

Sunrise Senior Living, ((SRZ)), assisted living company, reported Q4 earnings of $1.01 a share, up from 28 cents a share in the year-ago period. Revenue advanced to $554.7 million from last year''s $379.1 million. Same-community portfolio revenue rose 6.7%, with the average daily rate rising 3.6% and occupancy increasing 3.4%. The company expects earnings of 28 to 34 cents a share in the first quarter and $1.16 to $1.20 a share for 2006.