Wall St. Breakfast's Pre-Market Snapshot:
U.S. Futures As of 8:40 AM EST
S&P 500: +2.60; 1,458.10
NASDAQ 100: +1.50; 1,829.25
Dow: +34.00; 12,638.00
NIKKEI 225: -1.01%; 17,363.95 (-176.47)
HANG SENG: -0.19%; 20,340.97 (-39.24)
S&P/ASX 200: -0.36%; 6,135.80 (-22.40)
BSE SENSEX 30: +2.06%; 13,384.08 (+270.27)
FTSE 100: +0.32%; 6,436.70 (+20.30)
CAC 40: +0.55%; 5,780.78 (+31.84)
XETRA-DAX: +0.32%; 7,165.90 (+22.95)
Commodity Futures (Reuters/Jefferies CRB)
Oil: +0.50%; $64.17 (+$0.32)
Gold: +0.68%; $684.30 (+$4.60)
Natural Gas: +0.06%; $7.929 (+$0.005)
Silver: +0.83%; $13.97 (+$0.115)
U.S. Breaking News — see today's Wall Street Breakfast for earlier news
PPI Rises 1% on Energy and Food Price Gains, Core PPI is Flat
The U.S. Labor Department released March's PPI numbers this morning, showing a 1% overall gain, as producer prices were pushed higher by rising energy and food costs. The core PPI reading, which excludes food and energy prices, was flat, beating economist expectations that core prices would rise by 0.2%. The overall PPI reading of 1% was higher than the 0.8% rise economists surveyed by MarketWatch were predicting. According to Bloomberg, the core figures show that so far, corporations are absorbing higher energy prices themself, rather than passing them on to the consumer. Looking at the bigger picture, the PPI is up 3.2% over the recent 12 month period, its biggest year-over-year gain since August. On the other hand, core PPI is up 1.7% over the recent 12 months, down from 1.8% in the 12 months ending with February's data.
Sources: MarketWatch, Bloomberg
Commentary: U.S. Import Prices Rise Greater Than Expected 1.7%; Initial Claims Hit 8-Week High • Stock Ideas From Today's PPI Report • Soft PPI, Empire State Index Readings Send Futures Lower
Stocks/ETFs to watch: S&P 500 Index (NYSEARCA:SPY), Diamonds Trust Series 1 ETF (NYSEARCA:DIA), iShares Lehman Aggregate Bond (NYSEARCA:AGG)
Polo Ralph Lauren Spends $370 Million to Take Control of Its Japan Operations
Polo Ralph Lauren said this morning it will spend about $370 million to buy the outstanding 80% of Impact 21 Co., its Japanese licensee, and the outstanding 50% in its Japanese master license. In a move to exert more control and influence over product and distribution, the company said it would add stores and expand its department store presence in Japan as a result of the transaction. Japan is the company's largest market outside of the U.S., but still accounts for only 10% of its group sales vs. 70% in the U.S. President Roger Farah: "Our long-term strategies are to build Ralph Lauren into a global business that is evenly spread between Europe, United States and Asia... We will look to reinforce the brand’s image and elevate the distribution in Japan to better align with our business globally." Shares of Polo Ralph Lauren gained 1.2% yesterday, and are up 21% in 2007.
Sources: Press release, Bloomberg, Reuters
Commentary: Polo Ralph Lauren Corp.: Expanding the Brand • Ralph Lauren: Continued Strength in Brand Image • Ralph Lauren Is Undermining Its Brand
Stocks/ETFs to watch: Polo Ralph Lauren Corp. (NYSE:RL). Competitors: Jones Apparel Group Inc. (NYSE:JNY), Liz Claiborne Inc. (LIZ). ETFs: Consumer Discretionary SPDR ETF (NYSEARCA:XLY), PowerShares Dynamic Consumer Discretionary (NASDAQ:PEZ), Vanguard Consumer Discretionary VIPERs (NYSEARCA:VCR)
LaSalle Hotel Properties Raises Dividend by 21%
LaSalle Hotel Properties, a leading multi-operator real estate investment trust, announced today it has increased its monthly dividend by 21% to $0.17 per common share, to be paid for the months April, May and June. LaSalle's annualized dividend payout is now $2.04/share. Based on yesterday's close of $47.50, it has an annualized dividend yield of 4.3%. CFO Hans Weger commented the increase "reaffirms the Company's commitment to providing a reliable stream of income to our shareholders and our confidence in the ongoing performance of our portfolio." LaSalle says the April dividend will be paid on May 15, to shareholders of record on April 30. It reports Q1 results and presents its 2007 outlook next Wednesday after the market closes, with a conference call the following afternoon. Shares of LaSalle have traded between $40.01 - $49.24 over the past year.
Sources: Press release
Commentary: Housing Bubble and Real Estate Market Tracker • Institutional Investors Dumping REITs as Equity Office Deal Pressures Yields
Stocks/ETFs to watch: LaSalle Hotel Properties (NYSE:LHO). Competitors: FelCor Lodging Trust (NYSE:FCH), Hospitality Properties Trust (NYSE:HPT), Starwood Hotels & Resorts Worldwide (HOT)
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Asian Headlines (via Bloomberg.com)
• Asian Stocks Fall on Earnings Outlook; Samsung, Seven & I Drop, Sony Jumps Asian stocks fell after Samsung Electronics Co.'s earnings missed analyst estimates and Seven & I Holdings Co. reported profit lower than the company's forecast.
• Samsung Electronics First-Quarter Profit Falls 15 Percent on Chip Prices Samsung Electronics Co., Asia's largest maker of chips, flat screens and mobile phones, reported its biggest profit decline in a year and a half after a glut drove down semiconductor prices.
• Freeport Faces Rally at Grasberg Copper Mine, Workers Say; Output May Stop Output from Freeport-McMoRan Copper & Gold Inc.'s (NYSE:FCX) Grasberg mine in Indonesia may be disrupted next week when some workers at the world's second-largest copper mine plan a protest over wages. The price of the metal gained.
European Headlines (via Bloomberg.com)
• Stocks in Europe Rise, Led by BP, Statoil, as Oil Gains; Glaxo Advances European stocks advanced, led by energy companies and drugmakers after oil rose for a fourth day and Merck & Co. (NYSE:MRK) forecast earnings that topped analysts' estimates.
• Yen Rebounds From Record Low Against Euro as G-7 Ministers Gather in U.S. The yen rebounded from a record low against the euro and gained the most versus the dollar in two weeks on speculation Group of Seven finance ministers will suggest a recent slump in Japan's currency has gone too far.
• Altadis Shares Rise on Reports CVC Plans to Beat Imperial Tobacco Offer Shares of Altadis SA, the Spanish maker of Gauloises cigarettes, rose the most in a month after newspapers reported that CVC Capital Partners Ltd. plans to beat Imperial Tobacco Group Plc's (ITY) offer for the company.
• European March Car Sales Decline 0.3 Percent, Led by Renault, Daimler, BMW European car sales fell for the second straight month, led by Renault SA, DaimlerChrysler AG (DCX) and Bayerische Motoren Werke AG, as higher taxes caused consumer buying in Germany to plunge.
• J Sainsbury May Use Property to Pay Investors After Leveraged Buyout Fails J Sainsbury Plc may sell part of its 7.5 billion pounds ($15 billion) of real estate and use the money to pay investors after the U.K. supermarket chain spurned a takeover bid from CVC Capital Partners Ltd.