AMERICAN MARKETS OUTLOOK: U.S. stock markets are expected to open unchanged Thursday as the financial results reporting season draws to a close.
Aetna, Marriott, Tommy Hilfiger, Aon, Timberland and Pixar Animation are among companies set to post results Thursday, while economic data include initial claims, wholesale sales and the consumer price index.
"As the U.S. earnings wind up, investors would ideally like to see the final few big names beat forecasts," says Angus Campbell at Finspreads.
"Even though over 60% of US companies that have reported have beaten Wall Street forecasts, many of the bigger stocks such as Intel, Google, Apple and Alcoa have hit the headlines missing estimates," he adds.
Finspreads is calling the Dow Jones Industrial Average to open flat at 10,858, with the S&P 500 and the Nasdaq 100 also unchanged, at 1265.65 and 2266.98, respectively.
EUROPEAN MARKETS: European shares are mostly higher midday. In London, the FTSE 100 is up 1% at 5782.20 as U.K. gas explorer BG Group climbs 10.3% on strong fourth-quarter profit. Tesco, the U.K.'s biggest supermarket group, is leading the declines after revealing plans to enter the $600 billion U.S. grocery market. In Frankfurt, the DAX is up 0.8% at 5711.48 in thin trading, with Deutsche Telekom up 1.7% on interest from institutional investors.The Paris CAC-40 is up 0.6% at 4926.05.
Bunds are sharply lower after hawkish comments from European Central Bank board members Klaus Liebscher Wednesday and Nicholas Garganas and Otmar Issing Thursday, and ahead of the U.S. 30-year auction later Thursday. Gilts are holding in positive territory, with support from a weak Halifax house price survey and a widening U.K. trade gap. The March bund future is down 0.14 at 120.03, while the March gilt is up 0.07 at 113.57.
In the currency market, the dollar is mixed, with an absence of any major developments ensuring it has little momentum either way. The dollar is weaker against the yen at Y118.45. The euro is up at $1.1977 and the pound is down at $1.7396.
ECB: VIGILANCE REQUIRED ON PRICE STABILITY: The European Central Bank needs to be vigilant to keep expectations of inflation under wraps given upside risks to prices, the ECB reiterated in its February monthly bulletin. (By Monica Houston-Waesch)
BT (BT) 3Q BEATS EXPECTATIONS, BROADBAND SHINES: BT Group PLC, the U.K. telecommunication and IT services company, reported better-than-expected third-quarter results, bucking the negative trend in the European telecom sector.(News Snap by Nic Fildes)
UK 2005 TRADE DEFICIT HITS RECORD HIGH: The U.K.'s goods and services trade deficit hit its widest ever mark in 2005 at GBP47.6 billion, with the deficit in goods continuing its downward trend in December. (Data Snap by Corey Boles)
UNILEVER (UL, UN) '05 NET UP 37%, TO SELL FROZEN FOOD BUSINESS: Unilever PLC posted a 37% rise in full-year net earnings and said it had decided to sell off the majority of its European frozen food business. (News Snap By Michael Carolan)
INSIGHT & ANALYSIS FROM DOW JONES NEWSWIRES:
=FOREX FOCUS: The European Central Bank may become even more hawkish in weeks to come, but this isn't likely to give the euro any more help. (By Nicholas Hastings)
=FOCUS: Finance ministers from the Group of Eight leading economies will probably repeat calls for greater transparency in international energy markets when they meet Friday and Saturday, while expressing confidence in the global economy's ability to continue to grow in the face of high oil prices. (By Paul Hannon and Geoffrey Smith)
=THE SKEPTIC: Preliminary FY05 results can be confusing thanks to the impact of IFRS, but even so there's little doubt Rolls-Royce is doing well. (By Howard Wheeldon)
=CHARTING EUROPE: EUR/USD has reached an important support zone between $1.1950 and $1.1920, from where at least a minor bounce is to take place in the days to come. (By Axel Rudolph)
STILL TO COME
0700/1200 UK Feb Bank of England interest rate
0830/1330 US Feb 4 Jobless Claims
1000/1500 US Dec Wholesale Trade
1000/1500 US Jan 28 DJ-BTMU Business Barometer
1000/1500 US Pres Bush speaks on the war on terror
1030/1530 US Feb 3 US Energy Dept Natural Gas Stocks
1315/1815 US Chicago Fed Pres Moskow speaks on the
economy in Chicago
1630/2130 US Feb 4 Money Supply
N/A JPN BOJ Policy Board meeting
U.K. retail giant Tesco PLC (TSCO.LN) said Thursday it will enter the U.S. market with a new convenience store format in 2007. (News Snap By Sarah Spikes)
Renault SA (13190.FR) said its net profit rose 18.7% to EUR3.37 billion in 2005 from EUR2.84 billion a year earlier despite a highly competitive market in Europe where the company's sales fell 4% in a stable market. (News Snap By David Pearson)
U.K. house prices fell in January for the first time since May 2005, as the number of first-time buyers dropped to a 25-year low in 2005, lender Halifax said. (Data Snap By Ilona Billington)
BG Group PLC (BRG) posted a 96% increase in fourth-quarter net profit as it reaped the benefits of higher oil and natural gas prices and strong production. (News Snap By Benoit Faucon)
Dassault Systemes SA (DASTY) said that fourth-quarter earnings per share rose 29% thanks to strong sales in Europe of its product-design software and the inclusion of a recent acquisition. (News Snap By Brian Lagrotteria)
Rolls-Royce PLC (RR.LN) posted a 33% rise in full year net profit, driven by strong demand for new commercial aircraft engines and said it expects to see further profit growth in 2006. (News Snap By Rod Stone)
Pernod Ricard SA (12069.FR), the world's second largest drinks group, reported a 67% surge in revenue in the six months ended Dec. 31, due to its July acquisition of former rival Allied Domecq. (News Snap By Pierre Briancon)
Iberdrola SA (IBE.MC), Spain's second-largest electricity company, reported a 15.6% rise in net profit in 2005, driven by international operations and renewable energymargins. (News Snap By Andres Cala)
Syngenta AG (SYT) reported a 35% jump in full-year net profit and said it now targets double-digit earnings per share growth until 2008. (News Snap By Stefanie Weitz)
Euronext NV (24151.AE) and Deutsche Boerse AG (DB1.XE) have made pledges on their control over clearing services if they buy the London Stock Exchange PLC (LSE.LN). (News Snap By Nicole Lee)