Credit Suisse - Ranbaxy
Thursday, May 03, 2007
Kotak - Reliance Communications , I-Flex Solutions, JSW Steel, Canara Bank, Mphasis, Castrol, Glaxo, Gateway Distripaks, Dredging & more...
Reliance Communications: 4QFY07 results - forget the bottom line; focus on the top line
i-flex solutions: Results below expectations. Valuations are expensive. Maintain Underperform rating
JSW Steel: 4Q results better than expected; expansion to 10 mn tpa to add substantial value in long-term
Canara Bank: Disappoints despite higher than expected profit as quality suffers
Mphasis BFL: Steady 4QFY07 performance'investments may drag margins in the near-term. Maintain In-Line
Andhra Bank: Core performance remains on track, retain OP
Castrol India: Broadly in-line 1QCY07 results; retain OP with revised 12-month TP of Rs300
Glaxo SmithKline Consumer India: 1QCY07: Sales growth at 17.5% in line with management guidance and our estimates.
Gateway Distriparks: Numbers in-line, led by better performance of the CFS business
Dredging Corporation of India: Better-than-expected numbers due to large contract; outlook remains weak
Change in recommendations
Wockhardt: Expect 8% EPS growth in CY2007; lowering rating to U
Container Corporation: Lower volume growth in a robust macro environment possibly implies loss of market share to roads
Nicholas Piramal: Guidance is positive on topline; but below expectations on EPS
Automobiles: Apr 07 sales: FY2008 starts on a strong note for cars and LCVs; 2W and M&HCV growth slides
Economy: India's interest rate outlook: Expect SLR cut despite higher MSS ceiling
Robust vehicle sales numbers, positive global cues and two days of holidays charged the bulls to get off with a rousing start. The Sensex opened with a huge positive gap of 116 points at 13,988 and zoomed to cross the 14000 mark within a few minutes of trades. The mood was so positive that none of the Sensex components were down in early morning trades and the Sensex touched the intra-day high of 14107 on across-the-board buying. The market remained range-bound with a positive bias in the afternoon. Profit taking in a few select heavyweights saw the market ease towards the close but sustained buying in majority of the Sensex stocks prevented the index from falling further. The Sensex ended the session with decent gains of 206 points at 14078, while the Nifty added 56 points to close at 4144.
The breadth of the market was positive. Of the 2,659 stocks traded on the BSE, 1,547 stocks advanced, 1,024 stocks declined and 88 stocks ended unchanged. Among the sectoral indices the BSE Oil & Gas Index jumped 2.84% at 7338 followed by the BSE CG Index (up 1.85% at 10,063), the BSE Metal Index (up 1.83% at 10,015) and the BSE PSU Index (up 1.49% at 6499).
Barring a few select counters, most of the heavyweights ended at higher levels. Among the blue chips Bajaj Auto shot up by 4.34% at Rs2,551, Reliance Industries soared 4.04% at Rs1,623, Ranbaxy surged 3.42% at Rs384, Gujarat Ambuja Cement advanced by 3.14% at Rs122, Hero Honda added 3.08% at Rs705, Bharti Airtel moved up 2.72% at Rs834, Larsen and Toubro scaled up 2.65% at Rs1741 and Grasim was up 2.06% at Rs2,493. Among the laggards, Tata Motors dropped 2.18% at Rs734, HDFC Bank slipped 1.96% at Rs1,006, HLL tumbled 1.81% at Rs196 and Reliance Communication shed 1.12% at Rs472 while Wipro and Hindalco closed marginally lower.
Oil stocks were in the limelight and closed with strong gains. BPCL jumped 3.96% at Rs347, HPCL soared 3.65% at Rs280, Reliance Natural Resources surged 2.14% at Rs26 and IOC advanced by 1.90% at Rs449. Peronet LNG, ONGC, Gail and Reliance Petroleum gained marginally. Among the capital goods stocks, Triveni Engineering vaulted 8.73% at Rs52, Areva surged 8.71% at Rs1,289, Alstom Projects advanced 7.65% at Rs512 and Jyoti Structures gained 5.62% at Rs200.
Over 3.28 crore IFCI shares changed hands on the BSE followed by Tata Teleservices (1.70 crore shares), Nagarjuna Fertilizers (95.07 lakh shares), FSL (69.55 lakh shares) and Dish TV (56.84 lakh shares).
