Morning Market Update
Market Levels
• US: Dow: 12996.00 (0.04%), S&P 500: 1404.20 (-0.09%), NASDAQ: 2639.50 (-0.06%)
• Europe: CAC: 3463.80 (-0.83%), DAX: 7330.69 (-0.45%), FTSE: 5841.52 (-0.46%).
• Asia-Pacific: Australia: 4474.10 (0.31%), China: 2114.03 (-0.14%), Hong Kong: 22006.40 (-0.48%), India: 5704.20 (0.11%), Japan: 9007.44 (-0.49%).
• Metals: Gold: 1681.20 (0.36%), Silver: 30.94 (0.29%), Copper: 3.46 (-0.69%)
• Energy: Crude Oil: 85.17 (0.37%), Natural Gas: 3.63 (-0.68%)
• Commodities: Corn: 7.41 (-1.30%), Soya Bean: 15.20 (-2.21%), Wheat: 8.69 (-0.06%)
• Currency: EUR/USD: 1.2791 (-0.32%), GBP/USD: 1.5974 (-0.30%), USD/JPY: 80.2500 (-0.22%)
• 10 year US Treasury: 1.686% (-0.029)
Financial and Economic News Update
U.S. stock-index futures largely unchanged: U.S. stock-index futures are pointing to a flat open on Monday ahead of Tuesday’s presidential election. Sentiment on the Street was also affected by concerns that Greece will struggle to win a bailout.
European markets trading lower: European markets are trading lower on Monday with the German DAX (INDEXDB:DAX) down 0.5 percent at 7330.69, the FTSE 100 (INDEXFTSE:UKX) lost 0.5 percent to 5841.52 and the CAC 40 (INDEXEURO:PX1) slid 0.8 percent to 3463.80. The euro zone blue-chip ESTX 50 PR.EUR (INDEXSTOXX:SX5E) (Euro Stoxx 50) was trading 0.9 percent lower.
Asian markets end mostly lower: Asian markets closed lower on Monday with the HANG SENG INDEX (INDEXHANGSENG:HIS) down 0.5 percent at 22,006.4 points, while the SSE Composite Index (SHA:000001) (Shanghai Composite Index) gave up 0.1 percent. Japan’s NIKKEI 225 (INDEXNIKKEI:NI225) closed down 0.5 percent to 9,007.44. The S&P/ASX 200 (INDEXASX:XJO) index added 0.3 percent or 14.1 points at 4,474.1. The benchmark Indian 30-share BSE SENSITIVE (INDEXBOM:SENSEX) index was closed flat.
Company News Update
U.S.
• Ford Motor Company (NYSE:F) said it sold 60,518 vehicles in China in October, up 48 percent from the same period last year. General Motors Company (NYSE:GM) sold a record 251,812 vehicles last month in the country, up 14.3 percent from a year earlier.
• Time Warner Cable Inc (NYSE:TWC) reported third-quarter earnings excluding one-time items of $1.41 per share, 2 cents below the average analysts’ estimate. Revenue for the period came in at $5.36 billion, also trailing expectations for $5.39 billion.
• Warren Buffett’s Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B) reported quarterly results after market close on Friday. Third quarter operating profit declined 11 percent to $3.4 billion, or $2,057 per Class A share. Analysts were expecting an operating profit of about $2,063 a share.
• Investment bank Stifel Financial Corp. (NYSE:SF) has agreed to acquire smaller rival KBW, Inc. (NYSE:KBW) for $17.50 a share, or around $575 million.
• Health-care company Humana Inc. (NYSE:HUM) reported third quarter profit of $426 million, or $2.62 a share, down from $445 million, or $2.67 a share, in the year-ago period. Revenue came in at $9.65 billion. Analysts had forecast earnings of $2.05 a share on revenue of $9.86 billion.
• The Boeing Company (NYSE:BA) is likely to secure a multi-billion dollar in military contracts from the Indian government to supply Chinook and Apache helicopters, according to a report in The Wall Street Journal.
