US & World Daily Markets Financial Briefing 02-03-2006

U.S. stocks lose ground on retail worry, higher oil

NEW YORK - U.S. stocks lost ground Thursday, hurt by a fresh spike in crude-oil prices and mixed sales performances from the nation's retailers in February.
   
A missed interest payment by auto-parts supplier Dana Corp. also unnerved
investors.
   
The Dow Jones Industrial Average fell 47 points to 11,006.
   
The Nasdaq Composite Index was down 7 points at 2,307 while the S&P 500 Index dropped 6 points to 1,285.
   
"We had a huge up day yesterday, but today we're reexamining Google and technology, and that combined with retail sales that were not blow away," is taking the market lower, said Jim Awad, chairman of Awad Asset Management. "And on the margins, oil is not helpful."
   
Google Inc. shares were off less than a dollar at $363.97 ahead of its analysts' day.
   
On the broader market for equities, decliners outpaced advancers by 9 to 5 on the New York Stock Exchange, and by 3 to 2 on the Nasdaq.
   
By sector, utilities, banks, retailers and networkers were some of the notable decliners.
   
Initial applications for state unemployment benefits rose by 15,000 to 294,000 in the week ended Feb. 25, the Labor Department reported. The four-week average of continuing claims, however, dropped to a five-year low -- a sign say economists that the labor market's still strengthening.

Retailers in focus
   
Retailers put in a choppy performance in February, with a number attributing weak same-store results to the heavy snowstorm that affected the Northeast.
   
Among the discount retailers, blue chip Wal-Mart Stores Inc. said sales at stores open longer than a year, a key industry measure known as same-store sales, rose by 3.2% from a year ago, driven by strong sales of food and consumables. The figure was just slightly ahead of the 3.1% average increase forecast by analysts reporting to Thomson First Call.
   
The world's largest retailer, however, warned March same-store sales could come in weaker because Easter is three weeks later than last year.
   
Separately, the company said its board approved an increase of 11.7% in its annual dividend to 67 cents a share from 60 cents a share. Wal-Mart was last up
19 cents at $45.34.
   
Rival Target Corp. put in a better monthly performance, posting a 3.6% rise in February same-store sales. The stock was off 56 cents at $54.01.
   
It was not all good news. Gap Inc. said same-store sales fell 11% in February. The San Francisco-based clothing retailer said traffic worsened during the month versus fourth-quarter trends, which caused "lower unit sales velocity" and led to significantly lower merchandise margins. The stock was off 1.9% at $18.30 in morning trading.
   
It was a more difficult month for retailers specializing in teen fashions. Hot Topic and Aeropostale both reported a decline in same-store sales, but Wet Seal Inc. and Guess Inc. managed to post same-stores sales that surprised on the upside.

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 for yourself the difference they will make in your trading. Click here to see two recent forecasts now.

Outside of retailers, Ciena Corp. narrowed its loss in the first quarter. The optical networking company also said an increase in orders "in recent weeks" could boost second-quarter sales by 7% compared to the prior quarter, somewhat higher than Wall Street's expectations.
   
Ciena's stock was off 0.9% at $4.31 after gaining more than 8% in the prior session.
   
Dana saw its shares tumble 25% to $1.38 after the auto-parts maker failed to make $21 million in interest payments on its debt. The company said it has a 30-day grace period.
   
Dana's troubles were hurting the automobile sector. General Motors Corp. was down 2.4% at $19.42, Ford Motor Co. fell 1.8% to $7.81, DaimlerChrysler was off 2% at $55.47 while car parts maker Visteon Corp. tumbled 9.7% to $4.28.

Forex

Euro edges up as Trichet signals more interest rate hikes

LONDON - The euro edged higher after European Central Bank chief Jean-Claude Trichet signalled that interest rates in the 12-nation single currency zone will have to rise further.
   
His comments came after the ECB delivered a much expected quarter-point rate hike, taking the benchmark rate to 2.50 pct.
   
Among his more pointed comments in the news conference following the rate decision, was his pronouncement that at 2.50 pct, monetary policy remains accommodative. Additionally, he stressed that the overall growth in the euro zone is strengthening and warned of inflationary pressures.
   
"Although he refused to comment on market expectations for a June rate hike, it is clear from his comments that the door remains open for further rate hikes, with a hike in June remaining highly likely," said Mitul Kotecha at CALYON.
   
