Finance Markets

January 26, 2007

US internet sector gains on week

Permalink: US internet sector gains on week

Filed under: Equities, Economy, US

The New York equities markets were lower at midday on Friday and seemed determined to close out the week with losses as well. The Dow Jones Industrial Average was down 0.3 percent at mid-session to 12,468.11, down 0.8 percent on the week and even on the year. The Nasdaq Composite dropped 0.2 percent on the day so far, to 2,437.99, leaving it 0.5 percent lower for the week. Meanwhile, the S&P 500 was 0.1 percent lower to 1,421.85, a drop of 0.6 percent for the full week.

Technology stocks were mixed during the week, with most showing either big gains or big losses. Among gainers were Sun Microsystems and Texas Instruments. Texas Instruments gained 8.7 percent to $30.86 on a glowing quarterly report, while Sun was 9.5 percent higher to $6.32. Decliners included biotech company Amgen, down 3.8 to $71.41 on a report that did not meet expectations., and Advanced Micro Devices, which fell 8.9 percent to $16.15, again on unmet expectations.

In the internet sector, Yahoo added 2.7 percent over the week to $28.38, a gain of 11 percent since the beginning of the month. Meanwhile, eBay did better than expected in earnings and upped its guidance for this year. The online auctioneer added 8.2 percent this week to $32.09.

Automobile manufacturers were mixed. General Motors added 4.1 percent during the week, to $32.84 even though it dropped from its peak of $33.30 after it said it would delay its fourth quarter report even though it expected that the report would show a profit. On the other hand, Ford dropped 0.5 percent to $8.26 after it said it had taken a loss of $12.7 billion in 2006, the biggest yearly loss in the company’s history.

FTSE 100, 250 both lose on day, gain over week

Permalink: FTSE 100, 250 both lose on day, gain over week

Filed under: Equities, Economy, UK

In London on Friday, the FTSE 100 dropped 0.7 percent to 6,228. This translated to a gain of 0.1 percent for the week. Meanwhile the FTSE 250 was down 0.5 percent on the day to 11,118.6, 0.4 percent higher over the week as a whole.

The tobacco sector was higher. BAT added 1.2 percent to £15.17, while Imperial Tobacco ended 2.6 percent higher to £21.06 as Citigroup said that BAT will likely get more return to shareholders both this year and next.

In the food and beverages sector, Cadbury Schweppes added 0.7 percent to 564p on new bids rumors that had private equity interested. US chocolate maker Hershey’s was also seen as a possible merger partner after its less-than-spectacular report earlier in the week.

The leisure sector was also hit by merger talk surrounding Rank Group, which gained 1.6 percent to 226½p.

Miners were lower on the day, with Xstrata the biggest loser among blue-chip stocks as it dropped 3.2 percent to £23.47. The pharmaceuticals sector was also down, with Shire falling 1.6 percent to £10.81 on a downgrade from Citigroup.

Among banks, Lloyds TSB was 0.3 percent lower to 583½p even though HSBC issued an increased recommendation, from “neutral” to “overweight”, and set a target share price of 630p.

Nokia adds 7.4 percent on week

Permalink: Nokia adds 7.4 percent on week

Filed under: Equities, Economy, Europe

The FTSE Eurofirst 300 ended the week 0.5 percent lower than it began, closing at 1,512.70 on Friday. The declines came after posting a six-year closing high on Wednesday.

This is not to say that there were not individual gains on the week. Mobile phone manufacturer Nokia added 7.4 percent on the week to €16.65 on a significant rise in operating profits in 2006. Deutsche Bank upgraded the company to “buy” and raised its target share price to €18.50.

L’Oreal was 7 percent higher to €80.60 after sales were higher than had been expected in the fourth quarter.

Pernod-Ricard gained 7.7 percent during the week to €158 even though broker comments were mixed. Credit Suisse upgraded the drinks company from “under perform” to “neutral” and raised its revenue growth guidance and target share price. UBS, Morgan Stanley, and ING also upped Pernod’s target share price, but ING also reduced its recommendation from “buy” to “hold”, citing valuation concerns.

Among the losers this week was software company SAP, which dropped 5.8 percent to €35.62. Alcatel-Lucent was 10.8 percent lower to €9.99. Airlines also saw losses, with Lufthansa down 6.9 percent to €21.16 and Air France-KLM 7 percent lower to €32.19.

