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Hitt og þetta 25. apríl 2006

DJ EUROPEAN MORNING BRIEFING: Full Steam Ahead For Stocks

US SUMMARY: Stocks Slightly Lower; Treasurys Up

DJIA 11336.32 loss 11.13 dn 0.1%
NASDAQ 2333.38 loss 9.48 dn 0.4%
S&P 500 1308.11 loss 3.17 dn 0.2%
Dow Future 11387.00 loss 2.00 0.0%
NASDAQ Future 1720.50 loss 2.00 0.1%
S&P Future 1314.50 0.00 0.0%
10-Yr US Treasury: 4.99% down 0.03
(Futures values as of 0450 GMT)
Stocks declined slightly Monday as a weakening U.S. dollar and a mixed batch of earnings reports led cautious investors to cash in on last week's gains. Oil prices also fell sharply as energy traders took profits following crude futures' recent run-up. Treasurys rose in price on hopes the Fed will stop tightening.

STOCKS: Disappointment over lower profit at Xerox and a reduced 2007 forecast from TD Ameritrade Holding overshadowed strong results from Caterpillar. However, investors largely ignored the earnings news as they readied for Federal Reserve Chairman Ben Bernanke's congressional testimony and the gross domestic product reading Thursday.

A steep drop in crude futures gave investors some relief following oil's recent climb to a record $75 a barrel. The market's trends suggest oil prices will stabilize or retreat further in the coming weeks, said Rick Pendergraft, an equity trader for Schaeffer's Investment Research.

"Looking at some of the data, I can see oil moving sideways or maybe lower," said Pendergraft, who added that many oil-related stocks are overbought. "To me, it was everybody jumping on board at the same time. They didn't think $75 could be taken out."

Persistent worries about Iran's nuclear arms program nonetheless kept the market on edge. A barrel of light crude sank $1.84 to settle at $73.33 on the New York Mercantile Exchange.

Wall Street faced another session with no new government data to give traders clues about the economy's health, but this week brings critical readings of new home sales, jobless claims, labor costs and GDP growth.

Ed Peters, chief investment officer at PanAgora Asset Management, said many on Wall Street appeared to mistake last week's Fed comments as a signal it would soon stop raising rates. Peters said the central bank instead plans to keep hiking rates while looking for hints of softening economic growth, such as in Friday's first-quarter GDP report.

"Just about everything that has to do with the economy will be looked over carefully and reacted to," Peters said. "But right now good news is not good for the market. At the same time, bad news isn't good either."

Scott McNealy stepped down as chief executive officer of Sun Microsystems, and shares jumped 9% on the hopes the next CEO can restore profit.

BONDS: Led by longer-dated securities, U.S. Treasury prices settled broadly higher Monday, adding to small gains from Friday. If Bernanke strikes a dovish tone on Thursday, the market will get a lasting boost.

Data on durable goods orders for March comes on Wednesday. Economists surveyed by Dow Jones Newswires expect a 1.6% gain, down from the 2.7% advance seen in February. New home sales for March and the Fed's Beige Book anecdotal survey of economic activity also arrive Wednesday.

ASIAN SUMMARY: Stocks Edge Higher As Oil Eases Lower

USD-Yen 114.56 gain 0.02 up 0.02%
AUD-USD 0.7449 gain 0.0001 up 0.01%
Nikkei 225 16952.78 gain 38.38 up 0.2%
Hang Seng 16688.73 loss 169.40 dn 0.1%
Taiwan Index 7122.18 gain 26.14 up 0.4%
S.Korea Kospi 1435.20 gain 4.26 up 0.3%
JGB Yield 1.8950% up 0.0100
(All values as of 0450 GMT)
STOCKS: Japanese stocks edged higher on bargain-hunting Tuesday, after the benchmark index suffered a 2.8% drop on Monday, its biggest one-day fall since January. Prices of precious and base metals were mixed but traders predict commodities will continue to surge.

BONDS: Prices of Japanese government debt moved little Tuesday, as dealers noted that investors are looking for reasons they should buy, after the 10-year hit 2.0% recently. The latest 20-year auction saw tepid demand.

OIL: Crude futures fell 15 cents to $73.18 as traders pocketed profits on last week's big gains, and looked ahead to the release of U.S. petroleum inventories data on Wednesday for fresh leads. Meanwhile, events in Venezuela, Nigeria and Iran kept the market on edge.

