SHfn@The Bell: North American Market Wrap Up
Oct 30, 2003
Dear StockHouse Member,
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Market Preview
Ingram Micro (NYSE: IM)
The technology products company reported lower third quarter pro forma earnings that missed analysts' expectations. Ingram Micro said it earned nine cents a share on sales of $5.21 billion, against estimates for earnings of 16 cents per share on $5.28 billion in sales. Looking ahead, the company expects to report fourth quarter pro forma profit of 21 cents to 24 cents a share on sales of $5.7 billion. The current estimates predicted 21 cents per share on sales of $5.58 billion.
Coinstar (NASDAQ: CSTR)
The maker of coin counting machines reported Q3 earnings of $6.9 million or 32 cents per share, compared with year before earnings of $8.8 million or 38 cents per share a year ago. Sales improved to $48.7 million from $42.9 million.
Word on The Street
"All the numbers we saw this morning were good for the market's purposes," Tom Schrader, head of listed trading at Legg Mason told CNN Money. "GDP growth was certainly positive. Maybe there was a little disappointment that jobless claims didn't drop more, which doesn't bode well for next week's monthly unemployment number."
| Projected Economic Releases |
| Release |
Time |
Period |
Forecast Vs. Previous |
| Personal Income |
8:30 |
Sep |
0.2% vs. 0.2% |
| Personal Spending |
8:30 |
Sep |
-0.1% vs. 0.8% |
| Michigan Sentiment - Rev |
9:45 |
Oct |
89.5 vs. 89.4 |
| Chicago PMI |
10:00 |
Oct |
54.5 vs. 51.2 |
| Help Wanted Index |
10:00 |
Sep |
38 vs. 37 |
Today in the Markets
| DJIA |
9786.61 |
+12.08 |
| NASDAQ |
1932.69 |
-3.87 |
| S&P 500 |
1046.94 |
-1.17 |
| S&P/TSX |
7734.41 |
+8.93 |
| S&P/TSX Venture |
1533.86 |
+1.21 |
Investors Shrug off GDP Advance
Stocks finished mixed on Thursday after a report said third quarter GDP rose at the fastest rate in almost twenty years. The blue chip stocks that make up the Dow industrials finished with a modest gain, while selling brought the Nasdaq composite to its first loss in four sessions. Selling took some early gains away from the indices as profit takers stepped in late in the session.
The Dow Jones Industrial Average added 12.08 points or 0.12% to 9786.61. The Nasdaq composite eased 3.87 points or 0.2% to 1932.69. The S&P 500 dipped 1.17 points or 0.11% to 1046.94. Volume on the NYSE amounted to 1.607 billion shares. At the Nasdaq, some 2.157 billion shares traded hands.
The U.S. economy expanded at an annual rate of 7.2% in the third quarter. That's far faster than economists' predictions of a 6.6% increase. The increase in gross domestic product, a measure of the total value of all goods and services produced, was attributed to strong consumer and business spending.
Initial claims for the week ending October 25 were under 400,000 for the fourth consecutive week. The number of new claims for state unemployment benefits eased 5,000 to 386,000 last week.
Cyclical stocks propelled gains on the Dow, as investors bought shares of companies that benefit during times of economic expansion. International Paper (NYSE: IP) gained 1.63% to $39.33. Honeywell (NYSE: HON) advanced 3.32% to $30.46.
ExxonMobile (NYSE: XOM) slid 3.99% to $36.60 after the company posted higher third quarter profits that nonetheless missed analysts' expectations. The largest publicly traded oil company said earnings increased to 55 cents per share, which was shy of expectations by seven cents a share on lower natural gas output.
Power One (NASDAQ: PWER) retreated 15.57% to $8.57 after the company warned its fourth quarter sales would be lower than some estimates. The company, a maker of equipment for converting electrical current for telecom equipment, expects revenues in the range of $60 million to $64 million.