IFCI clocked a turnover of Rs154 crore on the BSE followed by Reliance Industries (Rs138 crore), Network 18 Fincap (Rs113 crore), Tech Mahindra (Rs113 crore) and Reliance Communication (Rs112 crore).
The Sensex, which was strong throughout the day, ended firm as buying continued for index pivotals, especially index heavyweight Reliance Industries (RIL), owing to a robust set of results from India Inc, rallying US markets, firm global markets and sustained buying from FIIs.
The 30-share BSE Sensex ended with a spurt of 185.95 points, at 14,058.32, as per a provisional closing. It had opened firm at 13,987.77, which was also its low for the day. It had eased a bit after touching a high of 14,104.47, in the late afternoon session of trades, as some profit-booking emerged at the higher levels.
The total turnover on BSE amounted to Rs 4413 crore.
The market-breadth, which reflects the overall health of the market, was strong. Smallcaps and mid-caps also contributed to the rally today. There were over 1.5 gainers for every loser on BSE. Against 1,535 scrips that advanced, 1,038 declined. Also, 95 scrips remained unchanged.
Among the Sensex pack, 22 advanced while the rest declined.
Auto major Bajaj Auto (BAL) jumped 4.70% to Rs 2559.90, and was the top-gainer. BAL’s board meeting is scheduled on 17 May 2007, in Mumbai and as per reports is “very likely” to include the demerger proposal on its agenda. The proposal is intended to unlock value for shareholders by separting the manufacturing and financial assets of Bajaj Auto into two entities.
Meanwhile, Bajaj Auto continued its downward spiral in motorcycle sales for the third consecutive month this year, with its April numbers, including exports, declining by 13% compared to the same month last year. The company said its bike sales in April stood at 1,64,304 units against 1,88,518 units (inclusive of exports) in the same month last year, down 13%. Total two-wheeler sales also registered a dip of 13% at 1,65,692 units against 1,90,964 units last year, BAL said.
Three-wheeler sales, however, were up 15% at 24,360 units as against 21,159 units in the corresponding month last year, the company added. BAL said exports during the month jumped by 64%.
Hero Honda gained 2.69% to Rs 702, as bike sales improved in April. Hero Honda reported a 4.86% increase in vehicle sales during April 2007 at 2,62,544 units against 2,50,366 units in the same month last year. “We have been consistently doing better than industry numbers for the past few months and the momentum has been sustained in the first month of the new financial year as well. We expect to maintain this growth momentum in the coming years as well,” Hero Honda Vice-President (marketing and sales) Anil Dua said in the statement. Hero Honda’s growth is in contrast to rival Bajaj Auto continuing its downward spiral in motorcycle sales for the third consecutive month this year, with the latter's April numbers, including exports, declining 13% compared with the same month last year.
Gujarat Ambuja Cements (up 3.82% to Rs 122.45), and Ranbaxy laboratories (up 3.41% to Rs 384) were the other gainers.
Index heavyweight Reliance Industries (RIL) advanced 3.97% to Rs 1622.10, as 8.62 lakh shares changed hands in the counter on BSE. It had surged to a high of Rs 1627.80, while its low was at Rs 1575. RIL will pay over $600 million for hiring deep-sea drilling rigs for developing the gas fields in the prolific KG-D6 block off the east coast. It has hired US firm Tranocean's Deepwater Frontier rig at a day rate of $3,20,000 for two years, beginning August 2006. Deepwater Frontier is currently drilling in Bay of Bengal, reports said. Crude oil production will begin in the first quarter of 2008 calender year, earlier than the gas project. Oil output will range between 30,000 and 50,000 barrels per day, sources said.
KG-D6, the world's second largest deepwater find last decade, is being brought to production in less than six years of discovery at a cost of $2.8 per barrel of oil equivalent (boe), they said.
Once the fields comes on production, almost all of the country's natural gas deficit will be wiped out.
Maruti Udyog (MUL) rose nearly 1.52% to Rs 815.30, after reporting 17% growth in car sales in April as it sold 48,652 vehicles compared to 41,574 vehicles sold in the same period last year. Over all, the company sold 50,352 vehicles in domestic and international markets in April, compared to 43,127 in April 2006.