EUROPEAN OUTLOOK: Stocks Set For Healthy Gains

Euro-USD 1.2381 loss 0.0014 dn 0.1%
Stlg-USD 1.7868 loss 0.0022 dn 0.1%
USD-Franc 1.2692 gain 0.0020 up 0.2%
(All values as of 0450 GMT)
European shares should start the session in positive territory, with prices of government debt little changed and the euro lower.

STOCKS: European markets are likely to push higher at the open as investors tackle a flood of corporate earnings.

U.K. spreadbettor Cantor Index is calling the FTSE up 20 points at 6118, the DAX up 16 at 6095 and the CAC up 17 at 5238.

European stock markets declined on Monday as investors weighed currency moves and a weaker start to trading on Wall Street, though Deutsche Telekom gained after private-equity firm Blackstone agreed to make an investment.

BONDS: Prices of European government debt may start little changed as investors await Tuesday's release of the influential Ifo survey of German business confidence. But investors remain ready to sell into any gains, as they eye fluctuations in the euro.

"The key issue for the ECB is the behavior of the euro," said Nick Stamenkovic, a bond strategist at RIA Capital Markets. "The euro has hit a 2006 high (Monday) and if the euro continues to strengthen that will lessen the need for the ECB to tighten going forward, which would be clearly good news for the short end," he said.

The Ifo survey of German business confidence by the University of Munich's Institute for Economic Research due 0830 GMT Tuesday.

After hitting its highest level since May 1991 in March, the index is expected to ease to 104.8 in April from 105.4, according to a Dow Jones Newswires survey of economists. But previous forecasts for a drop have proved wrong.

"Reasons cited for a moderate deterioration in German business climate are manifold, ranging from rising oil prices over a strengthening euro to 'technical correction'," HVB strategist Kornelius Purps said in a note.

"Over the past couple of months, however, similar factors have been highlighted, but the Ifo index kept on rising," he said.

In the U.K., dealers look for more profit-taking in gilts because they have outperformed.

FOREX: The euro opens lower on some profit-taking off its big jump on Monday, but dealers say they are ready to buy again at around $1.2360 to again take profit at around $1.2440.

Some analysts believe that the dollar will continue its decline when the market realizes that the Fed will stop hiking beyond the 25 basis points to 5.0% expected during its May meeting. This theory could be tested Thursday when new Fed Chairman Ben Bernanke testifies before the Congressional Joint Economic Committee in Washington. The Fed chairman will be poked and prodded for insights into the state of the U.S. economy, and investors will be watching signs of the Fed's intentions.

Analysts say that the testimony will be especially important given the dollar negative sentiment in the market.

CALENDAR: Tuesday, Apr 25: German CPI, Ifo;

GMT Expected Previous
0600 GER Mar Foreign trade prices
0600 GER Mar CPI, prelim +0.2%MM +0.1%MM
+1.9%YY +1.9%YY
0800 GER Apr IFO Institute for Economic Research 104.8 105.4
German Business Climate Index
0830 GER 18th Banking Congress with Commmerzbank
CEO Mueller, Fin Min Steinbrueck,
Deutsche Bank CEO Ackermann, Bundesbank
Pres Weber, Chancellor Merkel
0900 EU Mar Euro Zone Stock Mkt Capitalization
0900 EU Feb Euro Zone Foreign Trade
1000 UK Apr CBI Indus Trends Survey +9.0 +13
1145 US Apr 22 ICSC Store Sales Index +1.1%
1255 US Apr 22 Redbook Retail Sales Index +4.1%
1400 US Mar Existing Home Sales -3% +5.2%
1400 US Apr Richmond Fed Mfg Index +21
1400 US Apr Conference Board Consumer Confidence 106 107.2
Index
1400 US Tsy Secy Snow speaks to students in
Washington
1405 US Pres Bush speaks on energy in
Washington
1630 EU ECB Member Gonzalez-Paramo speaks on
global imbalances in the euro and the
dollar at a globalized economy
conference in Miami
2100 US Apr 23 ABC/Washington Post Consumer Confidence -7
Index
N/A GER Call for bids for EUR6 billion tap
auction of 5-year notes
N/A EU ECB Member Papademos presents ECB
Annual Report to European Parliament, Brussels
N/A GER World Energy Dialogue 2006 conference, Hanover

Assa Abloy (ASSA-B.SK): 1Q Earnings
Average pretax profit (SME Direkt, 14 analysts): SEK948M (SEK764M)
Note: Earnings are seen boosted by higher sales. 1Q operating margin is seen rising to 14.9% from year-ago 14.2%. Earnings figures will be overshadowed by details on upcoming restructuring plans.