Dynegy (NYSE: DYN) rallied 13.64% to $4.00 on a vastly improved earnings update. The company, which owns power generating plants and an Illinois utility, recorded a profit of $5 million or $2.69 per share, versus its year ago loss of $1.65 billion or $4.71 per share in the year ago period.
BMC Software (NYSE: BMC), a maker of enterprise software posted profits that doubled expectations. The company's shares jumped 9.32% to $17.12 after BMC announced forward guidance that outpaced expectations.
Providian Financial (NYSE: PVN) posted profits that outpaced expectations after markets closed Wednesday. However, analysts questioned the quality of earnings, because of some one time items. Providian shares slumped 14.15% to $11.16.
Capital One Financial (NYSE: COF) slid 5.84% to $59.68 after the number five issuer of VISA and MasterCard credit cards said its 2004 profits would fall to the low end of current Street projections.
Chiron (NASDAQ: CHIR) slid 4.13% to $54.31. The company revealed a loss of $19 million that stemmed from costs to purchase PowderJect Pharmaceuticals of the U.K. Moreover, the third largest U.S. biotechnology firm reported higher sales of its blood tests and 'flu vaccines.
In small cap trading, the Russell 2000 gave up 1.44 points or 0.27% to 530.37, while the S&P600 index fell 0.37 points or 0.14% to 256.74.
Some of the small cap stocks making big moves included Akamai (NASDAQ: AKAM). The company, which makes software for making and distributing web content, jumped 34.23% to $8.00 on volume of 29,376,879 after it posted sharply narrower losses for its third quarter.
InterCept (NASDAQ: ICPT) tumbled 15.78% to $9.82 on volume of 3,695,949 after the financial technology firm lowered its earnings guidance for 2003 and said it's considering the idea of taking itself private. The company cited operational cost overruns and slow conversions at its financial institution operations for the dim forecast.
In commodities trading on the New York Mercantile Exchange, December crude oil futures were down 44 cents to $28.47. December natural gas futures were off 14.8 cents to $4.71. December gold futures dropped $2.60 to $384.40 per ounce.
Gold and Energy Weigh on the TSX
Canadian markets finished little changed Thursday as a slide in gold and health stocks checked gains in the base metals and tech sectors. The advance on the TSX was led by a 2.4% gain in base metals and a 1.18% jump in consumer discretionary issues.
The TSX composite gained 8.93 points or 0.12% to 7739.41, and the small cap Venture index edged 1.21 points or 0.08% higher to 1533.86.
Before markets opened Biovail (TSX: T.BVF) reported disappointing quarterly earnings results. The largest Canadian publicly traded drug maker said it made $13 million or eight cents per share. That's lower than year ago earnings of $75 million or 49 cents a share. On a pro forma basis Biovail earned 22 cents against expectations for a profit of 39 cents per share. The news clipped the stock 9.89% to $31.60.
Investors sent shares of Agnico Eagle (TSX: T.AGE) plummeting 22.03% to $14.37. The mid-tier miner has had continuing troubles following a rock fall at its La Ronde mine in Northern Quebec. The company posted a larger-than-anticipated loss and said it would not meet 2003 production targets.
Placer Dome (TSX: T.PDG) finished 0.1% lower at $19.98 after the company said it had begun fresh talks with its partners in a stalled gold-copper project in Chile. The company said that higher metal prices had made the Cerro Casale deposit more attractive.
Suncor Energy (TSX: T.SU) rallied 1.48% to $27.35 after the company announced record production had powered a 60% increase in earnings for the September quarter. The company, which is known for its oil sands operations in Northern Alberta, said it earned 64 cents a share, or 10 cents better than the consensus estimate.
Petro-Canada (TSX: T.PCA) also reported its third quarter financial results Wednesday. The company, which has operations in South America, North Africa, the North Sea and in Canada, said strong energy prices drove profits to $1.13 per share. However, the company booked a $136 million charge for closing its Oakville, Ontario refinery. The number three oil producer and refiner in Canada gained 0.53% to $53.16.