January 25, 2007

Existing home sales down 0.8 percent in December

Permalink: Existing home sales down 0.8 percent in December

Filed under: Equities, Economy, US

Even though more corporations issued positive quarterly reports, Wall Street was lower at midday on Thursday. The Dow Jones Industrial Average was 0.4 percent lower to 12,570.66, while the Nasdaq Composite was down 0.7 percent to 2,449.10 and the S&P 500 had dropped 0.57 percent to 1,431.92. The Russell 2000 index of small-caps dropped 0.82 percent to 787.55.

Investor sentiment was not helped by a new report from the National Assoication of Realtors that existing homes sales dropped by 0.8 percent in December. The inventory of existing homes for sale also fell, however, by 7.9 percent to 3.51 million. In addition, the Labor Department said that new jobless claims grew last week at their highest rate in 16 months.

Quarterly reports were released by companies in a number of sectors. Online auctioneer Ebay added $2.88 to $32.88 after it said its profits were up by 24 percent and sales grew by 29 percent in its most recent quarter. Nokia reported that profits were up by 19 percent, gaining 79 cents to $21 on the session so far. AT&T gained 26 cents to $36.89 on profits that were up 17 percent on more wireless subscribers.

Even though Ford Motor said it withstood its largest annual loss ever amid declining sales, the carmaker added 10 cents to $8.30 as investors were relieved that the news wasn’t worse.

Lockheed Martin added 81 cents to $91.95 on a quarterly report that showed earnings up by 28 percent on growth in its military hardware division. The defense contractor raised its full-year forecast on the basis on the new figures.

UK real estate sector up on broker comments

Permalink: UK real estate sector up on broker comments

Filed under: Equities, Economy, UK

The FTSE 100 dropped 0.6 percent to 6,269.3 in London on Thursday, while the FTSE 250 was 0.2 percent lower to 11,171.1. The 100 briefly reached a six-year high, at 6,335.1, early in the session but dropped later on the slow start in the New York markets.

Real estate was higher on the session after JP Morgan reminded that the UK sector is currently a better bargain than its European rivals. Hammerson added 0.2 percent to £15.03, while British Land was 0.6 percent higher to £16.21.

Publisher Pearson added 0.9 percent to 817½p on bids rumors and after Citigroup upped its target share price to 900p.

The pharmaceuticals sector declined after Credit Suisse said that the sector would extend its underperformance into this year after a sector-wide decline of 5.2 percent last year, mentioning the trouble companies were having bringing new drugs to market and keeping them there once introduced. Shire dropped 1 percent to £10.99, while AstraZeneca fell 1.3 percent to £28.44 and GlaxoSmithKline was 1.4 percent lower to £13.93.

In a related news, medical devices manufacturer Smith & Nephew was 1.4 percent lower to 570½p after it was suggested that its next report might not show as much of an improvement in margins as is hoped.

Semiconductors gain in Europe

Permalink: Semiconductors gain in Europe

Filed under: Equities, Economy, Europe

The FTSE Eurofirst 300, higher early in the session, ended 0.3 percent lower to 1,522.87. The Eurofirst was hurt late by a slow start to the New York trading day.

The semiconductors sector saw gains in the day. Infineon added 2.4 percent to €11, while STMicroelectronics gained 2.5 percent to €14.38. STM was helped by positive comments from brokers that took the focus off the chipmaker’s disappointing quarterly results, announced on Wednesday. WestLB said that the new figures should be looked at in a wider context and hiked STM’s target share price from €16 to €18.

Nokia added 5 percent to €16.26 after reporting record mobile phone sales in the fourth quarter and amid mixed broker sentiment. While Merrill Lynch is advising its customers to buy the cell phone maker, Dresdner Kleinwort is recommending that its clients sell the stock.

Automobile manufacturers declined on new of losses by Ford Motor. BMW fell 1.4 percent to €45.99. DaimlerChrysler and Porsche were each 2.3 percent lower, to €48.64 and €1,010 respectively, with Credit Suisse lowering Porsche’s rating from “outperform” to “neutral” and suggesting that investors take profits. Peugot was down 3.3 percent to €52.

Airlines also saw losses. Iberia fell 1 percent to €3.01, while Air France-KLM dropped 3.9 percent to €32 and Lufthansa was 5.6 percent lower to €20.76 after it said that passenger yields would not grow significantly this year.

