US & World Daily Markets Financial Briefing 13-04-2006

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This is the last World Daily Markets Briefing until Tuesday 18th April, owing to the Bank Holiday weekend. ADVFN would like to wish all of its users a Happy Easter.

U.S. Stocks at a Glance

U.S. stocks turn mixed, weathering rise in long-term rates

NEW YORK - U.S. stocks turned mixed Wednesday as investors weighed a flurry of economic reports, earnings from General Electric, Advanced Micro Devices and others against a rise in long-term interest rates to multi-year highs.
   
The Dow Jones Industrial Average was last up 2 points at 11,128 after briefly surging to a high of 11,156 in early trade.
   
The Nasdaq Composite Index rose 2 points at 2,316, while the S&P 500 Index fell 2 points to 1,286.
   
Stocks are holding up well because they have fallen to support levels following a recent pullback that has seen the S&P 500 fall around 2%, according to Steve Goldman, chief market strategist at Weeden & Co.
   
"And that's allowing stocks to weather a little bit of the storm coming out of interest rates this morning. Technology stocks, sometimes more prone to weakness with higher rates, are actually doing well."
   
The New York Stock Exchange is closed for the Good Friday holiday.
   
On the broader market for equities, decliners outpaced advancers by more than 2 to 1 on the New York Stock Exchange, and by 14 to 8 on the Nasdaq.
   
Earnings in focus
   
Shares in General Electric Co. fell 12 cents to $34.35 after the industrial conglomerate posted an in-line first-quarter profit and reaffirmed its earnings forecast for 2006. Revenue for the quarter, however, came in just ahead of analyst forecasts.
   
"The lack of earnings upside may be modestly disappointing given recent positive pre-announcements from Illinois Tool Works, 3M and Danaher," said Goldman Sachs analyst Deane Dray in a note to clients. Dray reiterated the stock's outperform rating.
   
Also on the earnings front, Advanced Micro Devices Inc. swung to a first-quarter profit after it spun off its money-losing memory-chip unit and saw surging sales of its chips used in personal computers and corporate servers. The stock was down 8.2% at $32.50 after gaining just over 3% ahead of its results in trading Wednesday.
   
Spansion Inc. , the company created out of AMD's memory-chip division, saw its shares climb 4.8% to $17 after its losses narrowed over year-ago levels due to increased sales for flash memory chips used in mobile phones.
   
Also in the chip sector, Lam Research Corp. rose 6% to $47.44 on a 45% jump in quarterly profit as sales of new technology products boosted its revenue numbers.
   
Outside of technology, McDonald's Corp. was off 5 cents at $35.14. The fast-food giant said its U.S. March same-store sales rose 6.6%, helped by its breakfast menu and extended operating hours. The fast-food chain also forecast first-quarter earnings of 49 cents a share, in line with expectations of analysts polled by Thomson First Call.
   
In other news, shares of SanDisk Corp. shot up 4.8% to $62.28 after Standard & Poor's said late Wednesday that the maker of flash memory products will replace Chiron Corp. in the S&P 500 index. Chiron is being acquired by Novartis AG.

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Dollar follows treasury yield higher in thin trading

NEW YORK - The dollar edged higher against major rivals in subdued trading early Thursday, with many market participants reluctant to take large positions ahead of the Easter holiday weekend.
   
The dollar registered a limited reaction to a mixed batch of economic data that showed a stronger-than-expected retail sales growth and benign import prices.
   
"The dollar had positive momentum going into the numbers but the numbers themselves, I don't think were enough to push the dollar higher," said Lara Rhame, currency strategist at Credit Suisse First Boston. "What we've seen...is the dollar moving on the back of the bond market. The 10-year rose to a new cyclical high again."
   
In early New York trading, the euro changed hands at $1.2069, down 0.3%. The dollar strengthened 0.2% to 118.78 yen. The British pound was down 0.07% at $1.7489, while the dollar rose 0.2% to 1.3008 Swiss francs.
   
Sentiment towards the dollar was also undermined by geopolitical concerns over the Iran nuclear program, analysts noted.
   
Mixed data
   
U.S. retail sales increased 0.6% in March, the Commerce Department said Thursday, with unexpected strength in auto and building materials sales. Economists were looking for sales to rise 0.4%, according to a survey conducted by MarketWatch.
   
Excluding the 1.6% rise in auto sales, retail sales increased 0.4%, as expected.
   
Separately, the Labor Department said prices of goods imported into the U.S. decreased 0.4% in March, the third decline in the past four months. Economists expected import prices to rise 0.1% in March after February's 0.5% drop.
   
