US & World Daily Markets Financial Briefing 23-04-2008

Welcome to the Investors Hub World Daily Markets Bulletin; your daily e-mail guide to important Domestic, European and Global market events. Market Briefing is here to keep you informed and up-to-date on key financial developments.

If you have forgotten your password, click here.

Stocks waver as Street parses earnings, Liberty-Safeco deal

NEW YORK  - Stocks fluctuated in early trading Wednesday as investors examined an assortment of first-quarter earnings and took in the news that Liberty Mutual plans to acquire Safeco.

Liberty's announcement sent Safeco shares surging and perhaps helped reassure investors nervous about corporate earnings. The $6.12 billion deal would create the country's fifth-biggest property insurer.

Boeing Co., one of the 30 stocks that comprise the Dow Jones industrial average, appeared to help buoy investor sentiment after reporting that its first-quarter earnings rose 38 percent. However, investors also sent shares of bond insurer Ambac Financial Group, health insurer WellPoint Inc. and Delta Air Lines Inc. lower following their reports.

Wall Street has been digesting the flood of corporate numbers arriving in recent weeks as it tries to ascertain how long a slowdown in the economy might last. With little in the way of economic news expected this week, investors are left to focus on corporate news and await the next interest rate decision from the Federal Reserve, which is due in a week.

In the first hour of trading, the Dow fell 3.18, or 0.02 percent, to 12,717.05 after moving in and out of positive territory. Broader stock indicators rose. The Standard & Poor's 500 index ticked up 0.20, or 0.01 percent, to 1,376.14. The Nasdaq composite index showed a stronger advance, rising 12.64, or 0.53 percent, to 2,389.58.

Declining issues outnumbered advancers by about 4 to 3 on the New York Stock Exchange, where volume came to 189.6 million shares. The back-and-forth trading comes a day after the Dow fell more than 100 points after results from names like DuPont and McDonald's Corp. failed to impress investors and as oil prices rose to fresh highs.

Light, sweet crude fell $1.04 to $117.03 on the New York Mercantile Exchange. Bond prices fell Wednesday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.71 percent from 3.69 percent late Tuesday.

The dollar was mixed against other major currencies, while gold prices fell. Among stocks, Boeing rose $2.12, or 2.7 percent, to $80.68 after its report. Some corporate results arriving Wednesday painted a lackluster picture. Ambac declined $1.81, or 30 percent, to $4.22 after its report that swung to a loss of $1.66 billion from a profit of $213.3 million a year earlier. The loss came in part because of charges for bonds backed by soured mortgages.

WellPoint fell 53 cents to $46.02 after posting a 25 percent decline in its first-quarter profit and lowering its full-year forecast because of higher medical costs. Delta fell 10 cents to $6.70 after reporting that its first-quarter loss widened to $6.39 billion because of soaring fuel prices and a steep decline in the company's market value. Results from the nation's third-largest carrier missed Wall Street's forecast.

Yahoo Inc. turned in stronger-than-expected profits and revenue. The shares lost 79 cents, or 2.8 percent, to trade at $27.75 after the company affirmed its forecast, rather than boosting its predictions.

The Russell 2000 index of smaller companies fell 1.83, or 0.26 percent, to 701.88. Overseas, Japan's Nikkei stock average closed up 0.23 percent. In afternoon trading, Britain's FTSE 100 fell 0.21 percent, Germany's DAX index declined 0.21 percent, and France's CAC-40 rose 0.40 percent.

Gain a trading edge by learning to interpret the most common chart patterns for identifying market direction and target prices. With information on trendlines, channels, and more, the Intro to Technical Analysis Guide from RJO Futures can help you apply this valuable technique to your futures trading. Click here.

Forex - Euro weaker vs dollar on disappointing manufacturing PMI data

LONDON - The euro weakened against the dollar on Wednesday, after data earlier showed a bigger-than-forecast drop in euro zone manufacturing activity, while the pound erased earlier gains after a relatively hawkish set of Monetary Policy Committee minutes.

Provisional figures showed the euro zone manufacturing PMI index fell to 50.8 in April, its lowest reading since August 2005 and ominously close to the 50 mark, below which marks contraction in the sector.