Austrian Airlines (AUA.VI): 1Q Earnings
Average EBIT loss (DJ, 5 analysts): EUR60.5M (EUR66.1M loss)
Average revenue: EUR539M (EUR462.5M)
Note: Revenue rise due primarily to a 14% increase in passengers. However high kerosine costs continue to hamper earnings, analysts say.


Banco Sabadell (SAB.MC): 1Q Earnings
Average net profit (DJ, 5 analysts): EUR118.2M (EUR105.8M)
Note: Profit rise seen on continuing broad pickup in lending volumes posted in 4Q 05. 1Q net interest income seen +11% to EUR262.3M from EUR234.8M. Focus will be on margins, which likely remain under pressure, and on cost benefits from Atlantico restructuring. Report due pre-market.


BP (BP): 1Q Earnings
Average clean profit (DJ, 4 analysts): $5.1B ($4.96B)
Note: BP reports at 0700 GMT. Clean number excludes non-operating items. First quarter profit will be up due to higher oil prices. But higher oil prices will barely offset lower crude output and Texas refining shutdown. Citigroup also says impact of 39% tax level, compared to 32% last year, partly due to higher North Sea tax.


Casino Guichard-Perrachon (12558.FR): 1Q Revenue
Average revenue (DJ, 7 analysts): EUR5.85B (EUR5.08B)
Note: Last year's acquisitions, notably of CBD and Vindemia, are the retailer's main growth drivers, while organic growth is seen between 4% and 6%, say analysts. Market share and same-store performance at discount chain Leader Price, are two indicators to watch closely, analysts say. An update on EUR2 billion asset disposal program would also be welcome, analysts say. Company reports after market close.


Game Group (GMG.LN): FY Earnings
Average profit (Co, 11 analysts): GBP9M (GBP29M)
Average EPS: 1.8p (5.7p)
Note: "Game Group is in a difficult position because it is dependent on factors it cannot influence such as game cycles and the launch of Play Station 3. Game's costs, both utility and rent, however, are rising," says analyst.


Hagemeyer (35547.AE): 1Q Sales
Average sales (DJ, 3 analysts): EUR1.39B (EUR1.25B)
Note: Sales seen rising 11% on restructuring efforts, says an analyst. Focus remains on the UK operations, the analyst adds.


Jyske Bank (JYSK.KO): 1Q Earnings
Average core income (SME Direkt, 7 analysts): DKK489M (DKK435M)
Note: Income rise thanks to higher commission income. Eyes will be on costs, which are seen rising to DKK866M from DKK733M in 1Q '05, on the back of new hires and investments.


McCarthy & Stone (MCTY.LN): 1H Earnings
Average pre-items pretax profit (Co, 5 analysts): GBP40.7M (GBP48.3M)
Note: Teather & Greenwood analyst Kate Moy, who expects a profit of GBP38M, says a trading statement in March showed the forward sales position was much improved, but that the market needs to know the impact on margins from incentives. "We've been a little to bearish on their margin dilution," she says. Moy has a hold rating.


Michelin (12126.FR): 1Q Revenue
Average pretax profit (Co, 11 analysts): EUR3.85B (EUR3.61B)
Note: Analysts looking for pointers on how the company is grappling with the rise in raw material costs. Company reports after-market.


Micronas (MASN.EB): 1Q Earnings
Average net profit (DJ, 3 analysts): CHF3M (CHF7.7M)
Note: Margins are suffering due to increased R&D spending. Competitors have warned of a weak quarter for LCD TV's in Europe. Sales seen 6.9% higher at CHF207.2M. Margin development and 2Q forecast will be the focuses. Report due pre-market.

Nestle (NESN.VX): 1Q Sales
Average sales: CHF22.8B (CHF20B)
Note: Sales seen rising on soaring demand and portfolio shifts. Company doesn't report quarterly profit figures. Organic sales growth seen at 6.1% versus 4.6%. Guidance for 06 will be scrutinized with company seen likely to repeat 5%-6% organic growth target and flag aim to improve operating margin. Recently underperforming areas and markets such as Russia and UK confectionary business will also be in focus. Report due at 0530 GMT.


Richemont (CFR.VX): FY Sales
Average sales: EUR4.25B (EUR3.72B)
Note: Sales seen rising on continued strong demand for jewelry and luxury watches. Earnings will be released June 8. Any indication about future sales or margins as well as acquisition or divestments plans will be closely watched. Report due at 0500 GMT.


