ADVFN Morning Euro Markets Bulletin - Nov. 11th 2010

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London Market Reports
Small improvement for Footsie

Market Movers
techMARK 1,760.43 -0.04%
FTSE 100 5,829.58 +0.22%
FTSE 250 10,994.75 0.00%

Blue chips started pretty much as expected, posting reasonable gains in response to yesterday’s steady recovery on Wall Street, with commodity plays leading the pack.

The Dow Jones was trading deep in the red when London shut up shop Wednesday, but shed nerves ahead of today's G20 meeting in Seoul to eke out a 10-point lead by the close.

Miners marched higher from the off. Antofagasta, Kazakhmys, Xstrata, Fresnillo and Rio Tinto are in demand, as is oil major BP.

Telecoms titan BT bumped up adjusted profit before tax by 13% during the second quarter and has increased earnings forecasts for the full-year.

Cost cutting helped earnings before interest, tax, depreciation and amortisation (EBITDA), adjusted for one-off charges, add 3% to £1.45bn, taking the six-month total to £2.85bn. That was enough for the company to increase its prediction for full-year adjusted EBITDA to around £5.8bn.

Indian miner Vedanta posted a sharp rise in profits in the six months to September 30 as it tapped into the recovery in commodity prices with record production of a number of metals. Pre-tax profits were up to $1.11bn (£690m) from $605m over the same period the previous year on revenues that soared to $4.58bn from $2.98bn.

Kazakhstan-based mining leviathan Eurasian National Resources (ENRC) said production is expected to remain at full capacity in the final quarter of the year. “Revenue and cost growth is broadly in line with our expectations. Cost management remains a priority for the group in order to maintain our advantageous cost position,” said Felix Vulis, chief executive officer of ENRC.

Real estate giant Land Securities built underlying profit up by 6% during the first half – excluding valuation gains of £314m – and businesses are now more willing to commit to new space than even the company expected. Revenue profit grew to £135.9m in the six months ended 30 September, up from £128.4m the year before, though that jumps to £455.3m including the revaluation compared with a £4.6m loss last time.

Electricity generator International Power said expected 2010 spreads and load factors in its merchant markets remain in line with the guidance given in August

Newsagent chain WH Smith saw lower sales in its High Street and Travel divisions in the period between 1 September and 6 November, though this is in line with expectations as the company has been focusing on margins rather than sales. Total sales were down by 2% compared with the same period the previous year. Like-for-like sales in the travel division, which includes shops in railway stations and airports, were down by 1%. High Street like-for-like sales fell by 4%.

Private equity house 3i ramped up investment and swung into profit during the first half. Profit before tax came in at £54m for the six months ended 30 September compared with a £57 loss in 2009, helped by a much smaller exchange rate hit. The net portfolio return rose by £4m to £236m.

AMEC, the provider engineering and project management services to the oil & gas and other sectors, said trading has been towards the top end of expectations this year as all three divisions stay busy.

Restaurant Group, owner of the Garfunkel's chains, said it is trading in line with management expectations despite the tough economic backdrop and is confident of meeting full year targets.


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UK Diary of Event
INTERIMS
Dairy Crest Group, Land Securities Group, Latchways, Opsec Security Group, Vedanta Resources, Wincanton

INTERIM DIVIDEND PAYMENT DATE
British American Inv Trust, Yule Catto & Co

QUARTERLY PAYMENT DATE
Merchants Trust

INTERNATIONAL ECONOMIC ANNOUNCEMENTS
ECB Report (EU) (09:00)

Q3
Aegon NV, Anglogold Ashanti Ltd., Cryptologic Ltd., European Goldfields Ltd., Grupo Clarin SA GDR (Reg S), Ruukki Group (DI), Telecom Egypt SAE GDS (Regs), Telefonica SA

FINALS
Euromoney Institutional Investor

IMSS
Balfour Beatty, Capital & Regional, Eurasian Natural Resources Corp., Hill & Smith Holdings, IMI, International Power, Resolution Ltd., Restaurant Group, Trinity Mirror, WH Smith, Yule Catto & Co

AGMS
Blue Planet Worldwide Financials Inv Trust, Cape Resources, Genus, Minerva, Nautical Petroleum, Thorpe (F.W.)


