US & World Daily Markets Financial Briefing 15-03-2006

U.S. stocks trade mixed; DuPont lifts earnings view

NEW YORK  - U.S. stocks traded mixed Wednesday as the market struggled to extend multi-year highs hit in the prior session, but strong economic data and positive earnings news out DuPont, Lehman Bros and Sears were putting a floor on declines.
   
The Dow industrials were last down 8 points at 11,143. The S&P 500 Index fell 1 point to 1,296. The Nasdaq Composite Index rose 3 points to 2,299.
   
On Tuesday, stocks ended sharply higher after a significant decline in long-term interest rates pushed the S&P 500 Index to its highest level since May 2001, and the Dow industrials to their best closing level since June 2001.
   
Investors, particularly in the bond market, worry that the Federal Reserve will have to raise interest rates over a longer period than initially anticipated if the economy continues to grow at a blistering pace, stoking inflationary pressures. Rising rates eat into the value of fixed-income instruments.
   
For equity traders, higher rates are also a concern but strong economic growth also points to healthy corporate profits going forward. The Fed has raised its key short-term rate 14 times over the last two years. It now stands at 4.5%.
   
Positive earnings news
   
Shares in DuPont rose 3.4% to $43.34 after the chemicals company lifted its first-quarter 2006 adjusted earnings forecast to 80 cents a share, up from a previous outlook of 70 cents, reflecting better operating performance, partly offset by weaker European market conditions. DuPont also raised its 2006 earnings forecasts to $2.60 to $2.70 a share before items.
   
Shares in Lehman Bros. were off 17 cents at $145.13 in early trading. The investment bank posted a 24% rise in first-quarter earnings on strong fixed income trading and near record merger activity. Its results topped analyst forecasts but did not match the more than 60% rise in quarterly net income posted by Goldman Sachs Group on Tuesday.
   
Shares in Sears Holdings, the company formed by the merger of Kmart and Sears, rallied 9.1% to $127.91 after the retailer posted fourth-quarter earnings that handily topped analyst estimates. Tight cost controls helped offset weakness in same-store sales, a gauge of retail performance that tracks sales at stores open at least a year.
   
Other stock standouts
   
General Motors Corp. surged 3.2% to $21.82. The Wall Street Journal reported the automaker has received a bid for its GMAC arm by investors led by Kohlberg, Kravis & Roberts.
   
Shares in CVS Corp. fell 2.2% to $29.90 after the drugstore chain said its chief controller and treasurer have left following an internal investigation into accounting errors.
   
Elsewhere, shares in PMC-Sierra Inc. rose 5.7% to $11.96 after broker UBS upgraded the chip developer to buy from neutral, saying the company is likely to benefit from higher capital spending at telecommunication companies.

VantagePoint's market forecasts are nearly 80% accurate. Take a look at actual VantagePoint forecasts, become eligible for a Complimentary VantagePoint Market ($750 value!) and see the difference they will make in your trading. Click here to see two recent forecasts now.

NEW YORK - The dollar weakened early Wednesday after a Treasury report showed capital inflows failed to cover the record trade deficit of the corresponding month.
    
"The number is not good for the dollar," said Ashraf Laidi, chief currency analyst at MG Financial Group. "For the second month in a row, the capital flows came [in] lower relative to the trade deficit of the corresponding month, meaning there is increased difficulty for the U.S. to finance its swelling trade deficit."
   
Capital flows into the U.S. rose to $66.0 billion in January as private investors increased their purchases of U.S. equities, the Treasury Department said Wednesday. December's capital inflows were revised lower, to $53.8 billion from a previously estimated $56.6 billion.
   
In early New York trading, the dollar changed hands at 117.23 yen, down 0.4%, while the euro was fetching $1.2057, up 0.3%.
   
Earlier, the dollar posted modestly gains after a report showed manufacturing activity in the New York area surged in March.
   
The New York Federal Reserve Bank said its Empire State Manufacturing index unexpectedly rose to 31.2 in March from 21.0 in February. Economists were expecting the index to slip to 18.5 from the initial estimate last month of 20.3.
   
Separately, U.S. import prices fell 0.5% in February as prices for petroleum and natural gas declined, the Labor Department said. Economists were expecting import prices to fall 0.4% in February.
   
At 2 p.m. Eastern, the Federal Reserve is slated to release the Beige Book report on regional economic conditions.
   
The dollar slid to a one-month low against the euro and fell against the yen Tuesday, pressured by a weak retail sales reading, a record U.S. current account
figure, and a report from Medley Global Advisors that suggested the Fed may soon wrap up its interest-rate tightening campaign.
   
Elsewhere, the British pound took a hit following a worse-than-expected jobless claims reading out of U.K. At last check, sterling was at $1.7448, down 0.1%.
   
February jobless claims in Britain rose 14,600 to 919,700 in March. The monthly increase was the largest since 1992. The unemployment rate over the last three months rose 0.1 percentage points to 5%.
   