HDFC Bank lost 2.35% to Rs 1002, and was the top-loser.
FMCG major Hindustan Lever (HLL) declined 1.71% to Rs 196, on a volume of 10.80 lakh shares while telecom services provider, Reliance Communications, slipped 1.38% to Rs 470.50 on a volume of 23.51 lakh shares.
Tata Motors slipped 2.26% to Rs 733.50, after surging to a high of Rs 764.50, on reporting total sales of 40,486 vehicles (including exports) for April, a growth of 10.7% over 36,574 vehicles sold in April 2006. The company sold 19,607 commercial vehicle (CV) units in the domestic market during April, when compared with 19,674 vehicles in the same month last year.
The sales of medium and heavy commercial vehicle products stood at 10,392 units, a decline of 14% over April 2006. Sales of light commercial vehicles grew by 22% at 9,215 units over April 2006.
Tata Motors' passenger vehicles business reported total sales of 16,842 vehicles in the domestic market in April 2007, an increase of 26% over April 2006. The company sold 4,037 units in the export market in April 2007, compared to 3,572 vehicles in April last year, an increase of 13% driven mainly by commercial vehicles.
The Hang Seng Index was up 1.39%, while the Nikkei 225 Index rose 0.69%.
FIIs turned sellers in the last two trading sessions after the heavy inflows of the last few days. FIIs sold shares worth a net Rs 195 crore on Friday (27 April), the day when the Sensex had plunged 320 points. Their inflow has been robust this month. As per a provisional data, FIIs were net sellers to the tune of Rs 440.51 crore on Monday. Domestic institutional investors were net buyers to the tune of Rs 200.65 crore on Monday. The market was closed on Tuesday (1 May) and Wednesday (2 May) on account of public holidays.
The outcome of the ongoing seven-phased Uttar Pradesh assembly elections, is a key political event to watch out for. The assembly poll gets over early this month. The vote is seen as a barometer of national political trends. Some opinion polls show the opposition Bharatiya Janata Party (BJP) emerging second in the race, further adding to the woes of the ruling Congress, which is already battling rising prices.
US stocks rallied on Wednesday, as robust profits and a flurry of buyout offers powered the Dow Jones industrials to a record-high and the S&P 500 to its highest level in over six years. Shares of manufacturing companies that sell their products abroad, such as appliance maker Whirlpool Corp and lawn mower maker Toro Co., posted sharp gains after government data showed bigger-than-expected increases in US factory orders. The Dow Jones industrial average was up 75.74 points, or 0.58%, at 13,211.88. The Standard & Poor's 500 Index was up 9.62 points, or 0.65%, at 1,495.92. The Nasdaq Composite Index was up 26.31 points, or 1.04%, at 2,557.84.
Oil prices clawed back up on Thursday, after US government data showed a build up in crude but a further fall in gasoline stocks ahead of peak summer demand. US crude rose 4 cents to $63.72, after a 72-cent drop a day earlier. London Brent crude gained 18 cents to $66.43 a barrel in the Asian session, after dropping 75 cents on Wednesday.
US crude oil inventories rose by 1.1 million barrels last week in government data on Wednesday, slightly above analyst forecasts, due in part to continued low demand from refiners amid a string of breakdowns.
The market may take a break from its last 2-session losses and rise in tune with firm international markets trend. However, worries about FIIs remaining net sellers of equities in the domestic market could force the players to remain on the sidelines. The Nifty on the upside will face resistance at 4100 and in the short run it has a strong support at 4040. The Sensex has a likely support at 13700 and may face resistance at 14300. In the result front, Century Enka, Century Textiles, Colgate, HDFC, IFCI, Orchid Chemicals, Sterlite, United Phosphorus and Varun Shipping are expected to announce their numbers.
Among the US indices the Dow Jones industrial average hit another record high Wednesday as investors welcomed strong earnings, lower oil prices, media merger news and a strong reading on manufacturing. The Dow Jones advanced by 76 points at 13212, the Nasdaq added 26 points to close at 2558.
Most of the Indian floats trading on the US bourses gained marginally. HDFC Bank, ICICI Bank and Satyam Computer gained over 2% while Patni Computers, Dr Reddy's, MTNL and VSNL gained over 1% each. However, Tata Motors closed with the marginal losses.
