costarios
24-05-2004, 10:55
Crude oil lower, lifting U.S. futures
Transport-related stocks higher in Europe
By Emily Church, CBS.MarketWatch.com
Last Update: 6:20 AM ET May 24, 2004
LONDON (CBS.MW) - U.S. stocks were heading for a brighter start on Monday as crude oil prices receded on expectations Saudi Arabia will raise its own production to cool the oil market.
Saudi comments over the weekend on lifting April output levels by around 10 percent starting in June knocked the London North Sea crude futures down around 1 percent and buoyed share prices.
German stocks were rallying 1.6 percent. French stocks were up around 1 percent; London stocks were also higher and Tokyo saw gains overnight.
The Dow industrial futures were up 65 points at 10,032 ahead of 6:30 a.m. Eastern.
Among the handful of bellwethers, Intel Corp. (INTC: news, chart, profile) was marked at $27.72 in euro trading in Frankfurt, up from a $27.55 close Friday; Microsoft (MSFT: news, chart, profile) rose to $26.10 from a $25.89 close. IBM (IBM: news, chart, profile) was at $87.57, up from an $87.13 close and Cisco Systems (CSCO: news, chart, profile) was at $21.74, up 10 cents.
Focus sectors/stocks
Transport-related stocks were among the top gainers in Europe as the crude price fell back. Auto manufacturers roared higher, with DaimlerChrysler (DCX: news, chart, profile) and Volkswagen (DE:766400: news, chart, profile) each around 2 percent higher.
However German airline Deutsche Lufthansa (DE:823212: news, chart, profile) fell 5 percent after announcing a rights offer will pay for Airbus A380 planes.
Alstom (ALS: news, chart, profile), the restructuring French engineering group, rallied over 8 percent in Paris trade Monday after the European Union said approval for any restructuring plan is contingent on it forming an industrial partnership.
M&A
SABMiller (UK:SAB: news, chart, profile) rose 2.1 percent in London after launching a $550 million offer for Chinese brewer Harbin, putting it into competition with Anheuser-Busch (BUD: news, chart, profile). SABMiller had earlier signaled that it would launch a bid for Harbin.
The board of Cazenove, the British investment bank, is expected Monday to discuss whether to enter takeover talks with rival banks, according to the Financial Times. Cazenove has received proposals from Lehman Brothers (LEH: news, chart, profile) the report noted, as well as a handful of other banks.
Broker calls
Deutsche Bank, looking at the box office take for Shrek 2, highlights video games maker Activision (ATVI: news, chart, profile). "Early demand for the video game is looking pretty decent already," it said. "The title has moved up on several key top-seller lists, including Amazon.com's PS2 top-seller list (number 4 as of Sunday night). Note that these data points are still too early to get a gauge on ultimate sell-through, but trends look encouraging."
UBS was more bearish on valuations for telecom equipment makers, and lowered its price target on a handful of stocks, including Cisco, Corning (GLW: news, chart, profile), Juniper Networks (JNPR: news, chart, profile), Lucent (LU: news, chart, profile) and Nortel (NT: news, chart, profile).
"We believe that slowing year over year growth in carrier capital expenditure, the potential impact from stock option expensing in 2005, and diminishing operating leverage are driving down sector valuations for the communications equipment vendors," UBS said.
"Now that most major U.S. and European telcos reported first quarter results, we conclude global capex growth is likely to slow in the second half of 2004 through 2005," the broker said. "Additionally, several equipment vendors either have begun or will commence growing expense levels commensurate with revenues. Thus, we do not expect vendors to generate the same level of margin and earnings per share growth that they achieved moving out of the downturn."
On Cisco, UBS left its revenue and earnings estimates unchanged, but cut its price target on the stock to $27 from $30.
Emily Church is London bureau chief of CBS.MarketWatch.com.
Transport-related stocks higher in Europe
By Emily Church, CBS.MarketWatch.com
Last Update: 6:20 AM ET May 24, 2004
LONDON (CBS.MW) - U.S. stocks were heading for a brighter start on Monday as crude oil prices receded on expectations Saudi Arabia will raise its own production to cool the oil market.
Saudi comments over the weekend on lifting April output levels by around 10 percent starting in June knocked the London North Sea crude futures down around 1 percent and buoyed share prices.
German stocks were rallying 1.6 percent. French stocks were up around 1 percent; London stocks were also higher and Tokyo saw gains overnight.
The Dow industrial futures were up 65 points at 10,032 ahead of 6:30 a.m. Eastern.
Among the handful of bellwethers, Intel Corp. (INTC: news, chart, profile) was marked at $27.72 in euro trading in Frankfurt, up from a $27.55 close Friday; Microsoft (MSFT: news, chart, profile) rose to $26.10 from a $25.89 close. IBM (IBM: news, chart, profile) was at $87.57, up from an $87.13 close and Cisco Systems (CSCO: news, chart, profile) was at $21.74, up 10 cents.
Focus sectors/stocks
Transport-related stocks were among the top gainers in Europe as the crude price fell back. Auto manufacturers roared higher, with DaimlerChrysler (DCX: news, chart, profile) and Volkswagen (DE:766400: news, chart, profile) each around 2 percent higher.
However German airline Deutsche Lufthansa (DE:823212: news, chart, profile) fell 5 percent after announcing a rights offer will pay for Airbus A380 planes.
Alstom (ALS: news, chart, profile), the restructuring French engineering group, rallied over 8 percent in Paris trade Monday after the European Union said approval for any restructuring plan is contingent on it forming an industrial partnership.
M&A
SABMiller (UK:SAB: news, chart, profile) rose 2.1 percent in London after launching a $550 million offer for Chinese brewer Harbin, putting it into competition with Anheuser-Busch (BUD: news, chart, profile). SABMiller had earlier signaled that it would launch a bid for Harbin.
The board of Cazenove, the British investment bank, is expected Monday to discuss whether to enter takeover talks with rival banks, according to the Financial Times. Cazenove has received proposals from Lehman Brothers (LEH: news, chart, profile) the report noted, as well as a handful of other banks.
Broker calls
Deutsche Bank, looking at the box office take for Shrek 2, highlights video games maker Activision (ATVI: news, chart, profile). "Early demand for the video game is looking pretty decent already," it said. "The title has moved up on several key top-seller lists, including Amazon.com's PS2 top-seller list (number 4 as of Sunday night). Note that these data points are still too early to get a gauge on ultimate sell-through, but trends look encouraging."
UBS was more bearish on valuations for telecom equipment makers, and lowered its price target on a handful of stocks, including Cisco, Corning (GLW: news, chart, profile), Juniper Networks (JNPR: news, chart, profile), Lucent (LU: news, chart, profile) and Nortel (NT: news, chart, profile).
"We believe that slowing year over year growth in carrier capital expenditure, the potential impact from stock option expensing in 2005, and diminishing operating leverage are driving down sector valuations for the communications equipment vendors," UBS said.
"Now that most major U.S. and European telcos reported first quarter results, we conclude global capex growth is likely to slow in the second half of 2004 through 2005," the broker said. "Additionally, several equipment vendors either have begun or will commence growing expense levels commensurate with revenues. Thus, we do not expect vendors to generate the same level of margin and earnings per share growth that they achieved moving out of the downturn."
On Cisco, UBS left its revenue and earnings estimates unchanged, but cut its price target on the stock to $27 from $30.
Emily Church is London bureau chief of CBS.MarketWatch.com.