By Steve Goldstein, MarketWatch
Dec 15, 2005
U.S. stock market futures erased earlier losses to trade mixed early
Thursday, boosted by a bigger-than-expected drop in retail inflation, an
unexpected rise in New York area manufacturing activity and strong results
from Bear Stearns.
Meanwhile, a less than stellar quarterly report from Goldman Sachs
tempered investor enthusiasm or market gains.
S&P 500 futures inched 0.30 points lower to 1,281.80 while Nasdaq 100
futures ticked up 0.5 points to 1,719.0. Dow industrials futures eased 1
point to 10,950.
On Wednesday, the Dow climbed 59 points at 10,883 and the S&P 500 rose 5.3
points at 1,272, a fresh 4 1/2-year closing high, though two broker
downgrades of Apple Computer weighed on the Nasdaq Composite, which lost
2.4 points at 2,262.
U.S. consumer prices fell at the fastest rate since 1949 in November,
plunging 0.6% as energy prices retreated, the Labor Department said
Thursday, amid a record 8% drop in energy prices in November. Excluding
volatile food and energy prices, the core consumer price index rose 0.2%
in November. The 0.6% drop in the CPI was larger than the 0.4% expected by
economists surveyed by MarketWatch. The 0.2% rise in the core rate was as
expected.
Manufacturing activity in the New York area expanded further in December,
the New York Federal Reserve Bank said Thursday. The bank's Empire State
Manufacturing index rose to 28.7 in December from 22.8 in November. The
increase was unexpected. Economists were expecting the index to slip to
19.0.
The yen climbed once more against the dollar on Thursday, with the dollar
falling to as low as 115.83 yen from 117.47 late Wednesday in what was
seen as a year-end reversal of short positions. The euro also gained on
the dollar.
Front-month crude oil contracts were trading 25 cents lower at $60.60 a
barrel, while gold futures contracts shed $4.60 to $504.90 an ounce.
Bear Stearns tacked on 59 cents to $111.09 in Instinet pre-open trading
after reporting earnings of $2.90 a share, up from $2.61 a share in the
year-earlier period and above the average analyst estimate compiled by
Thomson First Call of $2.63 a share. The company also raised its quarterly
dividend to 28 cents a share from 25 cents, and boosted its stock buyback
program to $1.5 billion from $1 billion.
Separately, the company said it offered to settle mutual fund trading
issues with the U.S. Securities and Exchange Commission. Included in the
offer is a $250 million payment.
Rival Goldman Sachs lost 1.6% to $127.60 after reporting earnings of $3.35
a share, up from last year's $3.25 a share, and in line with analyst
projections.
Meanwhile, peer J.P. Morgan Chase said it's buying Collegiate Fund
Services for $633 million, or $20 a share, a 31% premium to Wednesday's
closing price.
Elsewhere, software giant Microsoft Corp. slipped 22 cents to $27.03 after
saying late Wednesday that it planned to up its quarterly dividend by one
cent a share, or 12.5%, to 9 cents.
Homebuilder Lennar Corp. ran up 3.2% to $62.50 after it beat earnings and
revenue expectations with a fourth-quarter profit rise of 53% to $581
million, or $3.54 a share, with revenue up 42% to $5.03 billion. Analysts
were looking for earnings of $3.34 a share on revenue of $4.96 billion,
according to Thomson First Call. The Miami, Fla.-based company said it's
on track to meet its fiscal 2006 goal of earnings of $9.25 due to a record
$6.9 billion backlog.
After the market close, Oracle Corp. and Adobe Systems are due to unveil
their earnings.
Also late Wednesday, Amgen Inc. said it plans to acquire antibody research
group Abgenix Inc. for $2.2 billion, the companies said.
Overseas, the Nikkei 225 declined due to the yen strength, while European
equities were moderately lower. Philips Electronics rose after it said it
will sell, spin off or merge its chip-making division.
Also in the chip field, Citigroup upgraded flash-memory chipmaker SanDisk
Corp. buy from hold, citing its increasing conviction that strong NAND
flash-products demand will press the industry's supply capabilities
despite a broadening number of suppliers.
Merrill Lynch downgraded five media companies, moving Cumulus Media Inc.
and Lin TV Corp. to sell and cutting Citadel Broadcasting Corp., Belo
Corp. and Gray Television Inc. to neutral, citing lackluster near-term
fundamentals and a more muted long-term outlook. Merrill cut its
fourth-quarter 2005 radio revenue growth forecasts to down 3.7% from up 2%
due to tougher political comparisons and a deceleration in pacing trends,
and also trimmed its 2006 radio forecasts.
In TV, it's cutting its 10-year spot TV forecast due to restrained
domestic auto manufacturing spending and it not being convinced of upside
from the digital TV spectrum.
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
more financial information at your fingertips, please visit
http://www.irchannel.com.
SOURCE Thomson Financial Corporate Group
back to top