As things stand, players expect the ECB's benchmark refi rate to reach 3.00 or 3.25 pct by year-end.
   
If recent economic indicators are anything to go by, there is indeed scope for more rate hikes. After all, numbers raging from the industrial sector through to consumer spending have picked up across the euro zone's major economies.
   
The decidedly hawkish tone helped the euro edge up on the lacklustre dollar and the pound which still faces the possibility of lower borrowing costs in the coming months.
   
Elsewhere, the yen was steady ahead of crucial Japanese inflation numbers due out tomorrow. The data will show if the plague of deflation has finally ended to open the way for monetary tightening from the Bank of Japan. The central bank has vowed to maintain its ultra-loose monetary policy until the national core CPI posts steady gains.
   
The dollar was on the backfoot in what can only be described as a lacklustre session. At the margins, the steep rise in US weekly jobless claims weighed on the US currency.
   
For the week ending Feb 25, initial jobless claims rose by 15,000 to 294,000, above expectations of a more modest rise to 287,000.
   
Sterling also put in a weak performance, particularly against the euro as the interest rate gap between the two areas are predicted to grow over the next few months.
   
In the euro zone, interest rates are set to rise while in the UK, there is still a chance that borrowing costs will have to be reduced as overall GDP growth disappoints.

The euro was last up 0.6% at $1.1987. Against the Japanese yen, the greenback pared early gains to trade little changed at 116.04.

HotSignals.com Inc to be featured on World Business Review for Innovative Financial Trading Technologies, hosted by Alexander Haig with industry expert Al Berkeley (Former President of Nasdaq). Explore Hotsignals, simple yet effective scanning technology here. Example: Short 18th January on GOOG at $444.91

The European Markets at 12.00 GMT

London - Leading shares remained in positive territory in midday trade, with the financial services sector leading the way following strong results from Standard Chartered and Aviva, dealers said.
   
At 12.05 pm, the FTSE 100 was up 18.6 points at 5,862.7, with the broader indices all higher.

Frankfurt - Shares were lower in midday trade on profit-taking following yesterday's solid gains and as results from Adidas-Salomon and comments on a lack of union support for Volkswagen's CEO dampened sentiment, though Deutsche Telekom gained as the market cheered its figures, dealers said.
   
At 11.41 am, the DAX 30 index was 21.74 points or 0.37 pct lower at 5,844.87, having moved between 5,833.63-5,885.73 so far this session.

Paris - Share prices were slightly down at midday, falling back after a bullish opening, with LVMH soaring after it posted strong FY results and made confident 2006 predictions, dealers said.
   
At 12.11 pm the CAC-40 index was down 6.84 points or 0.14 pct at 5,050.77.
   
Amsterdam - Share prices were slightly lower in early afternoon trade, with Getronics nosediving after unveiling a bigger-than-expected loss at its troubled Italian operations, dealers said.
   
At 1.29 pm, the AEX was down 0.91 point or 0.20 pct at 460.79, after opening at 462.57, reaching a high of 463.99 and falling to a low of 459.70.

Milan - Share prices were slightly lower amid across-the-board profit-taking, while Finmeccanica and second-liner Tenaris bucked the weak trend following well-received full-year results, dealers said.
   
At 1.12 pm, the Mibtel index fell 0.22 pct to 28,878 points and the S&P/Mib was down 0.47 pct at 37,633, while volumes stood at 1.93 bln eur.

Madrid - Share prices were lower in moderate midday profit taking after recent sharp gains, with most blue chips lower, while Union Fenosa outperformed on bid speculation and Telecinco was higher on positive newsflow, dealers said. 
   
At 1.15 pm, the IBEX-35 index was up 39.3 points at 11,862.9, after trading in a range of 10,839-11,918, on turnover of 1.5 bln eur.

Stockholm - Share prices remained in slightly positive territory in midday trade, with engineering and steel issues in demand after strong performance for the sectors in the US overnight, dealers said.
   
At 12.30 pm, the OMX Stockholm index was up 0.38 pct at 322.65, while the OMX Stockholm 30 index was up 0.35 pct at 1,009.56. Turnover was 7.57 bln skr.

Helsinki - Share prices were broadly higher in midday trade, led by Nokia on its stronger ADR price in New York last night, and by Neste Oil and Fortum amid a fresh spike in crude oil prices, dealers said.
   