Nikkei 225 drops 0.3 percent on stronger yen

Permalink: Nikkei 225 drops 0.3 percent on stronger yen

Filed under: Equities, Economy, Asia, Japan

In Tokyo on Thursday, the Nikkei 225 dropped 0.3 percent to close at 17,485.30 as the yen strengthened after recent weakness. The decline came after the index achieved another six-year high early in the session. Despite this, many analysts believe that advances will be limited this year due to shares that they believe are too highly valued at present.

Some export-focused stocks were hurt by the currency’s gains. Printer and copier maker Canon fell 1.2 percent to ¥6,530. But not all exporters declined on the session. Helped by good results in tech stocks in the US, Sony added 1.6 percent to ¥5,720.

There were gains in the pharmaceuticals sector. Chugai Pharmaceutical added 6.5 percent to ¥2,715 after it announced, along with partner Roche, that studies for its new rheumatoid arthritis drug were proceeding well.

Shipper were higher after positive comments from Mizuho Securities. Mitsui OSK Lines was 1.1 percent higher to ¥1,264, while Kawasaki Kisen gained 1.15 percent to ¥1,053.

Yahoo Japan, up 1.05 percent to ¥48,250, reported that its quarterly profits were up by 20 percent.

The real estate sector, which has added more than 40 percent since last July, continued to rise even though some analysts believe that stocks are currently overvalued. Mitsui Fudosan added 1.6 percent on the session to ¥3,100.

January 24, 2007

Aetna drops 47 cents after president’s proposal

Permalink: Aetna drops 47 cents after president’s proposal

Filed under: Equities, Economy, US

Wall Street was up at midday on Wednesday, with the Dow Jones Industrial Average 0.32 percent higher to 12,573.46, the Nasdaq Composite up 1.09 percent to 2,457.80, and the S&P 500 adding 0.41 percent to 1,433.79. Positive earnings reports from both Yahoo and Sun Microsystems helped the gains, while the previous evening’s State of the Union address from President George W. Bush didn’t seem to have much impact at all on investors’ activities.

After Mr. Bush proposed an expansion in health care coverage in the speech last night, health benefits insurer Aetna dropped 47 cents to $41.71. In a related sector, drug maker Pfizer added 22 cents to $26.59.

ExxonMobil dropped 22 cents to $74.26 after an announcement of higher crude oil, gasoline, and distillate inventories again last week. Alternative energy producers were lower as well, after posting gains before the president’s address. Ethanol maker Xethanol Corp. dropped 17 cents to $2.90, while Archer Daniels Midland fell $1.06 to $31.57.

Sun Microsystems added 43 cents to $6.09 after increased revenues gave the manufacturer of server and storage products its first quarterly profit in several years. Meanwhile, Yahoo gained $2.03 to $28.99 on fourth quarter profits that were higher than had been anticipated. But Advanced Micro Devices dropped $1.39 to $16.12 reported losses in the fourth quarter, which were blamed on flat sales of server chips.

FTSE 100 adds 1.4 percent on session

Permalink: FTSE 100 adds 1.4 percent on session

Filed under: Equities, Economy, UK

Both the FTSE 100 and the FTSE 250 were higher on Wednesday. The 100 added 1.4 percent to 6,314.8, its highest close since January 3, while the 250 was 0.8 percent higher to 11,192.8.

The oil sector gained on the announcement that the United States plans to double the size of its strategic oil reserves by buying an extra 100,000 barrels of crude oil per day, as well as on a report that Dominion Resources, a US company, had received a bid. BP added 0.6 percent to 548½p, while Royal Dutch Shell gained 1.2 percent to £17.39.

Banks were up as well. Alliance & Leicester was 2.6 percent higher to £11.11, while Royal Bank of Scotland gained 2.9 percent to £21.03 and Northern Rock added 4.1 percent to £12.12 on higher profits than expected and record mortgage lending.

In the mining sector, Kazakhmys added 4.8 percent to £11.19 on a positive broker recommendation. Vedanta Resources was 5.8 percent higher to £11.90 on takeover rumors.