• Commodities exchange operator IntercontinentalExchange Inc (NYSE:ICE) said third-quarter earnings fell 1.2 percent to $131.1 million, or $1.79 a share, from $132.6 million, or $1.80 a share, in the year-ago period. Revenue declined 5.2 percent to $323.2 million. Analysts were expecting the Atlanta-based company to earn $1.72 in per share on $325 million in revenue.
• Drugstore chain Walgreen Company (NYSE:WAG) said October same-store sales fell 5.9 percent. Analysts were expecting sales to decline 4.4 percent.
• Offshore-drilling company Transocean Ltd (NYSE:RIG) reported third quarter earnings excluding certain items of $1.37 a share that easily beat the average analysts’ estimate of 76 cents a share. Revenue jumped 23 percent to $2.44 billion, trailing estimates of $2.53 billion.
• Electric car maker Tesla Motors Inc (NASDAQ:TSLA) posted third quarter loss excluding one-time items of 92 cents a share, on revenue of $50.1 million. Analysts looking for a loss of 89 cents a share on sales of $55.7 million.
• Norwegian oil-rig company Seadrill Ltd (NYSE:SDRL) will sell part of its Asian business to Malaysia’s SapuraKencana for an enterprise value of $2.9 billion, according to a Reuters report.
• The Southern Company (NYSE:SO) reported a 6.5 percent rise in third quarter profit to $993 million, or $1.11, from $933 million, or $1.07 a share, in the same period last year. Revenue dropped 7 percent to $5.05 billion. Analysts had projected earnings of $1.13 a share and revenue of $5.97 billion.
• Railroad operator Genesee & Wyoming Inc. (NYSE:GWR) posted a third quarter loss of $19.6 million, or 47 cents a share, versus a profit of $32.9 million, or 77 cents a share, a year earlier. The company recorded a one-time, non-cash charge of $50.1 million during the quarter related to the funding of its $1.4 billion acquisition of RailAmerica, Inc. (NYSE:RA). Excluding the charges, the company earned 74 cents per share. Revenue increased 2.5 increased to $222.7 million. Analysts had projected earnings of 69 cents a share on revenue of $220 million.
• BioMarin Pharmaceutical Inc. (NASDAQ:BMRN) is up 25 percent in pre-market trading after a late-stage trial of its experimental genetic disorder drug, GALNS, met the main goal of improving patients’ ability to walk.
• Sysco Corporation (NYSE:SYY) posted first quarter earnings excluding items of 58 cents a share, on revenue of $11.1 billion. Analysts were expecting the food-services distributor to earn 50 cents a share on revenue of $11.14 billion.
• Manitowoc Company, Inc. (NYSE:MTW) reported a 6.3 percent fall in third quarter profit to $22.2 million, or 17 cents a share, from $23.7 million, or 18 cents a share, in the year-ago period. Revenue rose 2.2 percent to $955.7 million. Analysts were expecting the equipment manufacturer to earn 29 cents a share on revenue of $1.05 billion.
Europe
• HSBC Holdings plc (ADR) (NYSE:HBC) (LON:HSBA) fell 1.4 percent after third quarter underlying pre-tax profit rose to $5 billion, missing the average analysts’ estimate of $5.6 billion. The British bank said it had set aside an additional $800 million in relation to a U.S. money laundering probe.
• Lloyds Banking Group PLC (ADR) (NYSE:LYG) (LON:LLOY) slid 1.5 percent in London after the Sunday Times reported that the bank is considering a sale of its 60 percent stake in wealth management company, St James’s Place.
• CGG Veritas (ADR) (NYSE:CGV) (EPA:GA), the world’s largest surveyor of oilfields reported third-quarter net profit of $48 million, missing analyst estimates for a profit of $68 million. The company, however, confirmed its 2012 targets.
