Wall St. Breakfast's Pre-Market Snapshot:
U.S. Futures As of 8:33 AM ET
S&P 500: +15.70; 1,487.10
NASDAQ 100: +23.50; 2,124.00
Dow: +112; 13,445
NIKKEI 225: +1.08%; 15,680.67 (+166.93)
HANG SENG: +0.57%; 28,643.61 (+161.07)
SHANGHAI SE COMPOSITE: -2.63%; 4,871.78 (-131.56)
BSE SENSEX 30: +1.89%; 19,363.19 (+359.93)
FTSE 100: +0.89%; 6,405.70 (+56.60)
CAC 40: +0.98%; 5,652.78 (+54.67)
XETRA-DAX: +1.38%; 7,872.67 (+107.48)
Commodity Futures (Reuters/Jefferies CRB)
Oil: -1.74%; $89.43 (-$1.58)
Gold: -0.04%; $802.00 (-$0.30)
Natural Gas: +1.01%; $7.53 (+$0.08)
Silver: -0.59%; $14.36 (-$0.085)
U.S. Breaking Newssee today's Wall Street Breakfast for earlier news
Tiffany Shines with Beat and Raise Q3
Shares of Tiffany are trading higher by 3.2% to $50.30 in thin pre-market activity, following the company's report of better-than-expected Q3 earnings and upward revised fiscal-2007 EPS guidance to the upside of the consensus estimate. Tiffany's Q3 net income more than tripled to $98.9 million, or $0.71/share ($0.27/share ex-items), beating analyst estimates of $0.25/share. Tiffany earned $0.48/share from the sale-leaseback of its Tokyo flagship store to Goldman Sachs. Sales climbed 18% to $627.3M, also beating expectations of $616.2M. "We are pleased with our overall businesses in the U.S. and internationally, as well as with product performance ranging from robust diamond jewelry sales to a healthy increase in silver jewelry sales. We are now one month into the all-important November-December holiday season and are pleased with overall sales growth that is meeting our expectations," commented CEO Michael J. Kowalski. (Earnings call transcript later today). Tiffany raised its fiscal-2007 adjusted EPS guidance to $2.25 to $2.30, from $2.22 to $2.27 previously. Analysts were expecting $2.29/share. FY sales are now seen up 15% (est. $3.05B), versus its earlier target of 14% growth and analyst estimates of $2.97B. Tiffany said year-to-date through Nov. 29 it has repurchased 7.51M shares of its common stock for $364.5M and has $331M available for repurchases through Dec. 2009. Shares of Tiffany fell 3% to $48.75 on Thursday.
Commentary: Luxury Retailers Immune to Holiday Spending Slowdown - Reuters • High Energy Costs Could Rein In Holiday Spending - Survey • Baron Funds: Tiffany and Ralph Lauren Should Outperform
Stocks to watch: TIF. ETFs: ROB
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Today's Market (via Sam Collins, ChangeWave.com)
Recap of Yesterday's Action
It seems like a long time since we've had a three-day rally. And even though yesterday's buying was rather tepid compared to Tuesday and Wednesday's, it was impressive in its ability to hold a gain against waves of profit-taking and less-than-favorable news.
Even before the market opened Thursday, there was a run of bad news starting with a spike in crude oil's price (due to a major explosion and fire at a key pipeline bringing oil into the U.S. from Canada) and a drop in profits at Sears Holdings (SHLD) of 99%.
But later, it was reported that weekly jobless claims rose to a near two-year high, and the Commerce Department said that builders had cut prices the most in 26 years in October -- boosting sales of new homes by 1.7%. On balance, both were considered bullish since they would put more pressure on the Fed to reduce interest rates again in December.
So, yesterday turned out to be a real winner with the Dow Industrials up 22 points at 13,311, the S&P 500 up 0.70 at 1,470, and the Nasdaq gaining five points to close at 2,668. More than 1.3 billion shares traded on the NYSE, and 2.1 billion traded on the Nasdaq. Breadth was negative on both major exchanges by about 8-to-7.
Crude oil (January contract) closed at $91.04, up 39 cents a barrel, after an intraday high where it was up more than $4. The Amex Energy SPDR (XLE) gained 80 cents, closing at $73.25. Gold for December delivery fell by $5 per troy ounce, closing at $795.30, and the Philly Gold/Silver Index [XAU] closed at $172.83, off $1.14.