Overnight, the Chinese yuan saw its sharpest daily rise since the nation dropped its decade-old dollar/yuan peg last July. The gain came after Chinese premier Wen Jiabao said the market will play a greater role in determining exchange rates.

HotSignals release a lite version of their highly successful US equity
technical analysis package. We give YOU the edge...Select long and short trading signals for US equities - HotSignals Lite.
Did you sell Google at $444.91? We did and many more every trading day. Are you looking for something different in your trading armoury?Then look no further. Click here

London shares higher midday as M&A hopes offset expectations of dull Wall St

At 11.49 pm, the FTSE 100 was 19.7 points firmer at 5970.3, mirroring the positive wider market sentiment. Volume was solid, with 1.7 bln shares changing hands in 142,875 deals.

In equities, Hanson continued to top the top blue chip leaders board on ongoing speculation the construction group is being eyed by an overseas predator.
   
Dealers named French peer Lafarge as a possible suitor but also stressed the rumour has been doing the rounds for a while.
 
Bid talk also provided the spur to Smith & Nephew, 18-1/2 firmer at 549-1/2, as rumours spread that Bristol-Myers Squibb from the US is circling the medical group. Other potential admirers include Johnson & Johnson.

On the downside, ex-dividend factors accounted for some of the biggest fallers, knocking just over 5 points of the FTSE 100's rise, with Gallaher, HBOS, Royal & Sun Alliance, and Reuters all among those losing dividend attractions today.

Paris

Paris shares higher at midday, led by financial stocks

At 12.37 pm the benchmark CAC-40 index was up 15.18 eur or 0.32 pct at 5,133.49, on volume of 2.18 bln eur. 23 stocks were higher and 17 lower.
   
On the Matif, March CAC-40 futures were trading 16.0 points higher at 5,133.0.

Societe Generale was at a record high, gaining 3.10 eur or 2.47 pct to 125.40, as the market continued to speculate on the likelihood of a bid by another major bank.
   
BNP Paribas was following, up 1.25 eur or 1.66 eur to 76.35.
   
AGF extended yesterday's strong gains on the back of forecast-beating full year results, up 1.75 eur or 1.94 pct to 91.75.
   
Dexia also rose with the sector, up 0.27 eur or 1.28 pct to 21.35.
   
Elsewhere, EADS erased yesterday's losses by gaining 0.50 eur or 1.58 pct to 32.10.
   
Suez made the biggest loss of the morning, after yesterday's 5 pct late surge, down 0.57 eur or 1.59 pct to 35.27.

Automated Forex Alerts to your email or Cell phone.
Finally a system that works! Come and see it live today.
Free Automated Trading, get your complimentary trial here

Amsterdam shares higher at midday; tech stocks lead

At 12.22 pm, the AEX was up 2.10 points or 0.45 pct at 464.68, its high for the day, after trading as low as 464.02.
  
Tech stocks, and especially those related to semiconductors, were boosted by several news reports.
   
ASML added 2.64 pct to 17.48 eur, Philips gained 2.19 pct to 27.06 eur and second-liner ASMI was up 2.25 pct at 15.93 eur after a report said that TSMC might exceed its computer chips production capacity because of high demand, and with a rumour saying that Infineon may have found a bidder for its DRAM
subsidiary.
   
Software companies joined the upward march, with Getronics adding 2.62 pct to 10.20 eur and second-liner Ordina adding 2.69 pct to 17.18 eur.
   
Ahold added 2.58 pct to 7.16 eur after market peer Delhaize posted better-than-expected results.

In the losers column, Wolters Kluwer shed 0.59 pct to 20.26 eur, Unilever dropped 0.52 pct to 57.95, Heineken lost 0.62 pct to 32.05 eur, TomTom was down 1.62 pct to 28.52 eur and Versatel led decliners, shedding 2.33 pct to 0.84 eur.

Frankfurt

German shares up midafternoon; MAN, BMW gains offset expected dull Wall St

At 3.12 pm, the DAX 30 index was 25.71 points or 0.44 pct higher at 5,896.59, having moved between 5,869.51-5,901.26 so far this session. The MDAX was at 8,502.45, up 66.47 points or 0.79 pct, while the TecDAX was at 729.64, up 1.06 points or 0.15 pct. The DAX futures contract was at 5,898.50, up 10.50 points or 0.18 pct, while bund futures were at 117.96, down 0.12 point.

MAN led large-caps higher, soaring 2.73 eur or 5.10 pct to 56.23, as the market cheered news the truckmaker is founding a joint venture with Allianz AG's Allianz Capital Partners to acquire its MAN Roland Druckmaschinen AG and then list the printing machine maker in a few years' time.

BMW was another bright spot, gaining 0.92 to 42.79, as the market cheered its 2006 outlook, which included aiming to achieve a pretax profit of 4 bln eur for 2006 compared with 3.287 bln last year.
   
The automaker also said that while it will again be hit by external burdens, mainly from currency effects and high raw material prices, they will "in all likelihood not reach the previous year's level" of almost 1 bln eur.
   