Properties groups benefited after the most recent Bank of England meeting minutes were revealed, showing that the vote was very close on the interest rate hike earlier this month. The closeness of the vote brought hope that interest rates would not be going up again soon, a positive sign for the properties market. British Land added 2.9 percent to £16.12, while Liberty International gained 4.4 percent to £13.18.

European banks in gains

Permalink: European banks in gains

Filed under: Equities, Economy, Europe

The European equities markets were higher on Wednesday, aided by gains in the banking and oil sectors. The FTSE Eurofirst 300 added 1 percent to 1,528, its highest closing level in six years.

In the oil sector, Statoil gained 1.6 percent to NKr163.50 on comments from UBS that outlined the upside of an announced merger with Norsk Hydro. The broker upgraded its recommendation on Statoil from “neutral” to “buy” and hiked its target share price from NKr166 to NKr185.

Banks saw gains in several nations. In Spain, JP Morgan issued upgrades for both BBVA and Santander. BBVA added 1.4 percent to €19.35 after its recommendation was raised from “neutral” to “overweight”, while Santander was 2.3 percent higher to €143.49 on an identical hike in its rating.

In Italy, Morgan Stanley upgraded both Banca Monte dei Paschi di Siena and Capitalia from “underweight” to “equal weight”. Siena was up 0.7 percent to €4.9525 and Capitalia gained 2.3 percent to €7.02. Meanwhile, the broker added Banco Popolare di Verona e Novara to its model portfolio, sending the bank’s shares up 3.1 percent to €24.10.

Meanwhile, UniCredit’s announcement that it will buy out minority shareholders in German bank HVB Group and Bank Austria Creditanstalt send shares in both banks significantly higher. HVB gained 4.2 percent to €36.00, while Bank Austria was 4.7 percent higher to €131.50. UniCredit, which already owns 95 percent of both banks, was up 1.6 percent to €7.2050.

Among losers on the day was SAP. The software maker dropped 6.5 percent to €35.89 when it said that margins would be lower this year and failed to issue an outlook on license sales.

January 23, 2007

US banking sector mixed

Permalink: US banking sector mixed

Filed under: Equities, Economy, US

Wall Street saw gains at midday on Tuesday, with the Dow Jones Industrial Average up 0.35 percent to 12,520.91, the Nasdaq Composite 0.41 percent higher to 2,441.12, and the S&P 500 adding 0.34 percent to 1,427.75. The Russell 2000 index of small-caps was up even more, gaining 1.01 percent to 785.82. Volume at mid-session was at 712.8 million shares.

The banking sector was mixed. Bank of America was 40 cents lower to $53.25 even though it said its loan business was up and that its purchase of credit-card company MNBA helped profit in the fourth quarter. Wachovia was up , but only by 4 cents to $56.3 even though issued a better than anticipated report.

In the oil sector, higher prices due to forecasts of colder weather sent Chevron up 97 cents to $72.21, while ExxonMobil gained $1.12 to $74.03 and ConocoPhillips added $1.41 to $64.78.

Telecommunications equipment makers saw declines. Tellabs was 4 cents lower to $10.06, while Alcatel-Lucent fell $1.17 to $13.03. Alcatel-Lucent blamed its inability to make a profit in its first quarter after consolidation on integration costs and weak sales.

In the semiconductors sector, Texas Instruments added $1.17 to $29.76 on a positive quarterly report and several broker upgrades.

Even though it reached analysts’ expectations, chemicals company DuPont dropped $1.23 to $48.87 on concerns about the higher cost of raw materials.

UK oil sector gains on bids rumors

Permalink: UK oil sector gains on bids rumors

Filed under: Equities, Economy, UK

Equities markets were mixed in London on Tuesday. The FTSE 100 added 0.6 percent to 6,227.6, while the FTSE 250 fell 0.6 percent to 11,102.2.

Oil companies were higher on takeover rumors, as it was said that either Royal Dutch Shell or BP could be interested in bidding on BG Group. Shell added 0.6 percent to £17.18, while BP gained 0.7 percent to 545p and BG Group was 1.7 percent higher to 662½p.

Supermarkets were also higher on the session. Wm Morrison was up 0.1 percent to 284p on positive comments from Deutsche Bank, which reconfirmed its “buy” recommendation and target share price of 320p. Elsewhere in the sector, Tesco gained 0.3 percent to 415¼p, while J Sainsbury added 0.8 percent to 438p on talk that private equity has approached with a bid.

