US & World Daily Markets Financial Briefing 24-02-2006

Bill Cara has enjoyed a highly successful securities industry career. Today he publishes one of the world's most popular and widely acclaimed trading blogs. His weekly column for ADVFN looks at trends and cycles at work in the US and Canadian markets. Click here

U.S. Stocks at a Glance

U.S. stocks have mixed open after disappointing data

NEW YORK - U.S. stocks traded mixed at Friday's opening, struggling under the conflicting influences of sharply weaker-than-expected durable-goods orders and rising oil prices on the one hand, and the belief that many individual shares remain attractive on the other.

The Commerce Department reported a 10.2% plunge in durable-goods orders last month. The decline, the largest since July 2000, far exceeded the 2.5% drop expected by economists.

The Dow Jones Industrial Average fell about 11 points to 11,058 in the early going. The S&P 500 rose almost 1 point to 1,288 and Nasdaq Composite fell nearly 2 points to 2,277.

Wall Street Tech Stocks

Stocks changed little in early trading

LOS ANGELES - Technology stocks searched for direction in early Friday trading, with the Nasdaq Composite Index barely changed. The tech-rich index inched down less than 1 point to 2,278 and the Philadelphia Semiconductor Index added a fraction of a point to 524.7.

BEA Systems Inc.'s stock gave up 8 cents to $10.79 in the wake of its results. Shares of Marvell Technology Group Ltd. picked up 6 cents to $62.89 after its own results, while those of Intel Corp. creeped down 6 cents to $20.23 amid an analyst's downgrade.

Wall Street pharma

Drug stocks mixed, Merck dips on FDA delay

BOSTON - Drug stocks were mixed in early trading Friday as Merck dipped on news the Food and Drug Administration won't rule on whether to approve its new shingles vaccine Zostavax until May 25.

The Amex Pharmaceutical Index was down 0.2% to 325.95 while the Amex Biotechnology Index was up nominally at 734.30 during a comparatively placid
trading session for the sectors on Wall Street.

Merck slipped almost 1% to $35.12. The drugmaker said the FDA has delayed ruling on Zostavax in order to have more time to study additional data submitted by the company.

In December, an FDA advisory panel found that the company's data supported approval of the vaccine for patients 60 and older, but not for adults aged 50 to 59. 

German drugmaker Schering AG gained 2% to $71.04. On Thursday, the stock was upgraded by analysts at Bear Stearns to outperform. Analysts at Morgan Stanley, however, lowered their rating to equal-weight.

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Wall Street airlines

AMR Corp. leads sector decline as oil pushes higher

SAN FRANCISCO - Airline stocks, led by AMR Corp., declined in early trading Friday after reports of an explosion in Saudi Arabia triggered a surge in crude-oil prices.

Crude for April delivery jumped to as high as $62.60 a barrel after a report sourcing the al-Arabiya television channel of an explosion and shots fired at an Eastern Saudi Arabian oil refinery. 

The Amex Airline Index , with nearly all its components trading lower, shed
1.3% to 52.78 points shortly after the opening bell. The benchmark gauge started the week at 53.09 points. 

JetBlue Airways was an exception, jumping 4% to $11.52 while its low-cost rival Southwest Airlines shed 1.2% to $16.62.

Leading decliners, AMR Corp. lost 2.6% to $25.19 and Continental Airlines fell 2.2% to $22.81.

Forex

Yen extends rally after BoJ Governor's comments

NEW YORK - The yen extended a rally from the prior session, setting fresh one-month highs against the dollar early Friday, as Bank of Japan Governor Toshihiko Fukui reiterated his hawkish comments about the interest rate outlook in the world's second-largest economy.
   
Fukui said Friday that conditions for a monetary policy change are gradually falling into place. He said the BoJ would watch for core consumer price inflation to stabilize above zero, in addition to positive indicators of economic recovery and price stability, before amending monetary policy.
   
Earlier, the dollar had a muted reaction to a sharply weaker-than-expected durable goods orders number for January, which reflected the largest decline
since July 2000.
   
At last check, the dollar changed hands at 116.79 yen, down 0.3% from 117.13 late Thursday. The dollar had touched 116.40 yen earlier in the session, the lowest level since Jan. 25.
   
Against the euro, the dollar recovered losses from the previous session. The euro was last trading at $1.1896, down 0.2% from $1.1917 late Thursday.
   