Peer Volkswagen rose 0.34 to 58.00, while DaimlerChrysler added 0.12 to 47.74.

At the other end of the market, Hypo Real Estate dropped 0.60 eur or 1.11 pct to 53.25.
   
Bayer was down 0.24 at 33.34, but sharply off earlier lows as rumours the pharmaceuticals and chemicals hybrid is to make a takeover bid for Schering was met with scepticism by market participants.
   
The rumour emerged after speciality pharmaceuticals company Schering's board last night rejected MDAX-listed Merck KGaA's 77 eur per share bid.
   
Bayer declined to comment on the talk.

How? By using new trading system by a 15 year market veteran designed for swing trading and day trading.  Learn how to trade any market, even if you are a novice. Manuals and videos provide a step by step blue-print to make learning easy. Phone and email support included.
ADVFN subscribers save $50.00 - Only $147
www.win-at-trading.com

Asian shares close higher, Tokyo up on Wall St rally but sentiment sluggish

HONG KONG - Share prices across the Asia-Pacific region ended up with Tokyo slightly higher tracking a rally in US stocks overnight, dealers said.
   
But gains in Japan were capped by market sentiment remaining sluggish in the absence of major leads, they added.
   
The Nikkei 225 Stock Average finished up 80.68 points or 0.5 pct at 16,319.04, after touching the day's high of 16,367.76.
   
The broader-based TOPIX index of all first-section shares gained 0.99 point or 0.06 pct at 1,666.78, off a high of 1,675.77.
   
"Trading volume shrinks to its lowest level at this time of the year, as the fiscal year draws to end. Along with that ... there are no leads now," said Ryuta Otsuka, a strategist at Toyo Securities.
   
He said Japanese institutional investors avoid taking aggressive positions at this time of year, with pension funds starting to buy only at the beginning of the new fiscal year in April.
   
Share prices in Australia closed higher as investor sentiment mirrored Wall Street rises, dealers said.
   
They said global focused stocks gained support from easing concerns over rate hikes in the US, and a rebound in metal prices aided global miner BHP Billiton while Rio Tinto slipped.
   
The S&P/ASX 200 gained 14.1 points or 0.29 pct to close at 4,946.3. The key indicator closed off the day's high of 4,963.4 and above the low at 4,937.0.
   
In Hong Kong, share prices were trading sharply higher in the afternoon led by property stocks as interest-rate worries eased to some extent following a decline in yields on long-term US government bonds overnight, dealers said.
   
They said news that Cheung Kong is offering an attractive mortgage plan to homebuyers also provided support to the property sector.
   
At 3:30 pm, the Hang Seng Index was up 229.79 points or 1.48 pct at 15,749.55.
   
In mainland China, A-shares in Shanghai and Shenzhen closed higher on the back of some bargain-hunting interest with metal companies and oil listings driven up, dealers said.
   
The Shanghai A-share Index rose 16.53 points to 1,337.19 on turnover of 9.30 bln yuan and the Shenzhen A-share Index was up 3.40 points at 320.56 on turnover of 4.76 bln yuan.
   
Share prices in Seoul ended higher, recouping much of yesterday's losses on institutional support, with sentiment buoyed by Wall Street's stronger close, dealers said.
   
Many large-cap blue chips, including Samsung Electronics and POSCO, rebounded to help the market touch the 1,340 point level at one stage, although the upside was capped by lingering concerns over oil, currency movements, and global interest rates, they added.
   
The KOSPI index closed up 7.68 points or 0.58 pct at 1,333.98.

Asian Bourse Round-Up

For a full list of closing prices, click here

Easy-Forex is a 24*7 real-time Forex trading platform that offers a complete Forex Dealing room service - Forwards, Options, Day Trading and Limit Order deals. Open an account with a minimum of 25$. 24/7 broker support. No commissions. No software download required. Immediate account activation by credit card. Start trading today. Special terms for frequent traders. Click here

On the bond market, long-term Treasury prices fell, sending yields higher after the factory data fueled rate worries. There was only a muted reaction to data showing a rise in capital flows into the U.S. for the month of January.
   
The benchmark 10-year note was last down 10/32 at 98 6/32, with the yield at 4.72%.
   
News, however, that capital inflows failed to cover the record trade deficit in January dragged the U.S. dollar lower.
   
Gold futures erased early weakness to trade higher as a pullback in the dollar saw investors switch their investment focus to the precious metal. The benchmark April contract was last up $4 at $557 an ounce.
   
Oil futures traded lower ahead of weekly U.S. supply data expected to show a fresh rise in crude inventory levels. The benchmark April contract was last down 54 cents at $62.56 a barrel.

Comments

We welcome any suggestions or comments you may have concerning our bulletin, so please do contact us via comments@advfn.com. To advertise with ADVFN please contact Dunstan Rickard dunstanr@advfn.com North America Sales Manager +44 (0)20 7070 0986