Schwarz Pharma (SRZ.XE): 1Q Earnings
Average net profit (DJ, 9 analysts): EUR1.6M (EUR1.1M)
Note: Net profit rise reflects a lower tax rate. Ongoing high R&D and premarketing expenses will drive EBIT -71% to EUR8.8M vs EUR30M. Sales to climb to EUR244M vs EUR238M driven by higher generics drugs sales. Full year guidance of a break-even net result may be revised to EUR50M after Pfizer's $100M payment. Analysts watching out for first indication of Parkinson drug Neupro sales where launch started in Germany and UK in March.


SKF (SKF-B.SK): 1Q Earnings
Average net profit (SME Direkt, 15 analysts): SEK911M (SEK790M)
Average sales: SEK12.76B (SEK11.87B)
Note: JP Morgan is looking for a dramatic recovery in SKF's growth from 4Q '05, driven by an uptick in European industrial demand, strong car sales and continued strength in SKF's other markets.


STMicroelectronics (STM): 1Q Earnings
Average EPS (DJ, 5 analysts): $0.105 ($0.03)
Average revenues: $2.3B ($2.1B)
Average gross margin: 35% (32.9%)
Note: Rise in earnings is expected to be due to restructuring and falling supply in the microchip market, which is driving up prices. Analysts are looking for evidence of easing price pressure in non-memory chips and would like to learn whether price pressure on microprocessors is increasing. Also looking for update on restructuring and confirmation of outlook. Report due after the market close.


Synthes (SYST.VX): 1Q Sales
Average sales: $572.3M ($502.9M)
Note: Sales rise driven by strong organic growth especially in the US, but held back by a negative currency effect, according to an average of 4 analysts' forecasts. Focus will be on growth in North America, news on the ProDisc launch and the deal with AO.


TeliaSonera (TLSN.SK): 1Q Earnings
Average net profit (SME Direkt, 17 analysts): SEK3.1B (SEK3.2B)
Average revenues: SEK21.5B (SEK20.8B)
Note: Analysts on average expect the company to record SEK556M in restructuring charges in 1Q, compared to a positive SEK1M recorded in the same period last year. Underlying EBITDA growth seen at 5.1% to SEK7.2B from SEK6.9B.


Tesco (TSCO.LN): FY Earnings
Average pre-items pretax profit (DJ, 9 analysts): GBP2.18B (GBP1.90B)
Forecast range: GBP2.15B - GBP2.20B
Average sales: GBP38.3B (GBP33.97B)
Note: Analysts and investors also eye the UK's largest retailer's update on its property portfolio plans, following market speculation it will restructure, leading to a multibillion capital return to shareholders.


TomTom (38705.AE): 1Q Earnings
Average net profit (DJ, 4 analysts): EUR34.7M (EUR13.8M)
Average sales: EUR216M (EUR66.2M)
Note: Profit and sales surge as navigation equipment has moved to a mass market. Eyes on margins, average selling prices which are expected to drop as market competition is increasingly rising. Analysts eye comments on future margins and selling prices development.


Unaxis (UNAX.VX): 1Q Earnings
Average EBIT (DJ, 3 analysts): CHF54M (N/A)
Average sales: CHF457M (CHF338M)
Note: In 2005, company didn't break-out quarterly profitability figures. With new management installed last summer, and a far-reaching restructuring performance, business is expected to have been given a fillip, analysts say, and 1Q 2005 was very weak. Any word on acquisitions will be taken into consideration.


UPM-Kymmene (UPM): 1Q Earnings
Average net profit (SME Direkt, 18 analysts): EUR118M (EUR205M)
Average sales: EUR2.41B (EUR2.28B)
Note: Last year's number included a EUR89M gain from the sale of shares. Eyes are on comments regarding price increases and the ongoing restructuring program.


Verbund (VER.VI): 1Q Earnings
Average net profit (DJ, 5 analysts): EUR135M (EUR96.7M)
Average EBIT: EUR200M (EUR134M)
Note: "Margins have improved a lot due to high wholesale power prices in 2H 05 and 1H 06," says Erste Bank analyst Christoph Schultes.


Volvo (VOLVY): 1Q Earnings
Average pretax profit (SME Direkt, 17 analysts): SEK4.409B (SEK4.603B)
Average sales: SEK56.547B (SEK52.253B)
Note: Like in 4Q 05, costs for ongoing product launches and production changeover is seen hitting profits. JP Morgan sees 1Q operating margin fall to 7.9% from 8.7%, also due to a negative regional mix, with Volvo's North American business growing faster than Europe, which is seen achieving higher margins. Focus will be on comments on prebuying ahead of new emission standards and how Volvo will use its surplus cash.