Crude oil prices slipped further. The Nymex light crude oil for June delivery fell 72 cents to close at $63.68 a barrel, off its intra-day high of $65.50 per barrel. In the commodity space, the Comex gold for June series slipped by $2.20 to settle at $675.10 a troy ounce.
NIFTY (4087) S 4053 R 4121
BUY GESHIP (247)
SL 242 T 257, 260
BUY RALLIS (328)
SL 324 T 338, 341
BUY BRFL (188)
SL 184 T 197, 200
SELL APIL (474)
@ 478 S 482 T 465, 462
@175 S 178 T 164, 161
Opportunities to get in and get out!
Never read a book through merely because you have begun it.
Just because you've got into a stock doesn't mean you have to stick to it. The coming days will give you ample opportunities to get into counters and exit counters as the markets are expected to witness bouts of buying and selling in select counters. A crash on Friday followed by a volatile and mixed day on Monday. Then came the two holidays. Thankfully nothing untoward has happened in the international markets in the interim. Locally too, there's hardly anything to bother about except for the last few results that are still trickling in. Going by the global cues, we may open higher. But, considering that we will head into the weekend after two days of trading, the market may remain rangebound and choppy. FIIs have also turned net sellers in the last couple of days. We expect more stock specific action amid lower volume given the fact that there are hardly any triggers in the immediate future. Inflation will of course continue to hog the limelight and as will the rupee. There is a newspaper report that says that volatility is all set to rise this year and it may not be such a smooth ride for the bulls after a four-year rally. So, it pays to be a little cautious after a big rally as most positive factors are in the stock prices. But then for the day, no major worries in sight.
FIIs were net sellers of Rs4.4bn (provisional) in the cash segment on Monday while the local institutions put in Rs2bn on the same day. In the F&O segment, FIIs offloaded stocks worth Rs8.35bn on Monday. Foreign funds were net sellers to the tune of Rs1.95bn on April 27.
In global fund flows, money returned to US Equity Funds during the fourth week of April as the benchmark Dow Jones posted a series of new record highs on the back of a better than expected first quarter earnings season, according to EPFR Global Fund Data Monitor. But uncertainty about China’s response to higher than expected economic growth may have dampened flows into emerging markets funds. And, after three weeks of solid gains, investors pulled significant amounts of money out of Western European Equity Funds.
Wockhardt could be in action amid reports that it will acquire French pharma company Negma Lerads SAS. Moser Baer has recommended 1:2 bonus share issue and plans to raise as much as $150mn for expansion.
Saregama India is to announce its results today. Market grapevine has it that the RPG Group media major is expected to report bumper profit. Nearly 10% equity of Reliance Petroleum held by institutions like LIC, SBI and Goldman Sachs will come out of the lock-in period.
Hero Honda's April sales rose 4.86% to 262,544 units. Bajaj Auto's sales last month declined 10%. TVS Motor could be under pressure as it has reported a 16% drop in sales in April because demand for motorcycles declined. Tata Motors has posted a 10.7% rise in its April sales.
Suzlon Energy may attract some attention as one of its units has won a 400 MW wind turbine contract from US-based PPM Energy.
The Dow Jones Industrial Average hit another record high on Wednesday, clocking its longest winning streak in almost 52 years as investors welcomed strong earnings, lower oil prices, media deals and a strong reading on manufacturing.
The Standard & Poor's 500 Index climbed to a six-year high, propelled by MasterCard and Time Warner earnings that topped analysts' forecasts. The S&P 500 added 9.62 points, or 0.7%, to 1495.92, the highest since September 2000.
The Dow gained 75.74 points, or 0.6%, to a record 13,211.88 as a stronger-than-expected factory orders report lifted Honeywell International Inc. shares. The average recorded its 18th record close this year. The Nasdaq Composite climbed 26.31 points, or 1%, to 2557.84, the highest since February 2001.
Treasury prices slipped, lifting the yield on the 10-year note to about 4.64% from around 4.63% late on Tuesday. COMEX gold for June delivery fell $2.20 to settle at $675.10 an ounce. In currency trading, the dollar eased against the euro and gained versus the yen.