At 12.13 pm, the OMX Helsinki 25 index was 0.29 pct higher at 2,587.42 points. The OMX Helsinki index was up 0.56 pct at 8,951.34 points, while the Helsinki CAP portfolio index was 0.41 pct higher at 4,850.40 points.

Athens - Share prices were little changed in midafternoon trade, off early lows, with gains by ATE Bank and telecoms offset by losses by Pireaus Bank, brokers said.
   
At 2.05 pm, the ASE general index was little changed at 4,125.9 with decliners outnumbering advancers 101 to 89.

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

Asian shares close mixed, Tokyo slips on caution ahead of inflation data

HONG KONG - Share prices across the Asia-Pacific region closed mixed with Tokyo weaker as investors turned cautious ahead of January inflation data due out tomorrow, dealers said.
   
Nationwide, core consumer prices are expected to have risen for a third month in a row, adding to speculation that the Bank of Japan will soon lift its super-loose monetary policy, possibly in April.
   
Stock investors fear an end to the policy, which was put in place about five years ago. The Bank of Japan has kept interest rates at close to zero for several years by flooding the financial markets with cash in a bid to defeat deflation and spur economic growth.
   
The blue-chip Nikkei 225 Stock Average closed down 54.70 points or 0.3 pct at 15,909.76, after touching a low of 15,879.71.
   
The broader TOPIX index of all first-section issues shed 3.36 points or 0.2 pct to 1,632.24, off a low of 1,630.41.
   
"Share prices got off a firmer start as investors took comfort from the rally on Wall Street but caution ahead of upcoming CPI data emerged to snuff out the early market gains," said Yutaka Miura, senior strategist at Shinko Securities.
   
Share prices in Australia finished higher as investors re-entered the market in search of bargains after a two day sell-off, dealers said.
   
They said buying was broad, helped by gains on Wall Street while higher oil and gold prices gave the resources sector a boost.
   
But they said the market was unable to recover all of the losses recorded over the two previous sessions with the performance of key indices held back by a number of key blue chip stocks trading ex-dividend.
   
The S&P/ASX 200 rose 53.2 or 1.1 pct to close at 4,903.8 after dropping 70.7 points yesterday.
   
Share prices in Hong Kong were trading higher following a rebound on Wall Street overnight after sharp falls Tuesday, dealers said.
   
Property firms led the gains as many developers revealed plans to launch fresh sales of apartments soon, they said.
   
At 3:39 pm, the Hang Seng Index was up 26.63 points or 0.17 pct at 15,844.72.
   
In mainland China, A-shares in Shanghai and Shenzhen closed sharply lower as institutional investors cashed out of market heavyweight banks and petrochemical producers, dealers said.
   
The Shanghai A-share Index fell 21.97 points to 1,348.49 on turnover of 14.47 bln yuan and the Shenzhen A-share Index was down 4.57 points at 323.66 on turnover of 8.12 bln yuan.
   
Share prices in Seoul ended slightly lower as foreign investors ignored positive leads from Wall Street and continued to unload major blue chips, dealers said.
   
Mild consumer price growth in February and solid monthly sales reported by local carmakers added to the momentum from Wall Street's rally but those positives turned out not to be strong enough for foreign investors, they added.
   
The KOSPI index closed down 3.91 points or 0.28 pct 1,367.70.

How? He used a new trading system by a 15 year market veteran designed for swing trading and day trading.  In just hours 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 - 60 Day Money Back Guarantee

www.win-at-trading.com

Gold futures moved back and forth across the flatline in morning trading. The benchmark April contract was last down $1 at $564.80 an ounce.
   
On the bond market, long-term Treasury prices fell, sending yields higher, after a rate hike and hawkish rhetoric from the European Central Bank sparked concerns about euro-zone economic strength spilling over to the U.S.

The benchmark 10-year note was down 8/32 at 99 1/32, with its yield at 4.61% versus 4.59% in late trading Thursday.
   
In energy, crude futures edged higher, building on gains over the last two sessions, as news of a bombing in Pakistan ahead of President Bush's visit added to concerns about global oil supplies.
   
The benchmark April contract was up 73 cents at $62.70 in New York trading.

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$. Free quotes, charts, Demo Account. 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

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