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European Market Reports
European markets have made a lacklustre start, with early gains quickly surrendered. In France the CAC 40 is down 12 at 3,875 but in Germany the DAX is unchanged at 6,720. Spain’s IBEX 35 index is down 85 points at 6,720 while in Italy the MIB index is off 176 points at 20,881.

Engineering giant Siemens provided a boost to sentiment as it said it will hike its 2010 dividend to €2.70, ahead of market expectations, after its fourth quarter performance proved to be better than expected.

The group has paid a dividend of €1.60 for the last three years and though an increase was expected this year, most analysts thought the company would round up the payment to €2.

The company said it intends to pay out 50% of net earnings in future.

Siemens said sales in the three months to the end of September totalled €21.23bn, up 7.7% on the corresponding quarter of 2009.

Deutsche Postbank, which is subject of a takeover by larger rival Deutsche Bank, saw third quarter profit rise 4.8% to €65m from €62m a year earlier.

German utility company RWE said recurrent net income for the first nine months of 2010 totalled €3.2bn, up from €2.9bn in the corresponding period of last year.

Spanish telecoms giant Telefonica’s third quarter net profit underwhelmed the market. Net income rose to €5.06bn from €1.88bn a year earlier on revenue that advanced 7.3% to €15.23bn from €14.19bn, helped by foreign exchange gains.

CAC 40 - Risers
Schneider Electric (SU) € 103.95 +0.68%
Pernod Ricard (RI) € 63.09 +0.57%
Technip (TEC) € 62.81 +0.56%
Carrefour (CA) € 37.88 +0.50%
EDF (EDF) € 32.58 +0.46%
Veolia Environnement (VIE) € 21.72 +0.44%
EADS (EAD) € 19.17 +0.37%
Total (FP) € 40.79 +0.11%
L'Oreal (OR) € 85.95 +0.07%
Unibail-Rodamco (UL) € 146.35 +0.07%

CAC 40 - Fallers
Alcatel-Lucent (ALU) € 2.19 -3.48%
ST Microelectronics (STM) € 6.37 -2.73%
Dexia (DEXB) € 3.15 -1.93%
Credit Agricole (ACA) € 11.49 -1.46%
Societe Generale (GLE) € 42.23 -1.39%
Saint Gobain (SGO) € 36.34 -1.09%
BNP Paribas (BNP) € 52.95 -1.03%
Renault (RNO) € 41.70 -0.93%
Lafarge (LG) € 45.08 -0.90%
GDF Suez (GSZ) € 27.46 -0.83%


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US Market Reports
Dow recovers early losses

Wall Street recovered from its early losses after investors reassessed economic data released this morning and Wells Fargo’s stated that the US economy is growing a little bit faster than expected.

The Dow Jones ended the day ten points higher at 11,357. Nasdaq added 15 at 2,578 and the broad-based S&P 500 added 5 at 1,218.

Wells Fargo predicted that the US economy will grow by 2.5% next year. The dollar hit a one month high against the euro and the yen. Many investors are still waiting for news from tomorrow’s G20 meet in Seoul before deciding which way to jump.

First time jobless claims, out before the bell, fell 24,000 to 435,000 in the week ending 6 November, a four-month low and better than the 450,000 forecast by analysts.

A report from the Commerce Department showed America’s trade deficit narrowed more than 5% in September to $44bn. Economists thought it would be more like $45bn, down from $46.3bn the month before.

In company news, department store Macy’s raised its full year earnings per share target range by 9c to $1.94-$1.99, after third quarter figures that exceeded market expectations. In the three months to the end of October Macy’s bounced back into the black with a net profit of $10m, versus a loss the year before of $35m.

Resurgent car titan General Motors earned $2bn in the third quarter, a sharp turnaround from last year’s $1.2bn loss. It marks the group’s third profitable quarter since it emerged from administration and bodes well for the forthcoming flotation of the group.

After hours, internet equipment maker Cisco's quarterly profit rose 8% to $1.9bn, or 34c per share. Excluding a one-time charge, the company earned 42c per share, better than expected. Sales climbed to $10.8bn.

Boeing is lower on worries that the 787 Dreamliner could be further delayed after yesterday’s emergency landing by a test flight.

Clothing and home furnishings group Polo Ralph Lauren reported net income of $205m in the second quarter of its fiscal year, up from $178m in the corresponding quarter of last year.

Morgan Stanley says that it is selling its stake in investment management company Invesco Ltd.

