Hitt og þetta 8. febrúar 2006


US SUMMARY: Commodities Sink, So Do Stocks

DJIA 10749.76 loss 48.51 dn 0.5%
NASDAQ 2244.96 loss 13.84 dn 0.6%
S&P 500 1254.78 loss 10.24 dn 0.8%
Dow Future 10767.00 0.00 0.0%
NASDAQ Future 1665.00 gain 2.50 up 0.2%
S&P Future 1257.50 0.00 0.1%
10-Yr US Treasury: 4.57% up 0.03
(Futures values as of 0550 GMT)
Declining oil prices and weakness in other commodities sent stocks lower Tuesday, as investors took profits and beat up the stocks that led Wall Street's early January rally. Treasurys fell.

STOCKS: Gold, silver, oil - "anything you can drop on your foot and it hurts" - is retreating, said Gary Kaltbaum, a money manager in Orlando, Florida.

The run up in commodities prices "went too far too fast," he said. Copper prices, for instance, broke through $4,000 a ton three months ago and passed $5,000 a ton last week, according to Merrill Lynch.

Investors sold off oil-sector stocks after oil futures dropped more than $2 a barrel, but they didn't move their money into financial or semiconductor stocks, as they did the last time oil dropped, said Matt Kelmon, portfolio manager of the Kelmoore Strategy Funds.

"A lot of (the selling) is technical," he said. "People are selling off the winners they had in January."

Crude oil futures dropped as U.S. weather remained mild, petroleum inventories remained strong and fears receded over possible disruptions to Iranian oil. A barrel of light crude settled at $63.09, down $2.02, in trading on the New York Mercantile Exchange.

The mood on the Street seems to have changed, with investors returning to the jitters that largely defined 2005.

While Tuesday's earnings surprises were positive, with Walt Disney Co. and Emerson Electric Co. beating analysts' expectations, they weren't enough to send the indexes higher.

"For some reason, the market wants to focus on other things," said Philip S. Dow, managing director of equity strategy at RBC Dain Rauscher in Minneapolis. The message, he said, is that investors are hardly enamored with stocks and are waiting for a big catalyst that will lift stock prices.

One measure of the sentiment shift came from a bull. One of the Street's most bullish strategists, Prudential Financial's Ed Keon, cut his recommended stock weighting to 55 percent this week from the 100 percent allocation he has recommended since July.

In a note this week he wrote, "The bull case for U.S. stocks took some hits last week. The weak GDP (gross domestic product) report led to an apparent drop in productivity and higher than expected rise in unit labor costs," which hurt the case for lower inflation. He added first-quarter corporate earnings expectations, without energy stocks, "might not be much above zero" and said the situation in Iran heightens uncertainty.

Cisco Systems Inc. shares were on the rise in late trading Tuesday, after the company, excluding charges, beat Wall Street's earnings expectations for its fiscal second quarter.

General Motors Corp., which says a return to profitability will require sacrifices from all involved, announced plans to rein in office workers' pension and health care expenses, slash the dividend and trim executive salaries.

BONDS: Foreign buyers largely avoided the first leg of the February debt refunding Tuesday, leaving Treasury prices mostly lower. But market participants were divided over what the weak non-dealer demand for new three-year notes means for 10- and 30-year debt sales due over the next two sessions.

"Whether that's bad news for the upcoming auctions depends on whether you take a cup-half-empty or cup-half-full perspective," said Gerald Lucas, chief Treasurys trading strategist at Banc of America Securities in New York.

ASIAN SUMMARY: Profit-Taking Hits Tokyo Stocks Again

USD-Yen 117.99 loss 0.04 dn 0.03%
AUD-USD 0.7386 loss 0.0016 dn 0.2%
Nikkei 225 16335.96 loss 385.00 dn 2.3%
Hang Seng 15391.81 loss 125.20 dn 0.8%
Taiwan Index 6624.11 loss 95.97 dn 1.4%
S.Korea Kospi 1309.58 loss 22.70 dn 1.7%
JGB Yield 1.5900% up 0.0200
(All values as of 0550 GMT)
STOCKS: Tokyo stocks fell for a second day as investors locked in profits from a five-year high hit earlier this week by the main index, especially in such sectors as pharmaceuticals and insurance.

BONDS: Prices of Japanese government bonds are lower, and the 10-year yield may rise to around 1.60% at around 1.59%, before the March 31 fiscal year-end, says Lehman Brothers chief strategist Makoto Yamashita. "I expect JGB yields to rise in the medium-term. Treasury yields are in a rising trend, and investors' long bond purchases aren't likely to be as strong as when the yield popped above 1.6% last year."

OIL: Crude oil prices were 3 cents lower at $63.06 after falling more than $2 a barrel in the previous session ahead of the release of U.S. oil inventory data expected to show that stockpiles have increased. Fears over possible disruptions to the Iranian oil supply because of its nuclear ambitions took a back seat to the sense that overall, energy supplies are ample.