In other retail news, magazine and bookseller WH Smith gained 5.6 percent after it issued a positive trading statement.

Among makers of medical devices, Smith & Nephew was 2.3 percent higher to 566¾p after it announced a special dividend and held out the possibility of more cost cutting measures. Goldman Sachs said that the company, thought to be a possible bid target from private equity, would forestall such a bid. Elsewhere in the sector, Gyrus added 1.1 percent to 406¾p.

Luxury watchmakers mixed on sales

Permalink: Luxury watchmakers mixed on sales

Filed under: Equities, Economy, Europe

In Europe on Tuesday the FTSE Eurofirst 300 was nearly steady, losing only 0.21 points to end the session at 1,513.31 as big losses for Alcatel-Lucent balanced gains in other sectors.

Alcatel-Lucent dropped 8.5 percent to €10.02 after having lost as much as 12 percent in earlier trade. The manufacturer of telecommunications equipment issued a profits and revenues warning for the fourth quarter. The company said adjusted revenues will be around €4.4 billion, significantly lower than last year’s €5.25 billion. Operating revenues, which were expected to show a profit of €539 million will, the company said, manage to just break even.

The automobile and truck manufacturing sector saw gains when German truck maker MAN said it will abandon its hostile takeover bid for Scania and instead try to negotiate a friendly merger. Scania’s B shares added 1.1 percent to SKr645 after dropping as low as SKr441 earlier in the session, while MAN gained 2.3 percent to €75.79. Volkswagen, which is the largest shareholder in both Scania and MAN, was 0.4 percent higher to €84.67.

In the media sector, Dutch television producer Endemol ended the session 1.6 percent higher to €20.65. Its share price was as high as €22.74 after it was reported that Rupert Murdoch’s News Corp. wanted to purchase the 75 percent stake of Endemol that Telefonica owns, but pulled back to its closing level after News Corp denied the rumors.

Luxury goods makers were mixed. Despite reporting a 10 percent gain in sales in the quarter, Richemont dropped 3.6 percent to SFr70. Swatch, on the other hand added 1.8 percent to SFr292.75.

Steel sector gains in Tokyo

Permalink: Steel sector gains in Tokyo

Filed under: Equities, Economy, Asia, Japan

The Tokyo equities markets saw very little movement on Tuesday. The Nikkei 225 was lower, but only by 0.1 percent to 17,408.57, while the Topix index held steady at 1,730.76.

Steelmakers were higher on the session, protecting the markets from losses in other sectors. Tokyo Steel Manufacturing added 3.2 percent to ¥1,755 an the announcement that it will increase the prices it charges for its products. Nippon Steel gained 4.3 percent to ¥695, its highest share price in 16 years, helped by an earlier hike it its target share price, from ¥600 to ¥760, by UBS. The broker said that the target was raised due to increased demand for high-grade steel.

The construction sector saw declines as a bids-rigging scandal continued to unfold with searches of the offices of several companies. Obayashi dropped 2.3 percent to ¥733, while Shimizu fell 3.2 percent to ¥612 and Kajima was 3.7 percent lower to ¥544.

Banks and the real estate sector both were lower as investors took profits. The banking sector dropped 0.4 percent, with Mitsubishi UFJ falling 1.3 percent to ¥1,530,000. Meanwhile, the real estate sector was 1.1 percent lower with Mitsubishi Estate down 0.9 percent to ¥3,360 and Mitsui Fudosan 1.3 percent lower to ¥3,080.

January 22, 2007

Philadelphia semiconductors index drops 1.5 percent

Permalink: Philadelphia semiconductors index drops 1.5 percent

Filed under: Equities, Economy, US

The New York equities markets were lower on Monday on interest rate concerns, as well as on investor reaction as companies begin to release their quarterly reports. At midday, the Dow Jones Industrial Average was 0.8 percent lower to 12, 463.87, while the Nasdaq Composite dropped 1 percent to 2,427.37 and the S&P 500 fell 0.6 percent to 1,422.24.

The semiconductors sector was lower, sending the Philadelphia semiconductor index down by 1.5 percent and hurting the Nasdaq. After a report that Sun Microsystems is thinking about using chips from Intel as well as from Advanced Micro Devices, Intel dropped 0.1 percent to $20.84, while AMD fell 2 percent to $17.37. Sun added 0.1 percent to $5.78.