The Commerce Department said new orders for U.S.-made durable goods plunged a whopping 10.2% in January as aircraft orders dried up after three months of strength.
   
The decline far exceeded the 2.5% drop expected by economists surveyed by
MarketWatch.

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Europe at a Glance

London - Share prices were higher at midday as a set of strong of corporate results from WPP and Lloyds TSB diverted attention from transatlantic woes and helped offset a dip in sentiment for the mining sector, dealers said.
   
By 12.19 pm, the FTSE 100 index was up 22.7 points at 5,858.7.

Frankfurt - Shares were up slightly at midday as US stock futures point to gains this afternoon and as Continental AG rose sharply after its full-year results yesterday prompted brokers to hike their price targets, dealers said.
   
At 11.45 am, the DAX 30 index was 11.10 points or 0.19 pct higher at 5,868.98, having moved between 5,847.62-5,872.31 so far this session.
   
The MDAX was at 8,341.86, up 31.77 points or 0.38 pct, while the TecDAX was at 737.24, up 1.88 points or 0.26 pct.
   
The DAX futures contract was at 5,879.00, up 17.50 points or 0.30 pct, while bund futures were at 120.43, down 0.01 point.

Paris - Shares were trading slightly higher at midday, on speculation that Suez may form an alliance with Gaz de France to fend off a potential takeover bid by Italian utility Enel.
   
At 12.01 pm, the benchmark CAC-40 index was up 13.79 points or 0.27 pct at 5,054.50. There were 17 decliners and 22 gainers, while Arcelor shares were unchanged among the CAC-40 shares.
   
Volume was 1.52 bln eur.
   
On the Matif, March CAC-40 futures were trading down 10.5 points or 0.21 pct at 5,059.0.

Amsterdam - Share prices were slightly higher in midday trade as US futures pointed to a positive Wall Street open, dealers said.
   
At 12.58 pm, the AEX was up 0.56 point or 0.12 pct at 465.16, after opening at 44.69, reaching a high of 466.03 and falling to a low of 463.86.

Milan - Share prices were higher at midday trade, led by Capitalia, which was boosted by strong earnings and merger speculation, and Fiat on gains in shares of its US-listed unit CNH, dealers said.
   
At 12.41 pm, the Mibtel index advanced 0.51 pct to 29,050 points and the S&P/Mib rose 0.45 pct at 38,143 points, while volumes stood at 1.90 bln eur.
   
Capitalia rose 4.20 pct to 6.61, extending a recent rally after announcing above-consensus full-year results this morning and thanks to continued merger speculation.

Madrid - Share prices were higher in brisk early afternoon trade, lifted by Repsol YPF after a solid fourth quarter operating performance, while Iberia outperformed after breaking key resistance levels, dealers said.   
   
At 1.11 pm, the IBEX-35 index was up 29.5 points at 11,768.5, after trading in a range of 11,738-11,780, on turnover of 1.456 bln eur.
 

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Zurich - Share prices were lower at midday, with Kudelski and Synthes lower after their full year results missed expectations, dealers said.
  
At 12.45 pm, the SMI was down 19.38 points at 7,964.36.

Stockholm- Shares edged higher in midday trade led by banking stocks, but with the rest of the market receiving support from indications of a positive start on the Nasdaq later today, brokers said.
   
At 12.10 pm the OMX Stockholm index was up 0.35 pct at 321.17 and the OMX Stockholm 30 up 0.41 pct at 1,005.79. Turnover was 6.542 bln skr.
   
Nordea was up 0.28 pct at 90.25, Handelsbanken A up 1.21 pct at 209.50, SEB
A up 1.12 pct at 180.50, and FS-Banken up 1.18 pct at 214.50.

Helsinki - Shares were flat in low-volume midday trade, with shares mixed amid profit-taking and bargain hunting, dealers said.
   
At 12.16 pm, the OMX Helsinki 25 index was 0.02 pct higher at 2,600.10 points. The OMX Helsinki index was up 0.04 pct at 8,964.35 points, while the Helsinki CAP portfolio index was 0.06 pct higher at 4,854.88 points.
   
Nokia was up 0.06 pct to 15.87 eur, unperturbed by reports that it is delaying the release of its N91 music handset until the third quarter, as it continues to iron out issues relating to Digital Rights Management Technology.