"So far, the manufacturing sector in the euro zone has proved remarkably resilient to the combination of strong euro and slower U.S. demand. This might have recently changed," said Gilles Moec at the Bank of America.

The equivalent reading for the services sector unexpectedly showed a rise to 51.8 from 51.6 in March. Analysts noted, however, that the figure is still weak and well below the levels seen in mid-2007.

Overall, the data suggest the European Central Bank could cut interest rates at some point, though this is not expected to be any time soon given elevated inflationary pressures.

"We believe that markedly weaker euro zone growth over the coming months, an extended credit crunch and very strong euro will gradually dilute underlying inflation pressures and ultimately lead the ECB to cut interest rates before the end of the year," said Howard Archer at Global Insight.

Meanwhile, the pound erased earlier gains after the minutes to the Monetary Policy Committee showed a three-way split in the vote to cut interest rates by 25 basis points. Tim Besley and Andrew Sentance voted to leave rates on hold, but arch dove David Blanchflower preferred a bigger 50 basis point cut.

The pound initially gained given the two votes to leave rates unchanged, though these gains were later eroded, with the pound coming back to day lows against the euro, with most market players still feeling that another cut remains likely.

"The implication is that the MPC as a whole likely feels that there is still a case for additional easing, but that its pace will still be a matter for debate," said Daragh Maher at Calyon.

Data released by the British Bankers' Association meanwhile highlighted the potentially sharp downturn facing the housing market, with mortgage approvals for house purchase slumping to their lowest level since records began in September 1997.

For stock market quotes, company information, stock charts, historical quarterly reports and historical annual reports, click here

Euroshares open up, UCB soars on FDA approval, Infineon on M&A hopes

At 9:17 a.m., the DJ STOXX 50 was up 7.96 points, or 0.25 percent, at 3,156.57, while the STOXX 600 added 1.02 points, or 0.32 percent, to 316.52.

In Europe, shares in Belgian pharmaceutical group UCB gained 27.7 percent after its Cimzia drug received approval by the U.S. Food and Drug Administration for the treatment of moderate to severe Crohn's disease.

As a reaction, Lehman Brother raised its recommendation to 'equal-weight' from 'underweight'. "Given the recent stock underperformance, we expect this approval to mark an inflection point for the stock," the broker said in a note, adding that the approval was unexpectedly early, a further positive trigger.

Peer Merck KGaA was trading 4.04 percent higher, at last check, after the German group released strong first-quarter figures this morning, with both sales and bottomline numbers well ahead of expectations.

Staying with earnings news, Infineon was one of today's strongest gainers, up 6.6 percent as investors stick to hopes that the German chip maker will soon dispose of its ailing Qimonda unit, despite posting mixed second-quarter results earlier this morning.

"Qimonda is the problem child for Infineon and a solution for its stake [in Qimonda] before the summer would be a very positive surprise," said a Frankfurt-based trader. Over in Sweden, better-than-expected first quarter profits and a bullish outlook sent shares in Svenskt Stal AB on a 6 percent rally. "It was a strong set of results, and the future outlook is good," Claes Rasmuson, an analyst at Swedbank said.

"They think demand will (be) strong in most regions and for their niche products," he added. An equally pleasing earnings report lifted shares in Tele2 5.8 percent, while And Tele2 added 5.8 percent after the telecom operator reported better-than-expected first quarter profits, and further pleased the market with a bullish outlook for the Russian operations.

Tele2 said first-quarter EBITDA amounted to 1.764 billion Swedish crowns, including an unexpected non-recurring charge of 61 million crowns, while market expectations were for 1.731 billion crowns excluding one-offs, according to SME Direkt.

Meanwhile, OC Oerlikon, which has seen a strong couple of days after Russian oligarch Viktor Vekselberg raised his stake in the group, shed 3.8 percent after the group issued a profit warning and released disappointing first-quarter sales and order numbers.

And TomTom, which added more than 9 percent last night, fell back 4.5 percent this morning after the Dutch satellite maker released its earnings report for the first quarter. Analysts highlighting the group's cash position as a positive in light of its bid for peer Tele Atlas which is currently under review by the European Commission.