What the Markets Are Saying
Early this week, the market (via the S&P 500) reversed dramatically from 1,407.22 -- amazingly within a fraction of another closing low made on Aug. 15 at 1,406.70. This tells us that there are serious buyers at that level.
But despite the significance of this reversal, we will more than likely have a test of the low within the next 10 days. The test will be of a line drawn from 1,374 (its reversal in March) to 1,407, which forms a triple-bottom, and it should hold since a triple-bottom is one of the most powerful of support patterns.
The sentiment numbers should help to hold the lows since the public, as measured by the American Association of Individual Investors' (AAII) numbers, is more fearful now than at any other time this year while insiders continue to be heavy buyers.
Today's Trading Landscape
Earnings are expected from Big Lots (BIG), Kirkland's (KIRK), Royal Bank of Canada (RY), Tiffany & Co. (TIF) and TRC Companies (TRR). And the following economic reports are due: Personal Income and Spending and the core Personal Consumption Expenditures (or PCE, Fed's favorite inflation indicator) before the opening, followed by the Chicago Purchasing Managers numbers.
Dell (DELL) reported a 27% increase in Q3 net but had a glum forecast -- this could have a negative impact on technology stocks. Fed Chairman Ben Bernanke hinted last night that another rate cut may be necessary, and so stocks this morning should open higher buoyed both by the Bernanke speech and news that a deal between the mortgage industry and the U.S. may freeze interest rates on troubled loans.
Asian Headlines (via Bloomberg.com)
Asian Stocks Climb on U.S. Rate Cut Speculation; Banks, JFE, BHP Advance Asian stocks rose, trimming the biggest monthly decline in more than a year, after Federal Reserve Chairman Ben S. Bernanke reinforced speculation that U.S. policy makers will cut borrowing costs to bolster growth.
China Railway Raises $2.5 Billion in Hong Kong Share Offering, People Say China Railway Group, the world's third-largest construction company, raised more than HK$19.22 billion ($2.5 billion) pricing a Hong Kong share sale at the top end, three people familiar with the transaction said.
Proton Posts First Profit in Six Quarters as New Sedan Model Lifts Sales Proton Holdings Bhd., Malaysia's state-owned carmaker, posted its first profit in six quarters, after making a one-time gain from write-backs related to funds set aside for product development.
India's Economy Expanded 8.9% in Last Quarter, Slowest Pace Since 2006 India's economy grew at the slowest pace since the final quarter of 2006, signaling the central bank may soon end three years of interest-rate increases.
Asian Bond Sales Fall 91%, Most Since 2002, on Turmoil in Credit Markets Asian overseas bond sales fell the most in almost six years in November, as global credit-market losses led investors to shun higher-yielding assets.
European Headlines (via Bloomberg.com)
Europe's November Inflation Rate Climbs to 3%, Adding to Pressure on ECB European inflation accelerated in November to the fastest in more than six years, adding pressure on the European Central Bank to raise interest rates even as economic expansion cools.
Global Stocks, U.S. Futures Gain; Schneider, Citigroup, Nintendo Advance Global stocks rose, trimming the biggest monthly decline in almost five years, after Federal Reserve Chairman Ben S. Bernanke signaled he's open to cutting interest rates. U.S. index futures increased.
Eni Agrees to Buy Burren Energy; U.K. Oil Company Valued at $3.6 Billion Eni SpA, Italy's biggest oil company, agreed to buy Burren Energy Plc for 1.74 billion pounds ($3.60 billion) in cash to add production in Congo and Turkmenistan.
Fortis to Raise $3.7 Billion for ABN Takeover by Selling Convertible Bonds Fortis, part of the group that bought ABN Amro Holding NV in Europe's biggest-ever banking takeover, is raising 2.5 billion euros ($3.7 billion) by selling bonds convertible into shares to help pay for the purchase.
Randstad May Offer to Buy Vedior, Create Second-Biggest Staffing Company Randstad Holding NV may offer to buy Vedior NV, a combination that would create the world's second- largest staffing company by sales. Vedior had a record gain.
European Government Bonds Headed for Biggest Monthly Gain in 3 1/2 Years European notes headed for their biggest monthly gain in more than 3 1/2 years as the region's central bank announced additional steps to counter ``tensions'' in money markets, fueling demand for the safest assets.