Elsewhere, initial applications for U.S. state unemployment benefits unexpectedly rose by 12,000 to 313,000 in the week ending April 8, according to the Labor Department. Economists expected a slight increase in initial claims to about 305,000.
   
Yuan falls sharply
   
Overnight, the Chinese yuan suffered its biggest fall against the dollar since China scrapped its decade-old yuan/dollar peg last summer, according toFelicity Algate at Bear Stearns.
   
The People's Bank of China set the yuan mid-point at 8.0248 against the dollar, a fall of 0.16%. The Chinese currency touched a post-revaluation high of 8.0022 on Monday.
   
The market has abounded with talk of faster appreciation of the yuan ahead of Chinese President Hu Jintao's visit to Washington next week, some analysts noted.
   
"The yuan is expected to break through the 8.0000 barrier either this week or next week," Algate said, in a note.
   
Kiwi at three-week high
   
Elsewhere, the New Zealand dollar touched a three-week peak of 0.6259 against the dollar in the wake of strong retail sales and manufacturing data, before paring gains to trade at $0.6161, down 1.1%.
   
New Zealand reported a dramatic 1.9% rise in February retail sales, much better than market expectations for 0.3% growth, easing some concerns that the New Zealand economy is heading into a recession.

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The European Markets at 12.00 BST

London - Leading shares fell into negative territory at midday, with energy stocks down and investors anticipating a weak start on Wall Street, dealers said.
   
At 12.03 pm, the FTSE 100 was 10.5 points lower at 5,990.3, with the broader indices mixed.
   
Volume was poor ahead of the Easter break, with 817.8 mln shares changing hands in 97,282 deals.
  
Frankfurt - Shares were lower at midday as oil prices remained firm and as US stock futures pointed to an uninspiring opening, though Schwarz Pharma soared as investors cheered news Pfizer is to buy all the rights to its overactive bladder drug Fesoterodine, dealers said.
   
At 12.24 pm, the DAX 30 index was 19.81 points or 0.34 pct lower at 5,881.44. The MDAX was at 8,556.57, up 29.59 points or 0.35 pct, while the TecDAX was at 715.35, down 0.85 points or 0.12 pct.

Paris - Shares were flat in calm midday trade, down from morning gains, as the market paused ahead of the Easter vacation, and before the first quarter results season begins in earnest next week, dealers said.
   
At 12.43 pm, the CAC-40 was trading 0.11 point lower at 5,084.96, on thin volume of 1.56 bln eur. Of the CAC-40 stocks, 21 were down and 19 were up.

Amsterdam - Shares were at slightly lower levels midday, weighed down by KPN and Royal Dutch Shell, with trading volumes thin as the market winds down for the Easter break, dealers said.
   
At 12.10 pm, the AEX was trading near its intra-day lows, down 1.43 points, or 0.31 pct, at 462.19 after reaching an early high of 464.44.

Milan - Share prices were slightly lower at midday trade led down by weakness in Capitalia and among other banking stocks, while Fondiaria-SAI bucked the trend on positive broker comments, dealers said.
   
At 12.40 pm, the Mibtel index was down 0.22 pct at 29,208 points and the S&P/Mib was off 0.38 pct at 37,598, while volumes stood at 2.81 bln eur.

Madrid - Share prices moved into the red, in line with the rest of Europe in thin midday trade as blue chips gave up their tentative morning gains ahead of Wall Street's opening and US data, dealers said.
   
At 11.42 am, the IBEX-35 index was down 20.1 points at 11,580.6, after trading in a range of 11,571-11,645, on turnover of 765 mln eur.

Stockholm - Share price closed today's shortened session slightly higher, with mining firms once again posting sharp gains fuelled by high metal prices, dealers said.
   
The OMX Stockholm index closed up 0.22 pct at 338.64, while the OMX Stockholm 30 index gained 0.24 pct to close at 1,052.08. Turnover was 13.45 bln skr.

Helsinki - Share prices were flat midday, with gains in Nokia and in industrials offset by losses at TietoEnator, which fell sharply after disappointing investors with news that first-quarter profitability missed its own targets, dealers said.
   
At 12.32 pm, the OMX Helsinki 25 index was unchanged on yesterday's close at 2,673.18.

Brussels - Shares were flat in late morning trade, as volumes remained subdued in the final run-up to the Easter break, dealers said.
   