Whitbread (WTB.LN): FY Earnings
Average pretax pre-exceptional profit from continuing operations (DJ, 4 analysts): GBP183M (GBP169M)
Note: Analysts are looking for an update on the planned sale of the remaining Marriott hotels as well as any news on mooted bids for Next Generation health clubs and Travelodge hotels businesses.

OTHER SCHEDULED EVENTS:

Aegon (AEG): AGM

AGFA (AGFB.BT): AGM

Akzo Nobel (AKZOY): AGM

Alliance UniChem (AUN.LN): AGM

Andvord Tybring-Gjedde (ATG.OS): 1Q Earnings

Anglo American (AAUK): AGM

Apem (5348.FR): AGM

ARC International (ARK.LN): AGM

ARM Holdings (ARMHY): AGM

Befesa Medio Ambiente (BMA.MC): AGM

Benfield Group (BFD.LN): AGM

Biotec Pharmacon (BIOTEC.OS): AGM

Bradford & Bingley (BB.LN): AGM

Brit Insurance Holdings (BRE.LN): AGM

Capio (CAP.SK): 1Q Earnings

Capita Group (CPI.LN): AGM

Carpetright (CPR.LN): 1H Earnings

ContExtVision (COV.OS): 1Q Presentation

CPH Chemie & Papier Holdings (CPHN.EB): FY Earnings

Datamonitor (DTM.LN): AGM

DnB NOR Bank (DNBNOR.OS): AGM

Doro (DORO-A.SK): 1Q Earnings

EDB Business Partner (EDBASA.OS): 1Q Earnings

Elanders (ELAN-B.SK): AGM

Ementor (EME.OS): 1Q Earnings

eQ Corporation (EQO1V.HE): 1Q Analysts/Media Presentation

Fagerhult (FAG.SK): AGM

Forbidden Tecnologies (FBT.LN): FY Earnings

ForeningsSparbanken (FSPA-A.SK): AGM

Fortum (FUM1V.HE): 1Q Earnings

Gemplus International (GEMP): AGM

Geveko (GVKO-B.SK): 1Q Earnings

Geveko (GVKO-B.SK): AGM

HBOS (HBOS.LN): AGM

Idmos (IDO.LN): 1H Earnings

Inbev (INB.BT): AGM/EGM

Integrated Asset (IAM.LN): FY Earnings

Intrum Justitia (IJ.SK): 1Q 2006 Presentation

IVF Hartmann (VBSN.EB): AGM

Know IT (KNOW.SK): AGM

Kone (KNEBV.HE): 1Q Earnings

Kverneland (KVE.OS): 1Q Earnings

London & St Lawrence (LSLI.LN): 1H Earnings

Lonmin (LMI.LN): Trading Update

L'Oreal (12032.FR): AGM/EGM

Mamut (MAMUT.OS): AGM

Mandator (MAND.SK): 1Q Earnings

Morgan Sindall (MGNS.LN): AGM

Mouchel Parkman (MCHL.LN): 1H Earnings

Nordic Semiconductor (NOD.OS): AGM

Northern Rock (NRK.LN): AGM

Novestra (NOVE.SK): AGM

Office2office (OFF.LN): AGM

Outokumpu (OUT1V.HE): 1Q Earnings

Perlos (POS1V.HE): 1Q Earnings

ReadSoft (RSOF-B.SK): AGM

RoyalBlue Group (RYB.LN): AGM

Rugby Estates (RES.LN): FY Earnings

Serono (SRA): AGM

SGL Carbon (SGG): 1Q Earnings

SiparEx Croissance (6158.FR): AGM

Subsea 7 Inc (SUB.OS): 1Q Earnings

Synchronica (SYNC.LN): FY Earnings

Tandberg Storage (TST.OS): 1Q Presentation/AGM

Teleste Corporation (TLT1V.HE): 1Q Earnings

TF1 - Societe Television Francaise 1 (5490.FR): 1Q Earnings

TF1 - Societe Television Francaise 1 (5490.FR): AGM

Thomson Intermedia (THN.LN): FY Earnings

Topdanmark (TOP.KO): AGM

Trelleborg (TREL-B.SK): AGM

Ukrproduct Group (UKR.LN): FY Earnings

Unilabs (ULB.EB): 3Q Earnings

Venture Production (VPC.LN): FY Earnings

Vestas Wind Systems (VWS.KO): AGM

Vontobel Holding (VONN.EB): AGM

Fornix Biosciences (43999.AE): FY 2005 Ex-Dividend Date

Gestevision Telecinco (TL5.MC): FY 2005 Dividend Payment Date


(END) Dow Jones Newswires