Electric vehicles maker Tesla Motors, which floated in the summer, is higher after it said that its loss would be lower than expected. Bad publicity about foreclosed property insurers hit Assurant. Credit Suisse cut its recommendation for Deans Foods from neutral to underperform.

S&P 500 - Risers
Ralph Lauren Polo Corp. (RL) $108.28 +7.29%
Harman International Industries Inc. (HAR) $41.26 +4.93%
Halliburton Co. (HAL) $34.85 +4.91%
Denbury Resources Inc. (DNR) $19.47 +4.90%
Huntington Bancshares Inc. (HBAN) $6.11 +4.44%

S&P 500 - Fallers
Assurant Inc. (AIZ) $35.66 -11.16%
Dean Foods Co. (DF) $7.67 -9.76%
Invesco Ltd. (IVZ) $22.29 -3.92%
Campbell Soup Co. (CPB) $34.85 -3.33%
Owens-Illinois Inc. (OI) $27.85 -3.30%

Dow Jones I.A - Risers
Bank of America Corp. (BAC) $12.56 +2.36%
Chevron Corp. (CVX) $85.17 +1.93%
JP Morgan Chase & Co. (JPM) $40.63 +1.83%
3M Co. (MMM) $86.25 +1.11%
Cisco Systems Inc. (CSCO) $24.59 +0.99%

Dow Jones I.A - Fallers
Boeing Co. (BA) $67.07 -3.15%
E.I. du Pont de Nemours and Co. (DD) $47.14 -0.99%
Wal-Mart Stores Inc. (WMT) $54.51 -0.98%
Intel Corp. (INTC) $20.95 -0.97%
Pfizer Inc. (PFE) $16.84 -0.88%


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Thursday newspaper round-up
The International Monetary Fund was forced last night to deny that Ireland had requested financial assistance after another run on Irish government bonds.

In a rare denial, the IMF said that relations with Ireland were “normal” and described Dublin’s plans to cut spending and raise taxes by €15 billion by 2014 as demonstrating its commitment to fiscal adjustment. Brian Lenihan’s budget next month would be an “opportunity to define measures underpinning” that commitment, writes the Times.

Ireland’s cost of borrowing has rocketed to its highest level since the launch of the euro in 1999 after a dramatic sell-off by bondholders and banks. Ten-year bond yields hit 8.64pc on Wednesday, rising by more than half a percentage point. The sell-off was triggered by a cash-call estimated to be $1bn (£620m) by a clearing house on Wednesday morning, the Telegraph reports.

BAE Systems, Britain's biggest defence company, said it had a record third quarter in its US security and maintenance businesses, and played down the impact of delays to big equipment programmes, the Telegraph writes. "Third-quarter sales grew in the US and we're still doing very nicely there," said Ian King, chief executive. "We're not seeing delays as serious as some of our competitors."

The City’s high-rolling equity, bond and derivatives dealers will have their mobile phone calls taped under rules aimed at stamping out insider dealing. Banks, brokers and investment houses will have to record all calls, texts and e-mails made using business phones or through Skype if they relate to deal orders and customer transactions, the Financial Services Authority is expected to say today, according to the Times.

Foreign banks operating in London could be forced to explain their pay policies in the same way as European firms under new disclosure rules proposed by the City regulator. The Financial Services Authority (FSA) is looking to close a potential loophole in which banks that are headquartered abroad could be exempt from releasing crucial data such as specific remuneration bands, the Telegraph reports.

Google's 23,000 employees around the world will each get a 10 per cent pay rise in the new year, the latest move in what the internet giant has called "a war for talent" in the technology industry. The company, which makes profits at a rate of $1m (£624,000) per hour, announced the pay rise in an email to staff, which said staff would also get a holiday bonus of $1,000 this year, the Independent reports.

The Prudential has cut thousands of agency staff in India after a crackdown by the country’s regulator that threatens its short-term sales prospects. Britain’s biggest insurer said that it had reduced its agency workforce in India by 28 per cent to 176,000 amid new curbs on charging and the imposition of lock-in periods for policyholders buying unit-linked products, the Times says.

Unite has called on Goldman Sachs to intervene in a furious row with its caterers over allegations of racism. The union had planned to picket the investment bank's Fleet Street headquarters and leaflet its highly paid staff this morning over the row, involving the sacking of a long-time worker for Aramark, which handles catering at the bank's plush art deco offices, according to the Independent.