US & World Daily Markets Financial Briefing 27-11-2006

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Stocks fall in early trading

NEW YORK - Stocks fell ahead of the first full day of trading in five days, with retailers in the spotlight as a broker turned more optimistic on home-improvement retailers and as Wal-Mart Stores Inc. reported sluggish November sales and a venture into the India market.

In the opening minutes, the S&P 500 slipped 2.02 points to 1,398.93, the Nasdaq 100 dropped 9.17 points to 2,451.09. And the Dow Jones industrials lost 16.98 points to 12,263.19.

On Friday, U.S. stocks ended lower after a sharp dollar decline in an abbreviated session. The Dow industrials fell 46 points, the Nasdaq Composite lost 5.7 points and the S&P 500 ended 5.1 points lower.

The dollar continued to see weakness against the euro and the British pound, though it rose slightly on the Japanese yen. The euro was trading at $1.3121, the pound at $1.9369 and the dollar at 116 yen.

No major U.S. economic data is due out Monday, though housing and durable-goods orders data will come later this week.

Crude futures hovered below $60 a barrel in electronic trading, with gold futures trading around $637 an ounce. Both traded electronically on Friday while the floor of the New York Mercantile Exchange was shut.

Retailers again will be in the spotlight as early reports show retail sales on Black Friday to be 6 percent higher than last year, at almost $9 billion.

Chicago-based ShopperTrak RTC said preliminary data shows that sales were "relatively strong." J.C. Penney Co. added that the holiday season was off to a "good start."

Wal-Mart over the weekend reported that U.S. same-store sales in November fell 0.1 percent, its first drop since 1996. The retail giant also agreed to a joint venture with India's Bharti Enterprises to get a foothold in what has been a retail market closed to foreign companies.

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Britain's Tesco and France's Carrefour SA also had discussed a tie-up with Bharti, according to published reports.

Also in the retail sector, Banc of America Securities upgraded its rating on home improvement retailer Lowe's Cos. to buy from neutral, with a $43 price target. "Fundamentals have not bottomed, but valuation may have as we believe the market is beginning to look through the potential trough," the broker said.

On buy-rated Home Depot Inc., the broker lifted its price target to $45 from $42.

Affiliated Computer Services Inc., the Dallas provider of business-process-outsourcing and information-technology services, said that Chief Executive Mark A. King and Chief Financial Officer Warren D. Edwards resigned in the wake of the company's stock-options inquiry. "Certain conduct" of the two executives violated the company's code of ethics for senior officers, Affiliated Computer said in a statement.

The company estimates the "non-cash compensation expense related to incorrect accounting measurement dates" at $51 million, plus tax-related costs.

There aren't many companies due to report earnings figures. Germany's Bayer AG reported a 35 percent decline in profit on the costs of integrating Schering.

International stock markets were mixed. Asian markets largely rose, with the Nikkei 225 up 1 percent in Tokyo and the Taiwanese market up by about the same amount on bid hopes for semiconductor stocks.

European stock markets were slightly lower, with automakers including DaimlerChrysler AG leading decliners.

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The European Markets at 13.00 GMT
 
LONDON - The FTSE 100 was at six-week lows at midday, with renewed US dollar weakness and fears of a contract loss at BAE Systems outweighing early strength in miners and housebuilders, dealers said.

By 12.10 pm, the FTSE 100 index was down 31.5 points at 6,090.6, while the broader indices were also weaker.

FRANKFURT - German shares were lower in midday trade with car stocks dragged down by the strong euro, offsetting solid gains by Bayer and the utility sector, dealers said.

At 11.55 am, the DAX 30 index was down 66.68 points or 1.04 pct to 6,345.28, having moved between a low of 6,343.57 and a high of 6,419.97 so far in today's session.

PARIS -  Share prices were mostly lower at midday, mainly on further concerns about the dollar's weakness in the absence of much French corporate news, dealers said.

At 12.02 pm, the CAC-40 index was down 33.25 points or 0.62 pct at 5,356.21. Volume was 1.3 bln eur.

MILAN - Share prices were slightly lower in midday trade, tracking Wall Street's falls on Friday, with Mediaset bucking the trend on a broker upgrade, and Fastweb lifted by a reported interest of a private equity fund, dealers said.

At 12.00 pm, the Mibtel index fell 0.55 pct to 31,058 points and the S&P/Mib was off 0.52 pct at 40,402, while volumes stood at 2.09 bln eur.

AMSTERDAM - Shares in Amsterdam were broadly lower at midday as US futures suggested a lower opening of Wall Street, while ASMI fell ahead of an EGM, dealers said.

At 12.43 pm, the AEX was 0.59 pct or 2.86 points lower at 482.05 after opening at 484.16 and reaching an earlier high of 485.99.

MADRID -  Share prices were down early afternoon, in line with other European markets, with Banco Bilbao Vizcaya Argentaria (BBVA) sharply lower as the market digested news of a capital increase worth about 3 bln eur that will dilute the bank's EPS, dealers said.