US light crude oil for June delivery fell 72 cents to settle at $63.68 a barrel on the New York Mercantile Exchange, after the government said that supplies of gasoline fell and crude oil inventories climbed. The front-month contract was quoting 6 cents higher at $63.74 a barrel in extended trading in Asia.
European shares rose on Wednesday, led by media stocks after BSkyB reported surprisingly strong customer addition and News Corp offered to buy Dow Jones for $5bn. The pan-European Dow Jones Stoxx 600 index rose 0.4% to 388.52. The UK's FTSE 100 closed up 1% at 6,484.50, the German DAX Xetra 30 rose 0.6% to 7,455.93 and the French CAC-40 climbed 0.5% to 5,990.13.
In Asian markets, the Hang Seng in Hong Kong surged by 226 points to 20,614 while the Kospi in Seoul added 5 points to 1558 and the Straits Times in Singapore climbed 31 points to 3449. Markets in Japan and China are shut for public holidays.
In the emerging markets, the Bovespa in Brazil gained 1% to 49,471 while the IPC index in Mexico rose 0.9% to 29,259 and the RTS index in Russia slumped 1.2% to 1911.
Market may remain dull and choppy
Key Indices closed flat recouping most of the early morning’s fall as buying in late afternoon trades in lifted the markets higher from day’s low. Impressive numbers by R Com and value buying I Tech stocks led the recovery as BSE 30-share Sensex settled at 13872, down by 36 points after touching an intra-day low of 13693.59 and a peak of 13901.12. Though, the Indian Bulls managed to fight back from day’s low, picture was grim in other major Asian Indices. Asian stocks fell to a one-week low amid concern about economic growth in the US and China. Hang Seng Index lost over 200 points to close at 20319.
Infosys, TCS, R Com and Tisco were the major gainers lifting the markets higher from days low. IT, Metal, Auto and capital Good stocks were among the major gainers. While Banking and FMCG stocks closed lower on account of profit booking.
Among the major results announced today, R Com advanced by over 3.5% to close at Rs477 after company’s Q4 profit doubled to Rs10.24bn. However, HLL closed lower by 5% to Rs199 after company’s net income fell by 13% to Rs3.93bn.
Tech stocks held the markets from a major fall after Rupee declined by the most in more than a month today. Satyam Comp is up by over 1% to Rs473, Wipro has gained by 1% to Rs572 and Infosys advanced by 2.28% to Rs2051.
Selling pressure was seen in banking stocks led by ICICI Bank. The scrip lost over 7% to Rs866 on plan for plan for India's biggest stock sale. SBI closed flat at Rs1102, Can Bank lost 2% to Rs217 and Bank of Baroda was down by 3% to Rs236.
Praj Industries Ltd: Berjis Desai, Non-Executive and Independent Director on 23rd April 2007 sold 100000 equity shares and Sivaramakrishnan Iyer, Non-Executive and Independent Director on 25th April 2007 sold 50000 equity shares of Praj Industries.
Indiabulls Real Estate Limited: Goldman Sachs Investments (Mauritius) I Limited on 23rd April 2007 from market purchased 715000 equity shares of Indiabulls Real Estate.
The turnover on NSE was down by 7.9% to Rs75.71bn. BSE IT index was the major gainer and gained 2.01%. BSE Auto index (up 1.10%), BSE Mid Cap index (up 1.08%) and BSE Capital Good index (up 0.57%) were among the other major gainers. However, BSE Bank index lost 2.88%.
IFCI, TTML, SAIL, HLL, IDFC, Idea, RNRL, ICICI Bank, Bharti Airtel, Cipla, Vijaya Bank, Tata Steel, ITC, HFCL, IBREAL, RPL, IVRCL Infra, Hindalco, Arvind Mills, FSL and UCO Bank.
DCHL, Pratibha Industries, Silverline Tech, Sona Koyo, HOV Services, Genus Overseas and Maxwell Industries.
Century Textiles, Colgate, Coromandel Fertilizers, DCB, Eicher Motors, GTL Infra, HDFC, IFCI, Info Edge India, Orchid Chem, Sterlite and United Phosphorous.
Alstom Projects India, Bharat Forge, Castrol India, Century Textiles, Colgate, Reliance Capital, SCI, Tata Power, TVS Motor and UTI Bank.
Ranbaxy, BPCL, Bank of Baroda, ONGC, HPCL, SAIL, Arvind Mills, MTNL, Voltas, Balrampur Chini and VSNL.