• Low cost carrier Ryanair Holdings plc (ADR) (NASDAQ:RYAAY) (LON:RYA) climbed 7 percent after reporting a 23 percent rise in second-quarter net profit to 496.8 million euros ($636 million), topping analysts’ expectations for a profit of 440 million euros. The airline also raised its full-year earnings forecast.
• Mining stocks were among the losers gainers in London, with Kazakhmys plc (LON:KAZ) down 2.2 percent and Vedanta Resources plc (LON:VED) losing 2.7 percent. Eurasian Natural Resources Corporation (LON:ENRC) slid 2.6 percent, while Antofagasta plc (LON:ANTO) declined 1.7 percent. Rio Tinto plc (ADR) (NYSE:RIO) (LON:RIO) (ASX:RIO) and BHP Billiton Limited (ADR) (NYSE:BHP) (ASX:BHP) (LON:BLT) were also trading close to 2 percent lower.
• Dutch mail service company PostNL NV (AMS:PNL) tumbled 10 percent after reporting lower than expected third-quarter profit and revenue amid a decline in addressed mail volumes.
• British insurer Prudential plc (LON:PRU) agreed to acquire the life-assurance unit of Thailand’s Thanachart Bank for 368 million pounds ($590 million) in cash.
• The Weir Group PLC (LON:WEIR) jumped 6 percent in London after the manufacturing and engineering company said it expects to record a double-digit profit growth in 2012.
Asia-Pacific
• Toyota Motor Corporation (ADR) (NYSE:TM) (TYO:7203) raised its full-year net profit forecast to $9.7 billion as strong demand in the U.S. and Japan helped offset a slump in Chinese sales. The auto major now expects to earn 780 billion yen ($9.7 billion) in the twelve months ending March 2013, exceeding the previous 760 billion yen forecast.
• Australian lender Westpac Banking Corporation (ADR) (NYSE:WBK) (ASX:WBC) reported a better than expected 9 percent rise in second-half cash profit, and said it had improved its balance sheet despite an increase in bad debts.
• Mobile operator eAccess Ltd (TYO:9427) jumped to a 19-month high in Tokyo trading after Softbank Corp (TYO:9984) said it would change its share swap ratio with eAccess. Softbank Corp (TYO:9984) agreed to acquire its smaller domestic rival in a $1.84 billion deal at the start of last month.
• Electric utility Kansai Electric Power Co Inc (TYO:9503) tumbled 7 percent after the Nikkei business daily reported that Japanese officials disagreed about whether a fault line under one its nuclear-power plants is active.
• Sydney-listed Northern Iron Limited (ASX:NFE) crashed 36 percent after Essel Mining, a subsidiary of India’s Aditya Birla Group withdrew a takeover offer for the company.
• Japanese home electronics retailer Yamada Denki Co., Ltd. (TYO:9831) slid 7.5 percent to 3,225 yen after slashing its full-year operating profit forecast by 39 percent to 57.3 billion yen, citing weaker sales.
• Foxconn International Holdings Limited (HKG:2038), the world’s biggest contract maker of cell-phones, soared 32 percent in Hong Kong trading after Citigroup upgraded the stock to “buy” and raised its earnings estimate for 2013 by 134 percent.
• Daiwa Securities Group Inc. (TYO:8601), Japan’s second-largest brokerage fell 2.1 percent despite swinging to profit in the three months ended September 30. Net income came in at 7.4 billion yen ($92 million), compared with a loss of 19.4 billion yen in the year-ago period.
• Apple Inc (NASDAQ:AAPL) supplier Foster Electric Company, Limited (TYO:6794) rallied 15.4 percent in Tokyo after it said that it expects fiscal-year net profit to jump to 4.3 billion yen ($53.5 billion).
Economic Calendar for Monday, November 05, 2012:
10:00 A.M. ET: ISM Non-Manufacturing PMI (October)
11:00 A.M. ET: 4-Week Bill Announcement
11:30 A.M. ET: 3-Month Bill Auction
11:30 A.M. ET: 6-Month Bill Auction
08:00 P.M. ET: San Francisco Fed President John Williams speaks.