The Dow was hurt after Boeing dropped 3.3 percent to $85.69 after Wachovia reduced its recommendation on the aircraft manufacturer from “outperform” to “market perform”. The Dow also suffered after pharmaceutical company Pfizer fell 1.4 percent to $26.83 after it released its earnings report, which was helped by the sale of its consumer health unit to Johnson & Johnson for $16.6 billion in December.

Citigroup, also listed on the Dow, added 0.9 percent to $54.98 on the announcement that it will purchase ABN Amro’s mortgage division for around $3 billion. In addition, the bank said that its chief financial officer will leave that position to take the post as chairman and chief executive of its global wealth management division.

Eurofirst declines by 0.4 percent

Permalink: Eurofirst declines by 0.4 percent

Filed under: Equities, Economy, Europe

In Europe on Monday, the FTSE Eurofirst 300 dropped 0.4 percent on the session to close at 1,525.97 after being unable to hold on to gains earlier in the day.

In the automobile manufacturing sector, DaimlerChrysler was 0.6 percent lower to €48.51 despite an upgrade of its target share price from €50 to €55 from JP Morgan. The broker’s move was prompted by the belief that the carmaker could announce a plan to return Chrysler to profit when it announces results next month.

In the electronics sector, Philips Electronics fell 1.7 percent to €28.88 on mixed results in the fourth quarter. According to the report, net profits were higher than had been anticipated on lower tax rates and one-time gains. Sales, however, did not meet expectations. Philips also raised its dividend for 2006.

Gains in oil prices led to losses in a couple of sectors. Lufthansa dropped 3.2 percent in the airlines sector. Meanwhile, in the chemicals sector, agrochemicals manufacturer Syngenta was down 2.8 percent to SFr233, while Rhodia fell 3.5 percent to €2.80.

Among producers of luxury goods, Swatch added 2 percent to SFr287.50 on the announcement that its sales were up by 12.3 percent in 2006. Broker comments were positive, with Lehman Brothers and Credit Suisse reiterating recommendations of “overweight” and “outperform” respectively. Credit Suisse said its target share price on the watchmaker, currently SFr300, was under review, while Lehman Brothers upped its target share price for the company from SFr270 to SFr315.

In the banking sector, Raiffeisen International added 3.7 percent to €113.64 on raised target share prices from Merrill Lynch and Morgan Stanley as optimism continued in relation to the bank’s business interests in Russia and in eastern Europe. Merrill Lynch upped Raiffeisen’s targets share price to €140, while Morgan Stanley set raised its target for the bank to €83.80, citing the possibility that investors might be putting too much emphasis on its Russian exposure.

Tokyo markets gain despite scandals in two sectors

Permalink: Tokyo markets gain despite scandals in two sectors

Filed under: Equities, Economy, Asia, Japan

In the Tokyo equities markets on Monday, the Nikkei 225 ended the trading session at 17,424.18, a gain of 0.7 percent to its highest close in nine months. Meanwhile, the Topix index added 0.9 percent to 1,730.33.

Two corporations dropped significantly due to scandals. Construction company Obayashi dropped 5.3 percent to ¥750 after a raid by government prosecutors due to accusations that it was one of several companies suspected to engaging in bids-rigging in connection with an extension of the underground rail system in Nagoya. The construction sector as a whole was weathering the scandal fairly well, however, falling just 0.4 percent on the session.

In the other scandal, bookseller Maruzen was 8.4 percent lower to ¥197 after it said it would have to report an extraordinary loss of ¥800 million this year to compensate for several years of bookkeeping irregularities.

The pharmaceuticals sector added 1.2 percent as a whole as investors continued to hope for more consolidation in the sector after last week’s announcement that Tanabe Seiyaku and Mitsubishi Pharma, a division of Mitsubishi Chemical were in talks toward a merger. Results were mixed within the sector however, with Mitsubishi Pharma adding 0.7 percent to ¥813 but Tanabe down 0.1 percent to ¥1,671.

Banks were helped by news from consumer credit company Aiful that it will cut approximately 1,300 jobs and reduce the size of its branch network by half. The banking sector was 2.2 percent higher as a whole, with Mitsubishi UFJ adding 2.6 percent to ¥1,550,000. Aiful ended the session up by just 0.2 percent to ¥4,030.

