US & World Daily Markets Financial Briefing 19-07-2007

The world's most trusted name in professional trader education. Click Here

Stocks rise amid earnings reports

NEW YORK - Wall Street moved sharply higher in early trading Thursday as investors, having gotten over a bout of economic jitters in the previous session, focused on mostly upbeat earnings reports.
   
Profit reports from companies like International Business Machines Corp., Honeywell International Inc., Bank of America Corp. and Continental Airlines Inc. helped send stocks higher. A strong showing from business software maker SAP AG appeared to help boost investors' appetite for technology issues.
   
Even with a crush of earnings reports to keep them busy, investors are still awaiting economic news. Federal Reserve Chairman Ben Bernanke returns to Capitol Hill for the second day of his semiannual report to Congress and the Fed is scheduled to release minutes from the June meeting of its Open Market Committee.

At the meeting, the central bank left short-term interest rates unchanged as it has done for the past year and reiterated its concerns about inflation.
   
Stocks appeared to be extending a partial recovery that started late Wednesday, when the Dow Jones industrial average pulled itself up from a loss of 134 points and ended with just a 53-point deficit.
   
In early trading Thursday, the Dow rose 95.52, or 0.69 percent, to 14.013.74. The blue chip index climbed above the 14,000 mark for the first time on Tuesday, though it did not close above that psychological benchmark.
   
Broader stock indicators rose Thursday. The Standard & Poor's 500 index advanced 8.88, or 0.57 percent, to 1,555.05, while the Nasdaq composite index rose 20.34, or 0.75 percent, to 2,719.83.

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

Dollar stays close to lows ahead of jobless claims data, FOMC minutes

LONDON - The dollar remained close to its all-time low against the euro ahead of a series of second-tier US data and the release of minutes to the Federal Reserve's June 28 rate decision.
   
The greenback has stayed on the back foot as markets interpreted yesterday's testimony by Fed chairman Ben Bernanke to congress as being relatively dovish.
   
Bernanke reiterated that inflationary pressures remain on the upside, but did say that problems in the sub-prime sector are likely to get worse before they get better. He added that there is a risk that a "prolonged downturn in the house sector could spill over into consumer spending".
   
"This is a significant change in tone from the Fed, where previously Bernanke and other Fed members had attempted to play down the problems in sub-prime, describing them as 'contained'," said analysts at BNP Paribas.   
   
Bernanke continues his testimony today, but is not expected to say anything significantly different to yesterday.   
    
There is no rate decision today, but markets will be keen to see if anyone from the ECB comments on the euro or monetary policy following the bank's strong rebuke yesterday to French European affairs minister Jean-Pierre Jouyet.
   
Jouyet had mentioned in a press interview the possibility the euro zone monetary policy decisions could be influenced by holding more frequent meetings between the ECB and finance ministers. ECB president Jean-Claude Trichet responded by saying any such influence would violate the EC treaty.
    
Elsewhere, the pound was down after softer-than-expected retail sales figures for the UK, hurt by the recent rises in borrowing rates and poor weather, eased the likelihood of a quick successive interest rate hike next month.
   
The Office for National Statistics reported June retail sales rose by 0.2 pct from May in seasonally adjusted terms, a slowdown from that month's 0.4 pct, and missing analyst expectations for an unchanged reading.
   
Annual growth was at its slowest in a year, reflecting the month's dismal weather and the increased burden on households' disposable incomes from higher interest rates.
       
The release of weaker-than expected money supply figures from the Bank of England also weighed on the pound.
   
The M4 measure of money supply rose by a monthly 0.8 pct in June, and by 13.0 pct year-on-year, below expectations for a 1.1 pct monthly rate and for a 13.4 pct annual gain.

Get your free futures starter kit metals, energies, grains, currencies, stock indexes, tropical softs, plus more! Click Here.

Euroshares up midday on bullish earnings updates, Wall St set for higher open

LONDON - At 12.12 pm, the Dow Jones STOXX 50 added 29.71 points or 0.76 pct to 3,955.00, while the STOXX 600 gained 2.89 points or 0.74 pct to 396.03.
   
In earnings news, SAP, which gained 4.79 pct, was one of the leading stocks today after the group presented stronger than expected second quarter results.  Net profit was 449 mln eur, compared to 415 mln a year earlier and well above the 403 mln eur consensus of analysts forecasts as software licence sales rose to 715 mln eur from 604 mln.
   
Deutsche Bank and Citigroup reiterated their 'buy' stances and maintained their price targets at 50 eur per share.   
    
