By Steve Goldstein, MarketWatch
Dec 8, 2005
U.S. stock market futures pointed to a slightly weaker open on Thursday,
as a cautious outlook from homebuilder Toll Brothers and declines in
overseas markets weighed on sentiment.
Meanwhile, Texas Instruments' raised outlook, which came a day before
Intel Corp. issues its mid-quarter update, acted as a cushion for the
technology sector.
S&P 500 futures eased 1.40 points to 1,256.50 and Nasdaq 100 futures
declined 1.5 points to 1,699.0. Dow industrials futures shed 3 points to
10,810.
On Wednesday, the Dow fell 46 points at 10,810, the Nasdaq Composite
shrank 8.8 points at 2,252 and the S&P 500 ended 6.3 points lower at
1,257.
Data showing an unexpected rise of 6,000 in first-time claims for state
unemployment benefits to 327,000 in the latest week, the highest level
since Nov. 19, had little effect on stock futures. The consensus forecast
of Wall Street economists was for claims to inch lower by 2,000 to
318,000.
Overseas, Japanese and Hong Kong stocks sold off sharply, hurt in part by
a botched trade in Japan, while European markets also were lower.
"Fears about more Fed rate hikes might be an underlying fear," suggested
analysts from KBC Securities.
The dollar, however, fell on both the euro and the yen, with one euro
recently trading up 0.5% at $1.1771 and a dollar exchanging hands down
0.4% vs. the yen at 120.54 amid hawkish comments by Japanese and European
officials.
The yield on the 10-year Treasury note slipped 0.015 percentage points to
4.502%.
Front-month crude-oil futures edged higher on Thursday after closing at a
three-session low on Wednesday, as U.S. data showed a fourth-weekly rise
in distillate inventories as well as gains in crude and gasoline supplies.
The January contract rose 35 cents to $59.53 a barrel.
February gold edged up 50 cents to $518.30.
Of individual stocks seeing early activity, luxury home builder Toll
Brothers Inc. fell 13 cents, or 0.4% to $34.17 in Instinet pre-open
trading after the company reported a 72% increase in fourth-quarter net
profit on a 40% revenue rise, but also gave a range of fiscal 2006
earnings a share that was weighted below consensus forecasts, and said
fiscal 2007 earnings may beat or miss a previous estimate of 20% growth.
Fellow homebuilder Hovnanian also fell in light trading in Instinet after
reporting late Wednesday better-than-expected fiscal fourth-quarter
earnings, but saying that 2006 results would be more backend-loaded than
usual.
Meanwhile, shares of Texas Instruments Inc. rallied 1.9% to $34.18 in
Instinet after the world's largest supplier of mobile-phone chips lifted
the low end of its fourth-quarter earnings and sales forecast range late
Wednesday, although it also narrowed the top end of its sales forecast.
Also in the chip sector, Xilinx hiked up 1.7% to $26.92 in Instinet after
the company raised late-Wednesday its fiscal third-quarter sales outlook.
Intel, the world's biggest supplier of computer chips, is expected to
raise the midpoint of its estimated fourth-quarter sales range when it
updates investors after the market closes Thursday. The Dow component was
trading up 0.8% at $26.37 in Instinet.
Elsewhere, Dow member McDonald's said November same-store sales rose 4%,
amid 4.8% in the U.S., a flat performance in Europe and a 7.1% rise in the
Asia/Pacific, Middle East and Africa region. The shares were not active in
Instinet.
Costco Wholesale Corp., the Issaquah, Wash., discount retailer, reported
that fiscal first-quarter earnings and sales each rose 12%. For the 12
weeks ended Nov. 20, Costco earned $215.8 million, or 45 cents a share,
from $193.2 million, or 40 cents, in the year-earlier period. The quarter
included a penny charge on hurricanes. Sales climbed to $12.66 billion
from $11.34 billion. Comparable-store sales rose 9%. The consensus
estimates of analysts surveyed by Thomson First Call were for earnings of
45 cents on $12.89 billion of sales.
Citigroup Inc. has won an arbitration case filed against it for allegedly
faulty stock research it issued, The Wall Street Journal reported. A
three-person National Association of Securities Dealers panel rejected the
claim of Donald Sturm, who was seeking $900 million over his decision to
hold onto nearly 21 million shares of WorldCom, the report said.
ValueVision has discussed with General Electric's NBC the prospect of
acquiring an option to buy control of Paxson Communications, sources close
to the situation told the New York Post Online. At the same time,
IAC/Interactive Corp., controlled by Barry Diller, has twice in the past
year bid for ValueVision and been rebuffed, the paper said.
Shares of British biotech Protherics PLC surged more than 50% in London on
Thursday after AstraZeneca PLC agreed to pay up to $338 million for the
rights to a drug to treat a potentially lethal blood infection.
Broker calls
Merrill Lynch cut steelmaker Nucor Corp. to neutral from buy, citing
valuation. The broker also told clients that as a result of the current
price differential between the U.S. and the rest of the world as well as
low inventory levels in the U.S., imports could trend upwards as we head
into 2006.
The same brokerage cut petroleum refiner Sunoco, Inc. to neutral from buy,
citing valuation. The broker told clients that Sunoco shares, trading near
all-time high levels, no longer offer a compelling reason for material
upside
This MarketWatch news update is provided to you courtesy of Thomson
Financial.
This is Thomson Financial's Market Commentary, which is issued three times
daily; Pre-Open ( 9:00 a.m.), Post-Open (10:15 a.m.), and Close (5:00
p.m.). The information herein is believed to be true and accurate. We
take no responsibility for inaccurate information and reserve the right to
update our reports. If you have any questions please e-mail James Sang at
james.sang@tfn.com or call 646.822.6233. For more information about
Thomson Financial visit us on-line at http://www.thomsonfinancial.com. For
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SOURCE Thomson Financial Corporate Group
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