US & World Daily Markets Financial Briefing 11-12-2006

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Mcdonald's Stocks mixed in early trading

NEW YORK - U.S. stocks were mixed early Monday, with a wave of deals and deal speculation greeting investors to start a week that will feature decisions from the Federal Reserve and Organization of Petroleum Exporting Countries.

In the opening minutes, the Dow Jones industrials rose 5.77 points to 12,313.26, the S&P 500 added .02 of a point to 1,409.86, and the Nasdaq eased 1.32 points to 2,436.04.

U.S. stocks closed higher on Friday in an uneven session, with the Dow industrials finishing 29 points higher, the S&P 500 rising 3 points and the Nasdaq Composite adding 10 points. Same-store sales figures out of McDonald's Corp. and nonfarm payrolls growth of 132,000 helped stocks rise.

"Looking through Friday's U.S. non-farm payrolls report we can find little that will cause the Fed to challenge its view that the economy remains robust, at least outside of the housing and auto sectors," said analysts from Deutsche Bank. The Fed will announce its interest rate decision on Tuesday.

Dollar strength continued on Monday, with the euro falling to $1.3191 and the yen down even more on speculation the Bank of Japan won't lift interest rates in December. The dollar rose to 116.91 yen, a two-week high.

The economic calendar is light on Monday, with wholesale inventories numbers for October due for release.

Ahead of Thursday's OPEC decision, crude oil futures fell 26 cents to $61.77 a barrel.

On a busy session for deal activity, Corus Group recommended a new offer from Brazil's Companhia Siderugica Nacionale valued at 11.4 billion pounds in cash and assumed debt. The offer is valued at around $20.20 per U.S.-listed share. The bid for Corus came just hours after it accepted a revised offer from India's Tata Steel.

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Citigroup reportedly launched a bid for Prudential plc's Egg Internet banking arm. Prudential confirmed it received a takeover approach for the unit, but didn't say from whom. Prudential, unrelated to the American insurer of the same name, said it's not interested in selling the division.

Home Depot is going to pay $100 million for a majority stake in China's HomeWay, according to a Financial Times report.

Smith & Nephew is expected to bid for U.S. rival Biomet by the Tuesday auction deadline, U.K. newspapers reported. Including debt, Smith & Nephew may offer $12 billion. It may face competition from Johnson & Johnson, Stryker and Zimmer.

Travel-booking company Sabre Holdings is on the auction block and could be sold to a buyer this week, The Wall Street Journal reported Monday.

Trimble Navigation agreed to buy @Road for $496 million, or $7.50 a share.

Gannett Co. may sell its U.K. newspaper unit Newsquest, according to a report in the Sunday Express.

Pearson agreed to sell 90 percent of its Pearson Government Solutions division to New York private equity Veritas Capital for $560 million in cash and $40 million in preferred stock.

LG.Philips LCD said the Korean Fair Trade Commission has visited its offices in Seoul while the Japan Fair Trade Commission has issued a notice to its Tokyo office and the U.S. Department of Justice issued a subpoena to its San Jose, Calif.-based office. The company said the probe is part of investigation into possible anticompetitive conduct in the LCD industry.

In international markets, the FTSE 100 rose 0.3 percent in London, and the Nikkei 225 closed 0.7 percent higher in Tokyo.

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AFX European summary - early afternoon

LONDON - Leading shares remained higher at midday, although off the day's highs, bolstered by M&A activity as Corus surged almost 5 pct on the back of a bidding war for the Anglo-Dutch steel giant, and with Wall Street expected to open higher following Friday's positive run, dealers said.

At lunchtime, the FTSE 100 was 9.8 points firmer at 6,162.2, with the wider market also in buoyant mood.

FRANKFURT - German shares were higher in midday trade buoyed by Friday's higher close on Wall Street and propelled by M&A speculation around German automakers and Continental, dealers said.

At 1.05 pm, the DAX 30 index was up 35.39 points or 0.55 pct at 6,462.80, after moving between 6,449 and 6,475.

PARIS - Shares remained broadly higher at midday, buoyed by Wall Street's gain on Friday, dealers said.

At 12.24 pm, the CAC-40 index was up 31.67 points or 0.59 pct at 5,415.83.  There were 35 stocks higher and five lower among those comprising the index. Volume was 2.17 bln eur.
 
AMSTERDAM - Share prices continued to rise in early afternoon trade boosted by US futures pointing to a positive open on Wall Street, dealers said.

At 1.16 pm, the AEX was up 3.0 points or 0.63 pct at 479.53, after opening at 478.0 and reaching a high of 479.98.

MILAN - Share prices were higher in midday trade, led by gains in BMPS on merger speculation, while Autostrade was lower amid concerns that plans to merge with Abertis could be dropped, dealers said.

At 12.24 pm, the Mibtel index rose 0.31 pct to 31,373 points and the S&P/Mib was up 0.43 pct at 40,835, while volumes stood at 2.02 bln eur.