Turning to economic news today, the provisional estimates for euro zone purchasing managers index showed a worse-than-expected decline in the 'flash' manufacturing PMI. It fell to 50.8 in April from 52.0, and below the 51.6 seen by economists.

The services index, however, came in better than expected, up at 51.8 from from 51.6 in March. Meanwhile, U.K. investors are awaiting the release of the minutes from this month's Bank of England Monetary policy committee meeting, while data on existing home sales will be closely watched in the U.S. in the afternoon.

Fast-loading, feature-rich and highly customizable interfaces for reading and posting messages. click here

Asian stocks advance on bargain-hunting; Shanghai rises 4 percent

The Shanghai composite index closed 4.2 percent higher at 3,278.33 points and the Hang Seng Index closed 1.4 percent higher at 25,289.24.

In Tokyo the Nikkei 225 Stock Average finished 0.2 percent higher at 13.579.16 points. The benchmark index rose more than 1 percent during the session as investors covered short positions before trimming gains on caution before the release of earnings by major companies. The reporting season gets into full swing in Japan Thursday, with Canon, Nintendo, KDDI and Suzuki Motor releasing results.

Idemitsu Kosan jumped 10.7 percent to 9,200 yen after the oil refiner said Tuesday it was expecting operating profit for the fiscal year ended March to be 56 billion yen, more than its previous forecast of 48 billion yen. Nippon Oil rallied 7.4 percent to 770 yen, Nippon Mining Holdings advanced 5.5 percent to 674 yen and oil field developer Inpex rose 4.1 percent to 1.27 million yen.

Trading houses were firmer, with Mitsubishi Corp. rising 3.2 percent to 3,600 yen, Mitsui & Co. 4.9 percent higher at 2,580 yen and Itochu Corp. 2.3 percent higher at 1,149 yen. In Seoul the KOSPI index closed 0.7 percent higher at 1,800.79, with steelmakers, shipbuilders and retailers advancing.

Dongkuk Steel Mill jumped 5.6 percent to 46,000 won and Hyundai Steel rose 2.9 percent to 78,000 won. POSCO gained 4.6 percent at 488,500 won. Retailer Shinsegae rose 3.9 percent to 646,000 won on the brisk performance of its department stores during the spring sales season. Lotte Shopping was 1.2 percent higher at 339,000 won. Resources rally

In Sydney the benchmark S&P/ASX 200 index closed 1.6 percent higher at 5,652.9 points, its highest finish in two months, as the resources and financial sectors advanced. The broader All Ordinaries index added 1.5 percent at 5,711.4.

The market shrugged off higher-than-expected inflation data, which increased the chances of further rate increases by the Reserve Bank of Australia. The headline consumer price index rose 1.3 percent in the first quarter from the previous quarter and was 4.2 percent higher than a year earlier. The market was expecting a quarterly rise of 1.1 percent and an annual rise of 4.0 percent.

BHP Billiton added 3.6 percent at A$45.10 on rises in base metal prices overnight and on its record output of iron ore, which increased 22 percent to 28.0 million tonnes in its financial third quarter. Rio Tinto advanced 3.4 percent to A$147.19.

Woodside Petroleum rose 2.8 percent to A$60.21, off an all time high of A$60.40, on higher oil prices. Santos gained 1.1 percent at A$16.82 and Oil Search was 2.4 percent higher at A$5.08. The financial sector gained after Australia & New Zealand Banking Group (ANZ) posted results in line with expectations.

Although ANZ's cash net profit for its financial first half ended March fell 14 percent to A$1.67 billion from a year earlier after credit impairment provisions totaling A$980 million, the bank is experiencing good revenue growth and its balance sheet remains robust, Chief Executive Mike Smith said. ANZ rose 4.2 percent to A$22.03.

National Australia Bank added 2.1 percent at A$30.01, Westpac gained 2.5 percent at A$25.01 and Commonwealth Bank of Australia climbed 0.4 percent to A$44.19. Leading investment bank Macquarie Group was 1.3 percent higher at A$60.78, while Babcock & Brown was 3 percent higher at A$13.80.

