AMERICAN MARKETS OUTLOOK: U.S. stock markets are set to open higher Monday on expectations of continued positive news in this week's first-quarter company earnings reports.
"Large gains on markets last week may lead to record highs this week as strong corporate earnings are expected," says Anthony Hill, analyst at FSW Europe. "More likely, though, is the markets will pause for thought following such large gains as rate worries may begin to creep back, though signs of inflationary pressures are lower than expected, considering the high value of oil."
American Express, Caterpillar and Xerox report earnings Monday.
FSW Europe is calling the Dow Jones Industrial Average to open up 10 points at 11,357, the S&P up 5 points at 1784 and the Nasdaq up 3 points at 2345.
EUROPEAN MARKETS: European stocks are declining Monday as investors react to a weaker dollar, with automaker and technology shares under pressure.
In London, the FTSE 100 index is down 0.1% at 6126.60, but is steadier compared with the rest of Europe, as commodity stocks help resist dollar-related declines. The morning release of stronger-than-expected U.K. sales growth data confirms little prospect of a near-term rate change, said an ING economist.
In Frankfurt, the DAX 30 index is down 0.3% at 6079.76 in a technical correction, exacerbated by the higher oil price. In Paris, the CAC 40 index is down 0.5% at 5226.24.
Gilts have underperformed bunds on the higher-than-expected March U.K. retail sales figures, rising 0.7% on the month and 2.3% on the year. Bunds are down following the release of German February industrial production data, which showed a large increase from the previous month. The June bund future is up 0.07 at 115.77, while the June gilt future is down 0.20 at 110.25.
On the currency market, the dollar is down across the board midday as its attraction is reduced by the weekend's G-7 communique mention of China, the latest developments on reserve diversification and the continued strength of oil prices. The dollar slipped back to Y115.28 against the yen on selling by overseas hedge funds, said traders. The euro is up at $1.2375 and the pound rose to $1.7900.
TOLL-ROAD GIANT ABERTIS TO BUY AUTOSTRADE: Spanish highway and infrastructure company Abertis Infraestructuras SA agreed to acquire Italian peer Autostrade SpA in a cash-and-stock transaction valued at about EUR14 billion, or roughly $17 billion, creating a global leader in toll roads. (By Alessandra Galloni of WSJ)
GERMAN INDUSTRIAL OUTPUT REBOUNDS IN FEBRUARY: Germany's industrial activity geared up sharply in February, easily overcoming a lapse in the previous month. (Data Snap by Emily Barrett)
BLACKSTONE PAYS EUR2.68B FOR DEUTSCHE TEL STK: Private equity firm Blackstone Group (BGP.XX) said it has agreed to buy 4.5% of Deutsche Telekom AG (DT) for EUR2.68 billion, becoming a major shareholder in Germany's largest telephone operator. (News Snap by Taska Manzaroli)
NOVARTIS 1Q NET UP 32%; KEEPS 2006 OUTLOOK: Novartis AG (NVS) said first quarter net profit rose 32% - more than expected - helped by lower marketing and sales costs as well as lower research and development expenses, while overall sales advanced 13%. (News Snap by Stefanie Weitz)
INSIGHT & ANALYSIS FROM DOW JONES NEWSWIRES:
=FOREX FOCUS: The sharp dive in some commodity prices late last week dragged most commodity currencies down too. (By Nicholas Hastings)
=THE SKEPTIC: Sometimes a politician's first move is his most important, setting the tone for an entire term. That's why Italy's new Prime Minister Romano Prodi should think twice before turning up the protectionist rhetoric against the proposed Italo-Spanish wedding of Autostrade and Abertis. (By Erik T. Burns)
=THE SKEPTIC: The rising oil price may not be the sole reason the Japanese stock market plunged 2.8% Monday, but it's a big part of the problem. (By Howard Wheeldon)
STILL TO COME
1030/1430 US April Dallas Fed Mfg Production Index
1230/1630 EU ECB Member Gonzalez-Paramo speaks
at Global Financial Imbalance
Conference in New York
1730/2130 EU ECB Pres Trichet speaks at Council
On Foreign Relations conference in
JPN March Corp Svc Price Index
U.K. retail sales performed well ahead of expectations in March, but nevertheless failed to rescue a lackluster first quarter. (Data Snap by Emily Barrett)
Freight forwarder Kuehne & Nagel International AG (KNIN.EB), the world's biggest seafreight operator, reported a 46% rise in first-quarter net profit due to strong demand and the impact of a large acquisition in France. (News Snap by Martin Gelnar)
Microsoft Corp.'s (MSFT) antitrust case has broad implications for the way it and other software companies do business, said the company's chief lawyer Brad Smith. Smith was speaking when arriving at court at the start of a hearing on the software giant's European antitrust punishment.
The U.K.'s public sector borrowed GBP37.8 billion in the financial year ended March, slightly above its upwardly revised target. (Data Snap by Paul Hannon)
Lafarge SA (12053.FR) again raised its offer for outstanding shares in its North American subsidiary to $85.50-a-share and said a special committee of Lafarge North America's (LAF) board has recommended the new offer. (News Snap by Greg Keller)
Bankinter SA (BKT.MC) said first-quarter net profit rose 34%, boosted by strong fee income and a gain from the sale of a stake in paper company Grupo Empresarial ENCE SA (ENC.MC). (News Snap by Jonathan House and Christopher Bjork)
U.K. music and book retailer HMV Group PLC (HMV.LN) said it received an indicative GBP280 million offer for its book unit Waterstone's from a consortium that includes the unit's founder Tim Waterstone. (News Snap by Lilly Vitorovich)
U.K. food company RHM PLC (RHM.LN) said that its full-year results would be in line with earlier guidance after an improved performance in the second half of the year. (News Snap by Michael Carolan)
Promotora de Informaciones SA (PRS.MC), Spain's largest media company, posted a 5.6% increase in first-quarter net profit, backed by a 16% jump in advertising revenue. (News Snap by Santiago Perez)
French commercial broadcaster M6 Metropole Television SA (5322.FR) said revenue rose nearly 16% in the first quarter of 2006 as rising sales at its digital channels and audiovisual rights businesses offset flat advertising revenue. (News Snap by Greg Keller)
Swedish aerospace and defense company Saab AB (SAAB-B.SK) said net profit rose 90% in the first quarter, underpinned by several large orders and a SEK170 million capital gain from the sale of Saab Metech. (News Snap by Malin Rising)
French business sentiment continued to improve in April, climbing to a new five-year high, amid robust domestic demand and orders from abroad, according to a survey released by government statistics institute Insee. (Data Snap by David Gauthier-Villars)
Mortgage lending in the U.K. surged to its highest level since June 2004 as consumers' confidence to take on more secured debt returned in earnest in March, said the British Bankers Association. (Data Snap by Ilona Billington)
Spain's Banco Popular Espanol SA (POP.MC) said net profit rose 15% in the first quarter, buoyed by further lending growth and higher commission income. (News Snap by Christopher Bjork)
Autonomy Corp. (AUTN), the U.K. information retrieval software developer, reported its strongest ever set of first-quarter results after recently acquired rival Verity helped drive new contract sales to record levels. (News Snap by Nic Fildes)
Danish pharmaceutical ALK-Abello A/S (ALK-B.KO) said its net profit for continuing operations swung into the black in the second-quarter as sales climbed 33%. (News Snap by Frances Schwartzkopff)