MADRID - Share prices were higher midday, tracking other European markets, led by gains in Acerinox on sector M&A activity, dealers said.

At 12.05 pm, the IBEX-35 index was up 85.7 points at 14,162.0, after trading in a range of 14,116-14,201, on volume of 2.0 bln eur.

ZURICH - Share prices moved higher across-the-board in midday trade with sentiment bolstered by Wall Street's gains on Friday and this morning's positive newsflow, dealers said.

At 12.15 pm, the Swiss Market Index was up 55.08 points at 8,595.95, and the Swiss Performance Index up 43.28 points at 6,767.38.

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Asian shares close higher on Wall St rise

HONG KONG - Shares across the Asia-Pacific region closed higher, buoyed by positive November jobs data from the US released on Friday, dealers said.

Tokyo shares ended higher, following Wall Street's gains Friday and after the yen's retreat against the US dollar eased concern about exporters' earnings, dealers said.

The release of consumer confidence data for last month in the last hour of trading also encouraged investors, reducing their pessimism about consumer spending, dealers said. The consumer confidence index rose to 48.7 last month from 48.2 in October, rising for the second straight month.

The blue-chip Nikkei 225 Stock Average closed 110.17 points or 0.67 pct higher at 16,527.99, off a high of 16,608.97.

The broader TOPIX index of all first-section issues gained 11.63 points or 0.72 pct at 1,627.97, off a high of 1,631.93.

Dealers said investors had also been encouraged by the waning of expectations that an increase in interest rates is imminent.

Australian shares closed higher as investors were buoyed by the release of strong November jobs data in the US on Friday which led to a rally on Wall Street, dealers said.

Banking stocks led the local market higher, while selling in resource and energy companies capped its gain.

The S&P/ASX 200 rose 43.9 points or 0.81 pct to close at 5,469.7, off the day's high of 5,477.5 and above a low of 5,427.8.

Hong Kong shares were higher in afternoon trade, tracking Wall Street's rebound, dealers said.

At 3.25 pm the Hang Seng Index was up 180.16 points or 0.96 pct at 18,920.15.

In mainland China, A-shares in Shanghai and Shenzhen closed sharply higher on bargain-hunting after Friday's sharp declines, with banks and property developers in demand, dealers said.

The Shanghai A-share Index added 91.50 points or 4.16 pct to 2,292.04 on turnover of 36.75 bln yuan and the Shenzhen A-share Index was up 18.96 points or 3.74 pct at 525.31 on turnover of 17.74 bln yuan.

Seoul shares closed little changed in thin trade as caution emerged ahead of the US FOMC meeting and triple witching here later in the week, dealers said.

The market initially raised hopes that it may reclaim the 1,400 point level after a firmer Friday close on Wall Street and the won's further decline but early interest fizzled out toward the close, they noted.

The KOSPI index closed up 0.30 points or 0.02 pct at 1,390.73, after moving between 1,389.65 and 1,396.15.

The won closed at 926 against the dollar, compared with 920.30 in the previous session.

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Source - AFX News/Associated Press

Gold and silver prices fell Friday in choppy trading, making several big swings in response to movements by the U.S. dollar.

February gold settled $6 a troy ounce lower at $631 on the New York Mercantile Exchange.

Precious metals typically fall when the dollar rises, as they are regarded as alternative investments to the U.S. currency. In afternoon New York trading, the dollar was higher against the 12-nation euro, which bought $1.3200, down from $1.3280 late Thursday.

The dollar's recovery was in reponse to a Labor Department report Friday that said employers boosted payrolls by 132,000. Economic strength raises the chances that the U.S. Federal Reserve will hike interest rates, or at least keep them steady for longer, which makes the dollar a more attractive investment.

January platinum fell $17.10 to $1,107.80 an ounce.

March palladium gained $2.95 to $333.95 an ounce.

The most active March copper contract settled up 1-cent at $3.1120 per pound.

The January crude contract settled down 46 cents to $62.03 a barrel after rising as high as $63.65 but failing to break above $64.

January heating oil settled down 2.15 cents to close at $1.7573 a gallon after rising as high as $1.8190 a gallon.

January unleaded gasoline settled down 0.62 cent to $1.6213 a gallon.

January natural gas settled down 11.0 cents at $7.561 a million British thermal units.

On the New York Board of Trade, December Arabica coffee futures closed 0.05 cent lower at $1.2185 a pound.

March cocoa settled up $34 at $1,638 per metric ton.

March futures of raw sugar in foreign ports settled 0.15 cent higher at 11.37 cents a pound.

On the Chicago Board of Trade, December corn ended 4.25 cents lower at $3.5425 cents per bushel. January soybeans finished 6 cents lower at $6.56 per bushel. March wheat closed 10 cents lower at $4.8575 per bushel.

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