At 10.45 am, the Bel 20 index was down 3.54 points or 0.09 pct at 3,833.79. Belgacom was off 0.24 eur or 0.86 pct at 27.57 after the CEO said yesterday the company is interested in the privatisation of 70 pct of Serbia's Mobtel.
   
Peer Mobistar was down 0.20 eur or 0.40 pct at 50.25 after being downgraded to 'neutral' from 'outperform' at Credit Suisse.

Athens - Shares were higher in late morning trade, led by mid caps, as overnight gains on Wall Street lifted sentiment after two consecutive profit taking sessions, brokers said.
   
At 11.45 am the ASE general index was 0.5 pct higher at 4,226.2 points, and blue chips were up 0.5 pct at 2,294.1 points. Mid caps were outperforming, up 0.9 pct at 4,542.3 points.

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Asian shares close mixed, Tokyo higher on bargain-hunting

HONG KONG - Asian shares ended mixed with Tokyo firmer as bargain-hunters surfaced after the market's morning retreat, with Sony Corp among winners on a report that its operating profit for the year ended March 31 may be ahead of its estimate, dealers said.
   
The 225-issue Nikkei Stock Average finished up 36.60 points or 0.2 pct at 17,199.15, while the broader TOPIX index of all First-Section issues inched up 0.88 point to 1,743.77.
   
"Share prices had earlier succumbed to profit-taking but some investors stepped in to target bargains on hopes for brisk corporate results for the year to last March and upbeat sentiment gradually spreading," said Hideo Mizutani, chief strategist at Sieg Securities.
   
In the consumer electronics sector, Sony Corp added 90 yen or 1.7 pct to 5,520 following a media report that its operating profit for the year to last March may have beaten its forecast by 10-20 bln yen.
   
In Australia, share prices closed down as trading volumes were subdued in a shortened session ahead of the Easter holiday, dealers said.
   
They said investor sentiment was expected to remain flat despite the rise on Wall Street overnight and base metal prices hitting fresh record highs or multi-year peaks.
   
The S&P/ASX 200 fell 8.0 points or 0.15 pct to close at 5,175.7, slipping from last Thursday's record closing high of 5,238.9.
   
Trading ended at 2.15 pm here, two hours before normal.
   
Share prices in Hong Kong were trading firmer following Wall Street's gains, dealers said.
   
They said trading was cautious ahead of a long weekend and due to continuing concerns over geopolitical tensions related to Iran.
   
The market will be closed tomorrow and Monday for the Easter holidays.
   
At 3:25 pm, the Hang Seng Index was up 128.44 points or 0.79 pct at 16,439.20.
   
In mainland China, A-shares in Shanghai and Shenzhen closed sharply lower on profit-taking and renewed liquidity worries with metal and energy listings dragged down, dealers said.
   
The Shanghai A-share Index lost 29.17 points to 1,397.14 on turnover of 19.96 bln yuan and the Shenzhen A-share Index was down 7.79 points at 348.85 on turnover of 13.76 bln yuan.
   
Share prices in Seoul finished sharply higher, ending a three-day decline as Samsung Electronics, KEPCO and POSCO posted solid gains, dealers said.
   
Wall Street's overnight advance brought on a firm start but the market soon turned sideways as investors remain cautious due to the expiry of options contracts today and industry bellwether Samsung Electronics' earnings release tomorrow.
   
But intensified retail and institutional investor support sent the index above 1,400 points to close at its strongest level for the day.
   
The KOSPI index closed up 22.13 points or 1.60 pct at today's high of 1,405.72.

Asian Bourse Round-Up

For a full list of figures at the close of trade, click here

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Gold futures head lower in morning dealings

SAN FRANCISCO - June gold fell $3.60 to $597.70 an ounce in morning dealings and May silver fell 2.3 cents to $12.64 an ounce. With the London and New York markets shut tomorrow for Good Friday, "traders are going to be reluctant to go home short, given the heightened geopolitical climate," said James Moore, an analyst at TheBullionDesk.com.

"For the moment, I think gold should see a brief period of consolidation around $585-$605 before clearing the $605 chart congestion and pushing on towards $625," he said in a note to clients.

On the bond market, long-term Treasury prices fell, sending yield higher. The benchmark 10-year note was down 10/32 at 95 30/32, with its yield at 5.02%, the first time it has hit such a level since June 2002.
   
Crude-oil prices weakened slightly, as traders mulled recent supply data and as the head of the United Nations' nuclear watchdog arrived in Iran to attempt to head off escalating international political tensions. The benchmark May contract was off 37 cents at $68.25 a barrel.

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