Could The French Vote Affect Multinationals’ Profits?
Stocks took a breather after last week’s gains.
Consumer confidence for May was 102.2, better than expected. In April,
consumer confidence was 97.5. Chicago PMI was 54.1 in May, worse than expected
and a 2-year low, and compares with a 65.6 figure for April.
The dollar has risen 5% against the euro after French voters turned
down the European Constitution, prompting traders to wonder about the impact on
multinational corporations’ earnings. Ten year notes closed under 4%, at 3.996%.
The Supreme Court overturned Arthur Anderson’s conviction of
destroying Enron-related documents, citing flawed jury instructions.
Alcoa
(
AA |
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PowerRating) is lower after the company said it received a subpoena
related to an aluminum fluoride industry investigation.
United Natural Foods
(
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PowerRating) beat by a penny. Profit rose 24%.
Genentech
(
DNA |
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PowerRating) said trials show Lucentis, along with Visudyne,
maintained or improved vision in about 90% of patients with wet AMD.
Piper Jaffray upped its target price on Google to $300. Many traders
expect the stock will be added to the S&P 500 after August.
The Business Roundtable May CEO Economic Outlook Survey indicates that
85% of CEOs expect sales to continue to increase and 70% expect to add jobs or
maintain the current levels of employment in 2005.
Mechanics for United Airlines approved a new labor pact with a lower wage
scale. UAL hopes to dig itself out of bankruptcy. In related sector news, Merrill Lynch raised Northwest Airlines
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to a ‘buy.’
For the month of May, the S&P has gained 3.6%, the Sox 11.6% and the Nasdaq,
7.7%. Gold fell 4.3% in May. On the earnings front, for the month, 67% of S&P
500 companies exceeded expectations; 13% matched and 20% missed expectations.
Ebay added 20% in May, Intel 16%, Dell 15% and Cisco, 13%.
Strong sectors were:Â Â Airlines
(
$XAL.X |
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+1.15%Â Â Â Brokers
(
$XBD.X |
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PowerRating) +0.78%Â Â Â Â
Software
(
$GSO.X |
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PowerRating) +0.29%Â Â
Weak sectors were:Â Â Â Â Oil
(
$XOI.X |
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PowerRating) -1.14%Â Â Â
Computer Technology
(
$XCI.X |
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PowerRating) -1.13%Â Â Computer Hardware Â
(
$HWI.X |
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PowerRating)
-1.20%
| Dow | -73.60 | 10,469.03 |
| Nasdaq | -7.34 | 2068.39 |
| S&P 500 | -7.18 | 1191.60 |
The dollar was +1.05 at
87.47
Crude Oil was +0.12 at
51.97
Gold was -2.00 at 415.30
1.63 billion on the Nasdaq.
Market breadth was mixed.
| NYSE | Issues | |
| Advancing | 1695 | Up Vol 610 |
| Declining | 1586 | Down Vol 867 |
| 1.06 | 1.42 | |
| Nasdaq |
||
| Advancing | 1533 | Up Vol 612 |
| Declining | 1527 | Down Vol 813 |
| 1.00 | 1.32 |
Stocks in the News
Citigroup raised its rating on ExxonMobil
(
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PowerRating) and
ChevronTexaco
(
CVX |
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PowerRating). JP Morgan also raised its rating on XOM.
American Insurance Group
(
AIG |
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PowerRating) filed its annual report, restating
years 2000-2003 and adjusted 2004 net income by 11.9%.
Tibco
(
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PowerRating) is revising its Q2Â forecast lower.
Novellus
(
NVLS |
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PowerRating) raised Q2 guidance.
Ameritrade confirmed it is in merger talks with TD Waterhouse.
Dreamworks
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PowerRating) is making new lows after the release of
“Madagascar,” which has been panned by some.
Brice Wightman
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