CapGemini was up 3.75 pct after a report in the Times of India that Infosys could be interested in parts of the French group's consulting business. And LogicaCMG added another 4.04 pct after its interims yesterday. UBS upped the stock this morning to 'buy' from 'neutral' and SG Secs upgraded LogicaCMG to 'hold' from 'sell'.
   
Logitech, though, slumped 3.51 pct "Logitech's first quarter results disappointed investors, with EBIT and net profit in particular falling short of expectations," a Zurich-based trader said.
   
A Bank Wegelin analyst said that indications continued slow webcam sales in the second quarter further weighed. However, analysts said that today's results should not be overestimated, with the Logitech's first quarter seen as the least important in the group's business cycle.
   
Shares in Anglo-Dutch group Unilever NV and Danone were up 1.24 pct and 2.72 pct respectively after a report that PepsiCo and Nestle had been in merger talks in the spring.
      
Nestle added 2.27 pct as JP Morgan recommended investors switch out of Unilever into the Swiss group. It repeated its 'overweight' recommendation on Nestle, saying visibility is strong.
   
Siemens added 1.98 pct, and Continental gained 1.63 pct amid persistent market rumours that on the one hand, Blackstone has teamed up with TRW and made a 12 bln eur bid for Siemens' VDO automotive unit or that Continental is rumoured to be preparing to increase to its own offer for the unit to 14.5 bln.
   
Today, German newspaper FAZ said Continental's management could itself be a target for Blackstone.
   
Roche added 4.27 pct as investors welcomed the group's forecast-beating first half results and the smooth transition at the Swiss pharma group's helm.   

Shares in Sandvik climbed 2.09 pct after the Swedish engineering group reported far stronger-than-expected second quarter profits, buoyed by strong volumes and a favourable product mix.

Also in Scandinavia, Skandinaviska Enskilda Banken AB (SEB) was up 1.76 pct, as the company said first half operating profits rose 15 pct to 8.711 bln skr, 8 while analysts had predicted a rise to 8.302 bln skr, according to a survey by SME Direkt. "The strengthened capital base and enhanced operating model offer opportunities for complementary add-on acquisitions in SEB's markets across the Baltic rim," chief executive Annika Falkengren said in a comment on the Baltic markets.
   
Shares in Vodafone were 0.5 pct following its upbeat first quarter trading update and release of key performance indicators.

Trade with RCG fxtrader ™, the platform offering instant access to 12 major FX trading pairs with low spreads (2 pips EURUSD, USDJPY) and global news from 3 major sources.  Trade with a registered and regulated company in business for 80 years. Smart money trades here. Get your FREE Trial Today!

Indian shares close higher on fund inflows and L&T, Ranbaxy earnings

MUMBAI - The Bombay Stock Exchange's benchmark Sensex closed at 15,550.13 points, up 248.96 points, 1.63 pct as it briefly touched an all-time high of 15,593.31 towards the end of the session. The National Stock Exchange's S&P CNX Nifty closed at 4,562.10 points, up 1.39 pct.
   
Larsen & Toubro rose 2.02 pct to close at 2,376.70 rupees while Ranbaxy closed 1.36 pct higher at 351.55 rupees.
   
In the BSE 30, 25 shares gained and five shares fell. In the broader market 1,504 shares advanced and 1,100 declined while 71 remained unchanged.
   
Telecom services company Reliance Communications Ltd rose 2.13 pct at 579.30 rupees after chairman Anil Ambani said a group of investors agreed to buy 5 pct stake in its subsidiary, Reliance Telecom Infrastructure Ltd for 6.75 bln usd.
   
Sensex hevyweight Reliance Industries Ltd, which recently struck gas at its block located in the Cauvery basin in the southern Indian state of Tamil Nadu, rose 4.20 pct to 1,896.45 rupees.
   
India's third largest software exporter Wipro Ltd gained 0.19 pct to 505.40 points, after it posted a 17 pct rise in first quarter net profit to 7.26 bln rupees. Wipro's earnings fell short of Thomson Financial estimates of a net profit of 7.79 bln.
 
Thai shares close down marginally amid disappointment over BoT rate cut

BANGKOK - The Stock Exchange of Thailand (SET) composite index lost 2.30 points or 0.3 percent to 847.26 and the blue chip SET 50 fell 3.93 points to 606.31.
   
Losers outnumbered gainers 197 to 150, with 119 stocks unchanged. Turnover was 3.8 billion shares worth 18.7 billion baht.
   
The Thai baht fell slightly against the dollar, still closing at a 10-year high of 33.50-51 to the greenback from Wednesday's 33.35-37. Against the euro, the Thai currency was quoted at 46.27-32 from 45.83-85.
   