Stock Futures with Largest Increases in OI:
Bharat Forge, J&K Bank, ICICI Bank, Chennai Petro, HLL, Tata Motors, Polaris, SCI and Kotak Mahindra Bank.
Stock Futures with Largest Decreases in OI:
OBC, TCS, Mphasis BFL, Renuka Sugars, Sesa Goa, NTPC, Alok Industries, Ranbaxy, Gateway Distriparks.
HLL Q1 sales at Rs31.84bn (up 13.97%), net income falls to Rs3.93bn (down 11.3%)
Reliance Com Q4 net (up 10.7%) to Rs10.23bn and revenue (up 4.8%) to Rs39.37bn QoQ
JSW Steel Q4 profit at Rs4.13bn (up 0.4%), sales (up 31%) to Rs25.79bn
Alstom Projects Q4 profit at Rs362mn (up 75.7%), revenue at Rs4.32bn (up 66.7%) and to pay Rs10 per share as dividend
BEL Q4 profit at Rs3.57bn (up 27%), revenue at Rs17.9bn (up 12.5%)
Castrol India Q1 net profit at Rs415.2mn (up 29%), net sales at Rs4.42bn (up 18%)
Vijaya Bank Q4 profit at Rs636.5mn against loss of Rs345.3mn and revenue at Rs8.88bn (up 32.7%)
Idea Cellular – Outperform from Macquarie with target of Rs130.
Long Term investment:
Major News Headlines:
Gateway Distriparks announces 1:4 bonus issue
Silverline Tech to buy BPO Business in North America
Bharti Shipyard gets $64.8mn offshore Vessel Contract
Ashok Leyland to buy Detroit Company for $17mn
JSW Steel acquires 3 coalmines in Africa to secure supplies
TCS unit FNS gets multi million Dollar Order
Market Grape Wine :
In House :
Nifty at a support of 4059 & 4025 and resistance at 4130 and 4185 levels .
Buy : Jet above 726 target 740 s/l 717
Buy : RelCap above 718 target of 735 s/l of 709.5
Buy : BEL positional s/l of 1670 above 1718 target 1925
Buy : in F&O ArvindMill above 45.5 target of 48 s/l of 44
Out House :
Markets at a support of 138818 & 13717 levels with resistance at 14041 & 14194 levels .
Buy : RIL & RelCap
Buy : TataTea
Buy : PFC & ICRA & FSL
Buy : Praj & GlenMark
Buy : TELCO & M&M
Buy : JSW & Tisco
Buy : SesaGoa & ABAN
Dark Horse : Praj , Tisco , SKumar , JSW , Bata , Unitech , IFCI , Sail & ACC
Stock-specific buying is likely to continue in the near-term, as the Q4 earnings season is in full swing. Even as Sensex had lost 36 points on Monday (30 April), the broader market was a picture of strength as select side-counters were in demand, either due to their strong Q4 results or on expectations of good earnings. The major Q4 result today is that of housing finance major HDFC.
The Union Budget 2007-08 is due to be passed by the Parliament today and the market will keep an eye open for any rollback measures from Budget Day (28 February 2007). The market will keep a close vigil on whether the finance minister rolls back the export duty on iron ore exports, which has hit shipments to China, and any changes to bring employee stock options plans (Esops) under the fringe benefit tax (FBT). However, as per one report no major changes are likely with respect to FBT on Esops.
FIIs turned sellers over the past two trading sessions after their heavy inflows over the past few days. FIIs sold shares worth a net Rs 195 crore on Friday (27 April), the day when the Sensex had plunged 320 points. Their inflow has been robust this month. As per provisional data, FIIs were net sellers to the tune of Rs 440.51 crore on Monday. Domestic institutional investors were net buyers to the tune of Rs 200.65 crore on Monday. The market was closed on Tuesday (1 May) and Wednesday (2 May) on acctoun of public holidays.
The outcome of the ongoing seven-phased Uttar Pradesh assembly elections, is a key political event to watch out for. The assembly poll gets over in early this month and the vote is seen as a barometer of national political trends. Some opinion polls show the opposition Bharatiya Janata Party (BJP) emerging second in the race, further adding to the woes of the ruling Congress, which is already battling rising prices.