January 19, 2007

Dow drops at midday

Permalink: Dow drops at midday

Filed under: Equities, Economy, US

Wall Street was mixed at midday on Friday as some quarterly reports failed to inspire investors. The Dow Jones Industrial Average was 0.21 percent lower to 12,541.50, while the Nasdaq Composite had added 0.04 percent to 2,444.11 and the S&P 500 was 0.11 percent higher to 1,427.87.

IBM dropped $3.82 to $95.63 even though it reported profits that were better than anticipated in the fourth quarter. A portion of the increase in profits was due to a change in IBM’s tax rates. Meanwhile, General Electric dropped 79 cents to $37.21 on disappointing results in its fiscal first quarter.

Citigroup also saw declines, with its share price dropping 34 cents to $54.05 due to a 26 percent decrease in profits in the fourth quarter.

Motorola added 67 cents to $19.38. It had warned in January that its fourth quarter profits would not meet expectations due to discounts on mobile phones. And, indeed, its earnings were lower, but turned out to be better than the warnings had led investors to expect.

Mergers and acquisitions also played into the days results. Morgan Stanley added 55 cents to $81.76 after its real estate unit said it would buy hotel real-estate investment trust CNL Hotel & Resorts, spending $3.13 billion on the transaction. Abbott Laboratories added 61 cents to $53.40, its highest share price in a year, after it said it will sell part of its medical testing division to General Electric.

European construction sector sees gains

Permalink: European construction sector sees gains

Filed under: Equities, Economy, Europe

The FTSE Eurofirst 300 closed at its highest level in six years when it added 0.6 percent on Friday to end the session at 1,519.81.

The week saw big gains in more than one sector. Deutsche Borse added 10.4 percent on the week to a record share price of €164.30, with one analyst saying that estimates of the stock exchange operator’s earnings growth for the year, at 10 percent, were conservative.

In the construction sector, consolidation possibilities brought big advances. The news that holding company Artemis had purchased a 5.1 percent stake in French company Vinci sent Vinci’s shares 8.4 percent higher to €104.90. In Spain, meanwhile, Sacyr-Vallehermoso added 10.2 percent to €48.32.

Deutsche Post gained 7.2 percent on the week to €23.98 on rumors that a private equity group was looking to buy at least part of the 30.6 percent stake owned by the German government, despite predictions of union and political opposition to such a bid.

In the Swedish banking sector, Nordea added 2.2 percent to SKr110.60 and SEB gained 7.5 percent to SKr237.00 on renewed rumors that the two banks could merge.

On the negative side, EADS dropped 2.7 percent during the week, to €24.39, after the aerospace firm issued its second profits warning in four months. In the French energy sector, Suez was 5.8 percent lower to €38.01 after a withdrawn bid for the company, while Gaz de France dropped 6 percent to €33.73.

Semiconductors decline in Tokyo

Permalink: Semiconductors decline in Tokyo

Filed under: Equities, Economy, Asia, Japan

The Tokyo equities markets were lower on Friday, with the Nikkei 225 down 0.4 percent to 17,310.44 and the Topix index 0.1 percent lower top 1,714.21. The exception was the Mothers index of small and mid-cap stocks, which added 5.9 percent to 1,247.00 after a 4 percent gain on Thursday.

The semiconductors sector was lower, with Tokyo Electron dropping 2.5 percent to ¥8,940. Advantest fell 3.5 percent to ¥6,290. They were affected by quarterly reports from US companies in the sector.

Banks were also lower on the session, with the sector as a whole lower by 1.1 percent in the wake of Thursdays decision by the Bank of Japan to hold interest rates at 0.25 percent. The banks could have benefited if rates had been increased, with the possibility that their loan margins might have gone up. Mizuho Financial was 0.7 percent lower to ¥890,000, while Mitsubishi UFJ dropped 1.3 percent to ¥1.51 million.

Consumer finance companies, on the other hand, saw gains, with Aiful up 4.4 percent to ¥4,020. The sector was not looking forward to an interest rate hike, which would have increased their funding costs.

The real estate sector also saw gains, with a 2.3 percent advance for the whole sector. Mitsui Fudosan added 1.7 percent to ¥3,060, while Sumitomo Realty & Development was 4.1 percent higher to ¥4,080.

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