AMERICAN MARKETS OUTLOOK: U.S. stock markets are called to open flat Monday, according to Angus Campbell at Finspreads. As the U.S. earnings season gets underway with Alcoa reporting, he says, "investors will want to see whether the Fed's interest rate policy is having any effect on U.S. corporations' earnings." He adds, "if there is any hint of this and data continues to show a healthy economic backdrop then concerns over further rate hikes may grip the market over the coming weeks."
Finspreads is calling the Dow Jones Industrial Average to open flat at 11,120, the S+P 500 down 0.5 points at 1295 and the Nasdaq 100 down 1 point at 1722.
EUROPEAN MARKETS: European shares are mixed midday as auto sector gains couldn't ignite enthusiasm damped by a lackluster end to U.S. trading last week ahead of earnings season.
London's FTSE 100 was up 0.28% at 6042.90 after oil companies including BP and Royal Dutch Shell gained ground as crude oil prices strengthened. Catering giant Compass Group jumped 3.5% to 237.5p after it said over the weekend that it will sell its travel concession catering business for GBP1.8 billion in cash to a consortium of investors led by Macquarie Bank and private-equity group EQT.
Frankfurt's DAX was up 0.09% at 5958.06, "stabilizing in positive territory amid very thin trade," a trader said. He said significant advances are unlikely Monday in the light of trading volumes and lack of news, but added the market hopes for new impulses from Wall Street's open. DaimlerChrysler was up 1.83% at EUR47.75 after March unit sales showed sales momentum is still high. The French CAC 40 was down 0.275 at 5161.10.
Bunds and gilts are expected to stay in well-defined ranges Monday given a lack of significant economic data. Italian election results are the "wild card," says a broker. While full results won't be known until after the markets close, exit polls will be released shortly after 1300 GMT, so there's a potential for movement. Romano Prodi's center-left coalition was expected to win going into the general election, which has seen a good voter turnout. June bund is down 0.10 at 116.06, June gilt is down 0.19 at 111.31.
The dollar is mostly lower on profit-taking at midday, losing some of the gains posted after Friday's stronger-than-expected U.S. payrolls data. The euro has risen to $1.2112 from $1.2095 late Friday in New York, according to EBS. Against the yen, the dollar had a slightly better time, pushing ahead marginally to Y118.46 from Y118.28. The pound has risen to $1.7461 from $1.7438.
COMPASS SELLS SSP BUSINESS FOR GBP1.8BN: Compass Group PLC (CPG.LN) said it would return GBP500 million to shareholders after it sold its Select Service Partner unit to investors led by Macquarie Bank (MBL.AU) and EQT Partners for GBP1.8 billion in cash. (News Snap by Michael Carolan)
CHIRAC PLANS TO REPLACE CONTESTED JOBS LAW: President Jacques Chirac announced plans Monday to replace an employment law that triggered massive protests, bowing to intense pressure from students and unions and dealing a blow to his loyal premier in a bid to pull France out of crisis.(AP)
INSIGHT & ANALYSIS FROM DOW JONES NEWSWIRES:
=FOREX FOCUS: European Central Bank President Jean-Claude Trichet succeeded last week in erasing market expectations for a rate hike next month, but he hasn't failed to shift forecasts for a continued narrowing of U.S. and euro-zone rate differentials that will keep the euro on the rise. (By Nicholas Hastings)
=CHARTING EUROPE: According to U.K. newspaper The Sunday Times, BAE Systems' (BA.LN) shareholders may receive a special dividend following the expected sale of its 20% stake in Airbus (ABI.YY). Some investors however bet the defence company will look for acquisitions, particularly in the U.S. (By Trading Central)
STILL TO COME
0815/1215 US Fed Gov Olson speaks on
"enterprise-wide compliance risk
0845/1245 US Fed Gov Bies speaks in Naples, Florida.
0915/1515 US Treasury Assistant Secretary Warshawsky holds monthly
N/A JPN BOJ Policy Board meeting starts.
N/A JPN UNICEF Executive Director Veneman to
meet Foreign Affairs Minister Aso, other
senior officials in Japan.
Swiss drugmaker Novartis AG (NVS) said it has submitted four applications for wider use of cancer drug Gleevec, which are based on a new approach to cancer research that looks at the way that cancer is expressed, rather than its site. (News Snap by Anita Greil)
Dutch postal and express company TNT NV (00906.AE) said it plans to cut between 1,000 to 1,100 jobs in the next three years at the mail unit amid increased competition ahead of a fully liberalized European postal market. (News Snap by Fred Pals)
French industrial production fell across the board in February, led by a decline in the auto sector, the Insee national statistics office said. (Data Snap by David Gauthier-Villars)
The annual increase in U.K. factory gate prices slowed in March compared with the previous month, mainly on the back of higher scrap metal prices, National Statistics said. (Data Snap by Corey Boles)
Serono SA (SRA) said it's taking itself off the block, saying offers received for the Swiss biotech company didn't reflect its worth. (News Snap by Katharina Bart)
Telecommunications company Swisscom AG (SCM) Monday said a draft ruling from the Competition Commission recommends that the company pays a CHF489 million fine for misuse of mobile termination rates. (News Snap by Hans Schoemaker)
Swiss chocolate maker Barry Callebaut AG (BARN.EB) said first-half net profit rose 11%, driven by higher cocoa prices and positive exchange rates. (News Snap by Hans Schoemaker)