Markets & Finance

Stocks End Mixed


Stocks ended mixed on Thursday with the Nasdaq index rising on upbeat corporate news from cellphone giant Nokia (NOK) and chipmaker National Semiconductor (NSM). But blue chips were pulled down by weakness in Coca-Cola (KO) and Procter & Gamble (PG).

The Dow Jones industrial average was off j24.26 points, or 0.24%, to 10,289.10. But the broader Standard & Poor's 500 index was up 2.11 points, or 0.19%, to 1,118.38. The Nasdaq composite index was up 19.01 points, or 1.03%, to 1,869.65.

Looking ahead to Friday, investors will turn their attention to several important economic data reports in the next session. Consumer prices at the wholesale level are expected to have shown a rise of 0.2% in August vs. a 0.1% increase in July, according to economic research outfit Informa Global Markets. The U.S. trade deficit, meantime, is expected to have shrunk in July to $50 billion from $55.8 billion in June.

The earnings docket is light, however. Among the companies due to report results on Friday is real estate concern Forest City Enterprises (FCEA)

Helping the Nasdaq and the broader market on Thursday was news that Finnish cellphone giant Nokia (NOK) raised its outlook for third-quarter sales and profits, thanks to strong demand for mobile phones.

But Wall Streeters said the mini-tech really gained momentum after chipmaker National Semiconductor (NSM) posted quarterly earnings that topped expectations. However, the company also warned that second-quarter sales would fall as much as 10% from first quarter levels.

The Dow was lower after Credit Suisse First Boston lowered its investment rating on Coca-Cola to neutral from outperform, citing a "more challenging" volume environment in North America and Europe.

Even though consumer products giant Procter & Gamble (PG) said it would meet quarterly profit guidance, the stock fell as investors were hoping for more bullish news.

Keeping a lid on stocks was news that crude oil futures strengthened $1.38 to $44.20 a barrel after reports showing a greater-than-expected drop in crude inventories.

And not all news from the tech sector was upbeat. Texas Instruments (TXN), the world's biggest maker of chips for cellphones, lowered its revenue guidance. While TI's revenue forecast disappointed investors, the company did confirm that it would meet its profit guidance. The stock was higher on the Nokia news.

In economic news, July wholesale inventories jumped 1.3%, compared with a 1.1% rise in June. The markets expected a more modest increase of 0.6%. Sales rose 0.5% from June, up from a revised modest 0.2% gain (previously flat). The inventory-to-sales ratio edged up to 1.16 from 1.15 seen a month ago.

A weekly report on first-time unemployment filings suggested the U.S. labor picture is brightening. Initial U.S. jobless claims fell 44,000 to 319,000 for the week ended Sept. 4, which was well below forecasts and follows a four-month high of 363,000 in the prior period. "The overall report is consistent with moderate job growth, with claims down 12% from a year ago and well below the 400,000 boom/bust line," says economic research outfit Informa Global Markets.

In other stocks news, steelmaker Nucor (NUE) increased its quarterly profit forecast thanks to wider margins due to higher steel prices.

On the down side, clothing retailer Charlotte Russe (CHIC) cut its quarterly profit and sales forecast after a discouraging back-to-school season.

CBRL Group (CBRL), the name behind Cracker Barrel Old Country Store restaurants, posted lower quarterly earnings. The company also said it would pay $8.7 million to settle a lawsuit charging discrimination and labor law violations at certain restaurants.

On Wednesday, traders paid close attention to Federal Reserve Chairman Alan Greenspan, who offered reassuring words about the U.S. economy. But Informal Global Markets noted there is "nothing here to suggest that the Fed will not follow its plan to raise rates gradually to a more neutral level," Informa says. The Fed's rate-setting committee is scheduled to meet on Sept. 21 when it is widely expected to increase borrowing costs by another quarter percentage point.

Treasury Market

U.S. Treasuries finished mostly lower in a choppy session. After moving lower late in the session after a new Al Qaeda video tape appeared on Al Jazeera, says Informa Global Markets, yields climbed into the close. Market players were disappointed with the results of the Treasury's 10-year note auction.

In other economics news, the Chicago Fed released its monthly Midwest Manufacturing Index, which fell 0.6% in July to 115.1, vs. 115.8 in June (revised 1.0% in June). The Federal Reserve Board's industrial production index for manufacturing rose 0.5% in July. Also, regional output in July rose 5.8% compared with last year slightly more than the nation"s 5.5% rise.

World Markets

European stock markets closed lower on Thursday. The Financial Times-Stock Exchange 100 index in London was off 20.40 points, or 0.45%, to 4,538.00 as a deadly car bombing in Jakarta, Indonesia, heightened terrorism fears. Compass Group was lower after the company said pressure on prices and unexpected costs will trim fiscal year operating profit.

Germany's DAX index lost 32.94 points, or 0.85%, to 3,851.22. Hannover Re was lower as company officials expect 2004 earnings to be at the lower end of the company's forecast range due to higher costs caused by hurricanes Charley and Frances in the U.S. Allianz and Munich Red fell in sympathy with Hannover. DaimlerChrysler was lower on a report that German new car sales fell 3.1% in August due to higher oil prices and lower consumer confidence.

In Paris, the CAC 40 index was down 25.53 points, or 0.69%, to 3,652.02. Cap Gemini was lower as company said its first half loss widened due to cost overruns on some North American contracts. Havas was lower on reports the company will bid an undisclosed amount for New York-based Grey Global advertising.

Asian markets finished lower on Thursday. Japan's Nikkei 225 index lost 108.23 points, or 0.86%, to close at 11,170.96. Japan's private sector machinery orders fell 11.3% month over month in July. Recent gainers fell on profit-taking, with shipping firm Mitsui O.S.K. sinking 2.25% while NTT dropped 1.46% after Nihon Keizai reported that KDDI would launch a cheaper fixed-line phone service than NTT by March. UFJ Holdings was down 2.11% on news that it is set for a half-year loss of over US$6 billion. On the economic front, Japan's current account surplus rose 8.2% year over year in July.

In Hong Kong, the Hang Seng index lost 107.76 points, or 0.83%, to close at 12,942.20 with properties continuing to lose ground.


Steve Ballmer, Power Forward
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