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 |  Subject: ADVFN: Evening Euro Markets Bulletin - Thursday 07 Jan 2010  Thu Jan 07, 2010 5:41 pm | |
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Footsie flatlines
Market Movers
FTSE 100 5,526.72 -0.06%
techMARK 1,594.49 +0.35%
FTSE 250 9,630.38 +0.43%
A late afternoon rally fizzled out to leave London's blue chip index little changed on the day.
Banks emerged from a sticky start as the day's best performers led by Barclays and Lloyds Bank, which both received decent write-ups in an otherwise cautious broker note from Keefe, Bruyette & Woods. It suggests European banks will struggle to achieve growth in 2010.
Royal Bank of Scotland is lower despite reports there are possibly three buyers interested in buying its RBS Sempra joint venture for about $4bn.
Food retailers Sainsbury and Morrison’s are going well after Sainsbury said a record Christmas performance completed a strong third quarter in which like-for-like sales, excluding fuel, rose by 3.7%. Like-for-like sales, including fuel, rose by 3.8% in the 13 weeks to 2 January, while like-for-like sales excluding fuel and VAT were up by 4.2%.
In contrast, clothes sellers Next and Marks & Spencer are left on the shelf after their trading updates earlier this week.
Building supplies giant Wolseley is in demand for after UBS upgraded to buy from neutral. Accountancy software supplier Sage gets a similar upgrade from the Swiss bank.
In the media sector Yellow Pages publisher Yell is looking decidedly off colour after Goldman Sachs cut the stock to ‘sell’ from ‘neutral’ but ITV receives a boost from Goldman added it to its ‘conviction buy’ list.
Sweeteners firm Tate & Lyle sees its share price dissolve after Credit Suisse cut its rating from ‘outperform’ to ‘neutral’.
Investors cooled on National Grid shares after the gas and electricity pipeline grid operator issued its second gas balancing alert after heavy snowfall in the UK had the arrows up to the company’s dials. The company predicted demand for gas would hit a new record of 456.7m cubic metres today.
Housebuilders have got a boost from Persimmon, which saw a rise in the number of home sales on which it achieved completions in the second half of 2009, but said it remains cautious on mortgage availability and the general economic situation. The shares climb higher, taking sector peers Barratt Developments, Persimmon and Taylor Wimpey with them.
Drugs firm AstraZeneca has come to an agreement with Israel-based rival Teva Pharmaceuticals generic version of Astra’s Nexium ulcer capsules. Astra will withdraw its patent litigation against Teva and has granted Teva a licence to enter the US market with its generic esomeprazole on 27 May 2014, subject to regulatory approval, or earlier in certain circumstances.
Corporate infrastructure giant Autonomy has won what it termed ‘a significant licence agreement’ with UK defence firm BAE Systems. As is usually the case with Autonomy, financial details were not disclosed, though it went so far as to reveal that the contract award was for a seven figure sum.
Business is finally stabilising all over the world for recruitment firm Hays, while Asia Pacific has seen a modest quarter on quarter improvement in demand. While the quarter on quarter picture is looking better, the year on year comparisons continue to make miserable reading.
Sportswear fashion seller JD Sports expects full-year profit before tax and exceptional items to significantly exceed current market forecasts. |
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Digital TV set-top box maker Pace said it is on target to meet management expectations for the twelve month ended 31 December.
Fund and wealth management operator Rathbone Brothers saw funds under management rise in 2009 despite net redemptions in its Unit Trust division.
Engineering and construction group Costain said trading during the final quarter of 2009, and for the year as a whole, remained in-line with the board's expectations.
Specialist insurer and reinsurer Beazley, which took a £49.8m foreign exchange related hit to profits last year, has moved to reduce the impact of currency movements by matching the group’s underwriting capital by currency to the principal underlying currencies of its written premiums.
Laundry and workwear firm Davis Service Group has acquired a Scandinavian matting provider and a German workwear business for a combined total of £44.5m.
Flexible risers and flowlines designer Wellstream Holdings said earnings for 2009 will be broadly in line with expectations.
Cinema chain operator Cineworld is rubbing its hands with glee at the prospect of more 3D films after box office returns rose well above the rate of inflation in 2009.
The practice of storing stem cells as a medical safety net is growing, if figures from Dutch firm Cryo-Save are anything to go by.
Loss-making speciality pharmaceuticals firm ProStrakan expects to make an operating profit in 2010 on the back of continued strong revenue growth. The board has reiterated guidance of total revenues of between £78m and £79m for 2009, which would represent an improvement of around 40% on 2008.
FTSE 100 - Risers
Lloyds Banking Group (LLOY) 56.93p +4.29%
Wolseley (WOS) 1,410.00p +3.60%
Sainsbury (J) (SBRY) 328.20p +3.21%
Barclays (BARC) 315.50p +2.77%
FTSE 100 - Fallers
Prudential (PRU) 628.50p -2.63%
Vodafone Group (VOD) 138.80p -2.60%
Standard Life (SL.) 210.50p -2.55%
National Grid (NG.) 652.50p -2.25%
FTSE 250 - Risers
Melrose Resources (MRS) 320.00p +7.20%
Persimmon (PSN) 500.00p +6.61%
Fidessa (FDSA) 1,295.00p +6.58%
Bodycote (BOY) 180.00p +6.51%
FTSE 250 - Fallers
Tate & Lyle (TATE) 418.70p -6.44%
888 Holdings (888) 109.00p -4.72%
Paragon Group Of Companies (PAG) 126.30p -4.54%
Inchcape (INCH) 28.90p -3.41% |
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| | US Markets |
Stocks Little Changed In Mid- Morning Trading
Stocks are near the flatline in mid-morning trading on Thursday, recovering from some initial profit taking. The major averages are mixed after a largely in-line weekly jobless claims report released ahead of the opening bell this morning.