Brussels - Shares were modestly higher late morning, but with telecoms operator Belgacom and brewery giant InBev falling after disappointing the market on publication of their full year results, analysts said.
   
At 11.11 am, the Bel 20 was up 12.72 points or 0.33 pct at 3,914.50 eur.
   
Belgacom was down 0.95 eur or 3.60 pct at 25.44 eur after the group's 2006
outlook failed to inspire optimism.

Athens - Shares were higher in late morning trade, led by blue chips, with domestic sentiment remaining positive due to solid earnings releases, brokers said.
   
At 11.45 am the ASE general index was 0.3 pct higher at 4,252.5 points, and blue chips were up 0.6 pct at 2,349.1 points. Mid caps were flat at 4,318.8 points.

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Asia at a Glance

Asian shares close mixed, Tokyo slightly up on bargain hunting

HONG KONG - Share prices across the Asia-Pacific region ended mixed, with Tokyo fractionally higher as bargain hunting erased losses in morning trade caused by a stronger yen, dealers said.
   
The Nikkei 225 Stock Average finished up 5.81 points at 16,101.91, after touching a high of 16,118.11.
   
The broader TOPIX index of all first-section issues gained 7.27 points or 0.4 pct to 1,647.74, off its day-peak of 1,649.31.
   
For the week, the Nikkei 225 gained 2.4 pct, while the TOPIX was up 2.6 pct.
   
Share prices got off to a weak start as the firmer yen weighed on exporters.
   
Market sentiment was also hurt by remarks yesterday from Bank of Japan governor Toshihiko Fukui that the central bank will soon end its super-loose monetary policy, possibly paving the way for interest rates to rise.
   
"Share prices had been softer due mainly to a rise in the value of the yen against the dollar, which was caused by Fukui's comments yesterday. But some investors chased bargains later, pushing the Nikkei index above the key 16,000 level," said Hideo Mizutani, chief strategist at Sieg Securities.
   
Share prices finished lower in Australia after an overnight fall in metal prices sparked profit-taking in resource stocks, removing the shine off an overall positive week during which investors took encouragement from solid earnings reports, dealers said.
   
They said index leading resources stocks BHP Billiton and Rio Tinto were sold down after their London-listed shares lost ground on weaker base metal prices after a jump in inventories.
   
Australia's largest independent gold miner Newcrest added to yesterday's sell-off when it reported ore quality problems at its Telfer mine, while the fall in the gold price also soured sentiment.
   
The S&P/ASX 200 fell 19.8 points or 0.40 pct to close at 4,893.4, retreating from the record high of 4,956.7 set on Feb 1.
   
In Hong Kong, share prices were trading almost flat as early gains driven by follow-through interest were eroded by caution ahead of the expiry of February futures contracts on Monday, dealers said.
   
At 3:35pm, the Hang Seng Index was up 24.32 points or 0.15 pct at 15,836.85.
   
In mainland China, A-shares in Shanghai and Shenzhen closed higher on some follow-through interest with steelmakers and real estate developers in demand, dealers said.
   
The Shanghai A-share Index added 8.07 points to 1,359.86 on turnover of 11.15 bln yuan and the Shenzhen A-share Index was up 2.45 points at 326.91 on turnover of 6.69 bln yuan.
   
Share prices in Seoul ended slightly higher on institutional investor support, extending gains for a second trading session, with steel makers, autos and KT&G leading the rise, dealers said.
   
Intensified program buying toward the close helped the index end near its strongest level for the day, offsetting massive profit-taking by retail investors ahead of the weekend.
   
Steel makers were strong gainers after China's Baosteel said it will raise prices of its major products by 18 pct in the second quarter.
   
The KOSPI index closed up 4.59 points or 0.34 pct at 1,365.82.

Asian Bourse Round-up

For a full list of closing figures, click here

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Commodities

Crude climbs above $62 as traders eye Saudi explosion report

SAN FRANCISCO - April crude climbed to $62.40 a barrel in New York, up $1.86, or 3.1% on a report of an explosion at an oil refinery in Saudi Arabia.

"Although further details of the explosion have not yet been clarified, it has been clear for a long time now that any such event would send prices skyrocketing given the world's current lack of spare capacity," said Matthew Parry, an economist at Moody's Economy.com.

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