"While overall regional markets closed higher, the Thai market fell due to domestic reasons concerning the baht," said Kavee Chukitkasem, Kasikorn Securities' managing director. "Foreign investors turned sellers as they were disappointed by the rate cut," he said, adding that investors had expected "bold action" from the Bank of Thailand in an effort to slow the baht's gains.
   
Instead, the bank slashed its key interest rate by just 25 basis points to 3.25 percent, and the rate cut, the fifth this year, had little impact on weakening the baht.
   
Kavee also said investors took a wait-and-see stance ahead of the government's policy package aimed at taming the strong currency.
   
Thailand's top energy firm PTT fell 2.00 baht to 308.00, and its unit PTT Exploration and Production declined 1.00 to 122.00.
   
The kingdom's top lender Bangkok Bank lost 3.00 to 126.00. Thai Airways International edged down 0.25 to 43.50, but The nation's largest mobile phone operator Advanced Info Service gained 0.50 to 97.00.
   
Asian money markets summary

BEIJING - Asian late money market rates (vs previous close):

Hong Kong: 3-month HIBOR rate 4.4 pct (4.4)    overnight rate 3.6 pct (3.6)
       
Jakarta: overnight rate  8.54422  pct  (4.00283)
       
Kuala Lumpur: 3-mth KLIBOR bid/ask 3.55/58 pct ( 3.55/58)    overnight rate 3.49/51 pct (3.48/50 )
       
Manila: overnight rate 7.0 pct (7.00)
       
Seoul: 3-yr corporate bond yield 5.74 pct (5.74)     3-yr state bond yield 5.40 pct (5.40)
       
Singapore: avg overnight rate 2.25 pct (2.0625)       3-month SIBOR 2.52 pct (2.1875)
       
Sydney: 90-day bank bill rate 6.447 pct (6.440)
       
Taipei: overnight rate 2.004 pct ( 2.007)
       
Tokyo: unsecured overnight rate 0.500 pct (0.506)     3-month TIBOR 0.75583 pct (0.75417)

Inflation picked up in September in Europe as both areas show fragile economic growth. Just as in the U.S., rising energy prices are to blame. Read free, daily market reports available only at CMS Forex and open your free demo trading account today. Click here

Gold extends gains on dollar weakness, analysts call for push higher

LONDON - At 2.50 pm, spot gold was trading at 674.25 usd an ounce, compared with 672.70 usd in late New York trade yesterday.
   
"Precious metals were firmer on the back of the weaker dollar with Bernanke in his testimony to Congress emphasising inflation still to watch for as he stuck to his hawkish bias," said UBS analyst John Reade.
   
Yesterday's mini rally to above 670 usd, a key psychological level has boosted sentiment, and now market calls for higher prices have returned.
   
"A strong close (today) should see resistance at 675 usd and 682 usd eyed. A breach of 682 usd will see the market thinking about breaking the 2007 693 usd highs once again," said Reade at UBS. Gold hit 693 usd in April.
   
High oil prices, with London's benchmark Brent contract trading less than 2 pct off an all-time high set last summer, also underpinned the metal. Some investors rush into the gold market when high energy prices stoke inflation jitters. With some analysts calling for Brent to go even higher, gold could follow its lead.
       
In other precious metals, silver was higher at 13.25 usd from 13.20 usd, palladium was up at 368 usd from 366 usd while platinum was flat at 1,320 usd.

Robusta coffee up on technical buying, cocoa steady

LONDON - Robusta coffee futures rose on technical buying which has helped prices return to the level they were at the start of the month.
   
At 1.40 pm, Robusta coffee for September delivery was up at 1,884 usd a tonne on the Euronext Liffe, against 1,854 usd at the close yesterday.
   
"The managed money influence in coffee is quite large at the moment," said a Sucden trader. "This morning a similar interest came in and bought 1,000 lots on the opening, and there have only been 4,500 lots so far," he said.
   
Robusta prices rose to a nine-year intraday high of 1,945 usd hit on June 22.
       
Elsewhere, cocoa prices were steady at 1,104 stg from 1,102 stg yesterday. Prices remained near higher levels even though a strong pound, which is near 26-year highs, made the commodity more expensive for those trading in other currencies.
      
Cocoa has gained 20 pct since the start of the year and reached a four year high of 1,146 stg earlier this month.
   
Meanwhile, sugar for October delivery eased to 317 usd a tonne against 312.70 usd at the close yesterday.

Increase the odds for Forex Trading success with this free online course. Learn to build a solid Forex Trading foundation and discover proven strategies for continued success.  Access this wealth of knowledge here absolutely free.

Online Trading Academy - Learn more to earn more.