This morning, the Labor Department said that initial jobless claims for the week ended January 2nd inched up by 1,000 to 434,000 from last week’s revised total of 433,000. Economists expected a larger increase.
The report also showed that continuing claims, a statistic that measures the number of people receiving ongoing unemployment help, dropped 179,000 to 4.802 million.
The markets are now looking forward to Friday’s all-important monthly employment report, with today’s movement coming as traders position themselves for the data.
On the corporate front, same-store sales figures for December were mixed. Saks Inc. (SAKS) reported that its comparable sales rose by nearly 10 percent, Kohl`s Corp.(KSS) sales were up by more than 4 percent, while Barnes & Noble Inc.(BKS) saw sales slip by just over 5 percent.
In earnings news, Bed Bath & Beyond (BBBY) reported third quarter earnings that bested analyst estimates, while its fourth quarter and full-year EPS forecast also soundly beat analyst projections.
Home-builder Lennar Corp. (LEN) announced a fourth quarter profit compared to a heavy loss in the same period last year. The bottom-line, along with quarterly revenues, handedly beat Street estimates.
The Dow is currently up by 13.15 to 10,586.83, the S&P 500 is up by 0.77 points to 1,137.91 while the Nasdaq is down by 3.16 to 2,297.93.
Sector News
Trucking stocks are some of the morning’s worst performers, with the Dow Jones Trucking Index posting a loss of 1.3 percent. The index is down for a third straight session, setting a one-month intraday low.
Electronic storage, gold and semiconductor stocks are also under pressure, while the day’s losses are being moderated by gains in airline stocks. The NYSE Arca Airline Index is up by 2.3 percent, setting a fresh twenty-two month intraday high.
Housing, health insurance and banking stocks are also notably higher, further helping to offset the losses in the major averages. |
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| | European Markets |
Banks lead fight back
Stocks finished little changed Thursday as a recovery from early losses on Wall Street fed through to bourses this side of the pond.
Frankfurt ended the session down 14 points at 6,019, Paris fell just 1 to 4,012, while the Swiss exchange lost 4 points to close at 6,555.
Strength among US financial and retail plays helped the Dow Jones erase a near-70-point deficit to trade in the blue for a time.
Deutsche Bank and Credit Agricole, which had fallen earlier, ended higher, while Societe Generale and BNP Paribas extended their leads. Commerzbank rose almost 5%.
Over here, investors took in news that business and consumer confidence in the 16-nation eurozone improved further in December. The economic sentiment indicator increased to 91.3 points, up 2.5 points from November.
The business climate indicator stood at minus 1.22 points, better than November’s minus 1.53 points.
But on the downside, retail sales in the region dropped 1.2% month-on-month in November, more than analysts had been expecting. The annual fall came to 4%, after a 1.3% drop in October.
Elsewhere, Bank of England policymakers decided against tinkering with monetary policy at their first meeting of 2010, keeping interest rates at 0.5% and quantitative easing (QE) at £200bn.
'The Committee expects the announced programme to take another month to complete,' read a short statement midday Thursday. 'The scale of the programme will be kept under review.' |
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| | Broker tips |
Miners, Tate & Lyle
Cazenove remains ‘overweight’ on the mining sector and expects some aggressive increases to consensus EPS forecasts for 2010.
Last year was a ‘tremendous’ one for mining stocks and the broker believes some favourable, ‘albeit slightly tired themes’ remain, like BRIC economic growth, infrastructure spend, US/European restocking and supply issues amongst the macro drivers.
‘The biggest recent positive driver has been the massive injection of money into commodity focussed funds and perhaps the key question will be how long this can continue,’ says Caz.
‘Our intuitive view would be for at least six months or until global interest rates begin to rise, which feels unlikely until tangible signs of Western industrial demand and/or inflation emerge.’
There are three recommendation changes. Vedanta is raised to ‘outperform’ from ‘in-line’ on valuation grounds and growth, while BHP Billiton is cut to ‘in-line’ from ‘outperform’ and ENRC to ‘underperform’ from ‘in-line’.
Rio Tinto, Xstrata and Antofagasta stay as ‘outperform’ based on growth potential, commodity exposure and valuation, with Kazakhmys rated the same on valuation grounds.
Anglo American, Fresnillo and Lonmin are kept as ‘in-line’.
The annual round of price setting for sweeteners is not going so well, Credit Suisse reckons, prompting the Swiss bank to downgrade Tate & Lyle.
With sweetener prices expected to be down by around 15%, Credit Suisse (CS) has chopped its earnings forecast for fiscal 2010/11 by £20m for sugar and sweeteners firm Tate & Lyle (T&L).
CS’s earnings per share forecast for the Splenda sweetener maker has been trimmed accordingly by 6%.
‘With pricing down 15% and raw materials flat, we have lower profits than we were originally expecting,’ explained CS analyst Charlie Mills.
Despite downgrading the stock from ‘outperform’ to ‘neutral’, CS has left its price target unchanged at 550p, though it has removed it from its focus list ahead of the T&L trading update on 28 January. |
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