EnCana (TSX: T.ECA) gave up 1.42% to $45.00 after Banc of America Securities cut its rating for the company to "neutral" from "buy."
Among the tech stocks, Nortel Networks (TSX: T.NT) added 2.07% to $5.93 and Descartes Systems (TSX: T.DSG) dropped 2.74% to $5.93.
Thomson Corp (TSX: T.TOC) announced better-than-expected quarterly earnings and said it would increase its dividend. Shares of the electronic publisher climbed 2.11% to $42.63. Revenues edged 3% higher to $2.09 billion on rising sales in its legal, educational, and scientific divisions, although the financial services revenues were on the decline.
In the industrial group, CP Rail (TSX: T.CP) said the strong Canadian loonie cost the company up to $53 million in lost sales. However, the rail operator still managed to post a profit increase of 45%. CP shares climbed 1.36% to $37.15.
The Canadian dollar was worth US$0.7606.
© 2003 Stockgroup Media Inc.
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 Preview for Canada
Manitoba Telecom (TSX: T.MBT)
The company said it had higher third quarter earnings as the result of improving sales in its wireless division. The company notched baseline earnings of 48 cents per share versus its year ago baseline earings of 45 cents per share.
| Projected Canadian Economic Releases |
| Release |
Time |
Period |
Forecast Vs. Previous |
| GDP at Basic Prices |
8:30 |
Aug |
-0.5% vs. 0.6% |
Top Financial News
GDP Growth Surges 7.2%
U.S. economic growth surged in the third quarter of 2003 to the fastest pace since in nearly two decades, the government said Thursday, coming in much stronger than economists expected.
CNN/Money
Biovail Shares Plunge on Disappointing Profit
Drug giant Biovail (TSX: T.BVF) saw its shares fall as much as 17 per cent before trading was halted 15 minutes into the trading day - fallout from an earnings report that fell far short of expectations.
CBC News
MediaScan: Top Stories
ExxonMobile's Net Rises 38%
Financial Times / - ExxonMobil (NYSE: XOM), the world's largest listed energy company, said on Thursday that high oil and gas prices as well as improved refining margins had boosted third-quarter profits by 38 per cent.
More Red Ink for Martha Stewart
TheStreet.com / - Martha Stewart Living (NYSE: MSO) swung to a $3.8 million loss in the third quarter as its once-high-margin publishing unit nearly stopped earning money.
Massachusetts Fires Putnam
CBS MarketWatch / - The Massachusetts state pension board on Thursday voted to fire Putnam Investments as a money manager.
CPR Pinched by Loonie, Ready for Strong Q4
Ottawa Business Journal / - Canadian Pacific Railway Co. (TSX: T.CP), the nation's second-largest railway, reported stronger profits for its Q3 on Thursday despite the negative impact of a strong loonie on its revenues.
Travel Agents File $1.7 Billion Claim Against Air Canada
CBC News / - An association representing 3,700 travel agencies has filed a $1.7-billion claim against Air Canada (TSX: T.AC).
Media Scan: Opinions & Views
The Fund Industry is Broken
MSN MoneyCentral /- And it can't be fixed without some major changes. But there are some key questions you can ask the fund companies you deal with to protect yourself.
How Green is the White House?
BusinessWeek /- Even if global warming isn't real, the rhetoric over President George W. Bush's environmental record alone is hot enough to raise the temperature in Washington.
As Togas Go, Kozlowski is No Belushi
CBS MarketWatch /- Wall Street ready for new era of decadence. John Belushi must be rolling over in his grave.
McGuinty's Choice
Financial Post /- Ontario's Liberals came to power with a promise to hike spending by $5.4-billion. But yesterday, it was announced the province faces a stubborn $5.6-billion deficit. What is the new Premier to do?
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