At 12.54 pm, the IBEX-35 index dropped 164.8 points to 13,926.40, after trading in a range of 13,904.50-14,100.40, on turnover of 2 bln eur.

STOCKHOLM - Shares remained in negative territory in midday trade, deepening morning losses on continued profit-taking on dollar jitters, dealers said.
At 12.10 pm, the OMX Stockholm index was down 0.86 pct at 349.80 points, while the OMX Stockholm 30 index was down 0.90 pct at 1,079.98.

ZURICH - Share prices dropped in thin afternoon trade with little corporate news to inspire investors and US futures pointing to another weak performance on Wall Street, dealers said.

At 2.02 pm, the Swiss Market Index was 67.78 points lower at 8,573.74, and the Swiss Performance Index was 50.47 points down at 6,723.71.

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Source: AFX News/Associated Press

Asian shares close mixed, Tokyo rising on a technical rebound

Shares across the Asia-Pacific region closed mixed, with markets lacking strong direction and Tokyo rising on a technical rebound.

Tokyo shares ended higher, recouping most of the previous session's losses, in a rebound led by domestic demand-linked stocks, dealers said.

The yen's strength caused some exporters to suffer, they added.

The Nikkei 225 Stock Average advanced 150.78 points or 0.96 pct to settle at 15,885.38, after touching a high of 15,912.11. It hit a low of 15,615.56.

The broader TOPIX index of all first-section issues closed up 14.97 points or 0.97 pct at 1,553.01, off a high of 1,556.33.

Mitsushige Akino, chief fund manager at Ichiyoshi Management, said today's gains were mainly driven by technical factors after the benchmark Nikkei index lost over 1 pct on Friday.

But he said persistent worries about the pace of Japan's economic recovery, following a raft of weak data recently, may see the market struggle to sustain any gains.

This week, market participants are eyeing the latest industrial output and consumer inflation data for further signs on the health of the economy.

Australian shares ended marginally lower as investor enthusiasm was dampened by thin trading in New York on Friday following the US Thanksgiving Day holiday, dealers said.

The resources sector rose after increases in oil, gold and base metal prices in trading on Friday while banking stocks experienced selling momentum.

The S&P/ASX 200 slipped 1.4 points or 0.03 pct to close at 5,452.2.

The benchmark index closed off the day's low of 5,445.8 and below the high of 5,471.6.

Hong Kong shares were weaker in afternoon trade with profit-taking in China financial stocks and select blue chips wiping out gains in early trade, dealers said.

At 3.24 pm the Hang Seng Index was down 60.12 points or 0.31 pct at 19,200.18.

In mainland China, A-shares in Shanghai and Shenzhen closed mixed with profit-taking in banks weighing down the Shanghai market while Shenzhen was buoyed by rotational buying, dealers said.

The Shanghai A-share Index lost 4.10 points or 0.19 pct to 2,151.16 and the Shenzhen A-share Index was up 7.49 points or 1.54 pct at 492.99.

Seoul shares closed higher with retail investor support and program buying providing a late boost, dealers said.

After a weak performance, induced by Friday's retreat on Wall Street and the won's continued strength against the dollar, stock prices nudged into positive territory toward the close, they noted.

During the session, the won rallied to 930.60 against the dollar, compared with 932 in the previous session.

Domestic demand-linked stocks such as banks and telecoms performed well while large cap IT stocks turned sharply lower.

The KOSPI index closed up 3.40 points or 0.24 pct at 1,425.13, after moving between 1,415.22 and 1,425.13.

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Gold prices retreated slightly after hitting a 15 week high in Asia earlier as the dollar plunged to a 19 month low against the euro, increasing the precious metal's appeal as an alternative investment to the US currency.

At 12.25 pm, spot gold, which earlier hit 641.75 usd on ounce -- the highest level since August 11 -- was quoted at 638.20 usd, little changed from the 638.60 usd levels seen in late European trade Friday.

Elsewhere, platinum was little changed after volatile trade last week that saw the metal hit an all time high of 1,400 usd last Tuesday before giving back nearly all of its near 150 usd gains by the close.

Platinum was little changed from late European trading levels Friday, fetching 1,190.00 usd an ounce, as silver edged up to 13.45 usd an ounce against 13.43 usd and palladium stayed steady with late Friday levels at 329.00 usd.

Oil prices steadied around 60 usd, following quiet trading conditions over last week's Thanksgiving holiday in the US, as the market found support from a Saudi warning that OPEC will likely cut output again next month.

At 10.22 am in London, front-month Brent North Sea crude contracts for January delivery were up 3 cents at 60.06 usd a barrel, after rising 68 cents to close at 60.03 usd on Friday.

Meanwhile, New York light sweet crude contracts for January delivery rose to 59.81 usd a barrel, up 57 cents from the settlement on Wednesday, the last day of pit trading before NYMEX closed for Thanksgiving.

Saudi Arabia's Oil Minister Ali al-Naimi said at the weekend that OPEC will need to consider further output cuts if last month's move to trim production by 1.2 mln bpd does not work to stabilise prices.

The cartel meets again on Dec 14 in Abuja, Nigeria.

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