Global markets remain firm. Asian markets edged higher on Thursday (3 May) after US stocks hit fresh record high on Wednesday. Key benchmark indices in Hong Kong, Japan, South Korea, Singapore and China were up by between 0.28% to 2%.
US stocks rallied on Wednesday, as robust profits and a flurry of buyout offers powered the Dow Jones industrials to a record high and the S&P 500 to its highest level in over six years. Shares of manufacturing companies that sell their products abroad, such as appliance maker Whirlpool Corp. and lawn mower maker Toro Co., posted sharp gains after government data showed bigger-than-expected increases in US factory orders. The Dow Jones industrial average was up 75.74 points, or 0.58 percent, at 13,211.88. The Standard & Poor's 500 Index was up 9.62 points, or 0.65 percent, at 1,495.92. The Nasdaq Composite Index was up 26.31 points, or 1.04 percent, at 2,557.84.
Deal making news, good economic data and a carryover of momentum took the US market to unchartered territory once again today. US stocks once again rallied on Wednesday and set a new milestone with the Dow crossing and settling above the 13,200 mark for the first ever time. For the 17th time this year the Dow closed in record territory. S&P 500 struck a new six and half year high record and is just 5 points away from touching the 1500 mark.
25 out of 30 Dow stocks closed higher for the day. For the day (2May, Wednesday) the Dow Jones Industrial Average closed higher by 75.74 points at 13211.88, Nasdaq higher by 26.31 points at 2557.84 and S&P 500 higher by 9.62 points at 1495.92. American Express, Du-Pont, GM and Verizon were the main Dow winners while IBM, Johnson & Johnson and P&G were the main Dow losers.
Yesterday’s news about Rupert Murdoch’s bid for Dow Jones was followed today by another deal news in media sector. Cablevision Systems has agreed to be taken private by the founding Dolan family in a deal worth $10.5 billion. Cablevision stock closed up by almost 10%.
Factory orders rise 3.1% (expected 2.2%) in March; Yum Brands and Chipotle deliver yummy results
Stocks rallied straight out of gate as a carryover of yesterday’s momentum. The indices were extending their reach to the upside as all 10 economic sectors remained positive and Consumer Discretionary was pacing the way, getting a big lift from Restaurants after Yum! Brands beat analysts' expectations and raised its 2007 earnings outlook last night. Chipotle Mexican Grill also posted good earnings report.
Then came some good economic data. News that factory orders rose 3.1% in March, ahead of the 2.2% expected by Wall Street economists, reassured investors about economic growth. At the same time, the market overcame a pre-opening report from ADP, which said private-sector jobs rose by only 64,000 in April, the weakest monthly growth in four years.
Technology was another influential leader to the upside. Cisco Systems surged 3% after Goldman Sachs urged investors to buy the stock ahead of its Q3 earnings report next Tuesday. Financials was also in focus after Dow component American Express climbed noticeably up after competitor MasterCard posted a blowout earnings report.
Crude prices slumps on second consecutive buildup in crude inventory
Crude-oil futures for light sweet crude for June delivery closed at $63.68/barrel (lower by $0.72/barrel or 1.12%) on the New York Mercantile Exchange. Crude prices fell today on U.S. government weekly report that refiners increased gasoline output and there was a second weekly rise in crude inventories. As per today’s inventory report, the Energy Department said that crude supplies rose 1.1 million barrels for the week ended 27 April. After a two-week climb of 3.2 million barrels, total inventories stood at 335.6 million last week.
In the broad market for equities, trading volumes showed 1.6 billion shares exchanging hands on the New York Stock Exchange and 2.1 billion on the Nasdaq stock market. Advancing issues topped decliners by 3 to 1 on the NYSE and by 20 to 9 on the Nasdaq.
The economic reports expected for tomorrow are Q1 Productivity and an update on Initial Claims followed by ISM Services data. Also, tomorrow brings another large batch of quarterly results, among which GM is one major name.
Merrill Lynch - ICICI Bank, Glaxo, Cadila, Reliance Energy, Pantaloon Retail, ABB, India Market Strategy, Educomp, Bharti Airtel, Patni Computers
Merrill Lynch - ICICI Bank
Merrill Lynch - Educomp Solutions
Merrill Lynch - Reliance Industries - Apr 30