Elsewhere, Singapore's Straits Times Index was closed 0.2 higher at 3,193.84 and the Kuala Lumpur Composite Index closed 0.7 percent higher at 1,288.16.

In Kuala Lumpur Telekom Malaysia (TM) rose 16.1 percent to 3.54 ringgit from its reference price of 3.05 ringgit before the listing of its overseas and cellphone business next week. Oil and gas stocks were among the major gainers, with UMW Holdings jumping 3.2 percent to 6.50 ringgit and Kencana Petroleum gained 3 percent to 2.05 ringgit.

Jakarta's composite index rebounded from early weakness due to worries about inflation and ended 1.1 percent higher at 2,314.30. There is growing speculation that the government will increase prices of subsidized fuel because of pressure from soaring crude prices.

The Philippine Composite closed 1.1 percent lower at 2,824.81.Taiwan's weighted index closed down 0.32 percent at 9,008.49

The Bombay Stock Exchange's 30-share benchmark Sensex closed 85.83 points or 0.51 pct lower at 16,698.04 and the National Stock Exchange's 50-share S&P CNX Nifty closed 26.50 points or 0.52 pct lower at 5,022.80.

The most traded market in the world; 24 hr market platform with the latest news, prices and charts gives you the knowledge to invest in this exciting and fast moving market.
Click here

Oil falls on profit taking after record; refinery woes, U.S. stocks data in shot

LONDON - Oil fell as some participants booked profits after a record $119.90 was reached on Tuesday, but losses were limited as players continued to fret over supply disruptions ahead of key U.S. inventory data.

Attention is still firmly fixed on Ineos's Grangemouth oil refinery in Scotland. Meetings between Ineos and the UK union Unite continue today but have so far failed to yield any results over labour disputes. This could lead to a two-day strike at the 200,000 bpd refinery which threatens fuel supply in Scotland and Northern England.

"Given that Ineos also provide steam and power for the Kinneil terminal of the Forties pipeline system (projected to export 619,000 bpd in May), BP, the pipeline operator, has voiced concerns that a shut-down of Grangemouth may also impact the provision of these services, and in turn limit pipeline operations. Today's negotiations between Ineos management and trade union officials will receive close attention," said Barclays Capital analysts.

At 1:04 p.m., U.S. crude for June delivery was down 76 cents at $117.31 a barrel after the May contract expired on Tuesday at $119.37, briefly hitting an all-time peak of $119.90.

London Brent crude fell 76 cents to $115.19, after touching an intraday record high of $116.75 the previous session.

Falling U.S. gasoline inventory ahead of the peak demand driving season also underpinned the market. Analysts polled by Thomson Financial News expect weekly U.S. government figures, due Wednesday at 3:30 BST, to have dropped by 2.1 million barrels last week.

While analysts also reckon U.S. crude stocks rose last week, some say this is unlikely to stop the general trend higher for oil prices.

"The focus on supply constraints will inevitably lend gravity to the weekly EIA data released this afternoon with all eyes on the gasoline component ahead of the U.S. driving season," said Bank of Ireland analyst Paul Harris.

"Forecasts suggest that the level of gasoline stocks will have fallen for a consecutive sixth week and this should be sufficient to see oil prices breeze through the $120 level."

Elsewhere on the supply side, the OPEC cartel, which pumps well over a third of global oil, has ruled out an output increase and its members have said they will not be meeting before September to discuss production.

Meanwhile, the market is paying little attention to possibly soft demand in the wake of a credit crunch for now.

"The U.S. oil market is the strongest in the world despite weak demand and a slowing economy, while the rest of the world is pricing much weaker fundamentals," said Goldman Sachs. "The U.S. oil refining system has been preparing for the current weakening oil demand environment very carefully, cutting refinery runs and production at the same time as sharply decreasing crude and product imports," the broker's analysts added. "The timing of the cut has in turn not only preempted an inventory build typically associated with weakening demand but also caused the recent fundamentals tightening."

The U.S. government data today is also expected to reveal that refinery capacity in the world's top consumer increased by 0.75 percentage points from last week's low of 81.4 percent.

The latest streaming prices and news on major commodities from precious metals to crude oil, so you can keep up-to date and never miss a trading opportunity again.
Click here

Investors Hub Services