EUROPEAN OUTLOOK: Shares Face Early Selloff

Euro-USD 1.1970 loss 0.0011 dn 0.1%
Stlg-USD 1.7448 0.0000 0.00%
USD-Franc 1.2984 gain 0.0010 up 0.08%
(All values as of 0550 GMT)
Prices of European stocks and government debt are likely to start lower, while the euro opens steady.

STOCKS: With Wall Street retreating again overnight, investors are likely to question whether January's positive run in Europe was a false dawn.

Tom Hougaard of U.K. spreadbettor City Index expects the market "to take a breather for more than a couple of days" following the rally since last October.

"We are oversold enough to warrant a rally for a day or so, but the bulls have got to be asking themselves if the positive January was simply just one big fake rally, and the trend for the coming year has now emerged," Hougaard said.

Meanwhile CMC Markets is calling the FTSE down 12 points at 5735, the DAX down 19 at 5654 and the CAC down 20 at 4915.

European stock markets traded mixed Tuesday, as gains from telecom stocks such as Portugal Telecom and KPN offset declines in the oil and gas sector.

BONDS: Prices of European government debt may open little changed to slightly lower as the market tries to steady itself.

"After two weeks of declines, European bonds are steadying, with trading likely to remain range-bound for the rest of the week," said Rainer Satoris, fixed-income strategist at HSBC Trinkhaus & Burkhardt."Buyers are coming back into the market after the selloffs in recent weeks," added Padhraic Garvey, fixed-income strategist at ING Bank.

While the euro-zone data calendar is thin, U.K. investors will turn their attention to the release of industrial production data for December, due at 0930 GMT Tuesday. Economists polled by Dow Jones Newswires expect a modest 0.1% rise in the monthly figure. Only a surprise outcome is likely to have a market-moving impact.

The spotlight of this week, however, will be Thursday's rate decision by the Bank of England, with the announcement due at 1200 GMT.

European government bonds erased earlier gains Tuesday as investors switched out of fixed-income markets and into equities. A tap auction of EUR4 billion of the 4.5% 30-year Greek bond may also have added some pressure. Investors also took notice of the auction of 2017 index-linked gilts, which drew decent demand.

FOREX: The euro is little changed, with euro zone data supporting it against the dollar.

Analysts said that with European Central Bank officials continuing to signal that a March rate hike is likely and with other recent euro-zone data proving stronger than expected, the euro is holding up against the data.

In the UK, the Bank of England is widely anticipated to keep rates on hold at 4.50% when it meets this week. However, in a research note Tuesday, Steven Saywell, senior currency strategist at Citigroup in London, said that while the BRC "data is not sufficiently weak for fixed income markets to price in a rate cut ... further weak UK data will prove the catalyst for markets to price in lower base rates."

The dollar fell against the yen Tuesday, as profit taking on yen-bearish bets sparked broader buying of the Japanese currency.

CALENDAR: Wednesday, Feb. 8: UK Factories; US Energy

GMT Expected Previous
0700 GER Dec Foreign Trade +12.0B +13.3B
0700 GER Dec Current Account +7.5B +8.1B
0930 UK Dec Index of Production +0.3%MM +0.6%MM
-2.3%YY -2.4%YY
0930 UK Dec Mfg Output +0.1%MM +0.4%MM
-1.8%YY -1.8%YY
1030 UK Jan Monthly Shop Price Index
1200 US Feb 3 MBA Refinancing Index -1.5%
1200 GER Lower house of parliament meets, Berlin
1530 US Feb 3 US Energy Dept Gasoline Stocks (in +1.6M +4.2M
1530 US Feb 3 US Energy Dept Crude Oil Stocks (in +900,000 +1.9M
1530 US Feb 3 US Energy Dept Distillate Stocks (in -300,000 -200,000
N/A UK Jan Monthly Consumer Confidence Index

-By Dennis Baker; Dow Jones Newswires; dennis.baker@dowjones.com

(MORE TO FOLLOW) Dow Jones Newswires

February 08, 2006 01:45 ET (06:45 GMT)

Copyright (c) 2006 Dow Jones & Company, Inc.

8 Feb 2006 06:45 GMT =DJ EUROPEAN MORNING BRIEFING: Corporate Events

(This repeats an item published at 0600 GMT)

BOC Group (BOX): 1Q Earnings
Average pretax profit under GAAP (DJ, 3 analysts): GBP132.5M (GBP132.0M)
Forecast range: GBP129.8M - GBP134.5m
Note: Analysts expect BOC's core industrial gases operations, Process Gas Solutions and Industrial & Special Products, to have performed well, boosted by new contracts worldwide and economic growth in Asia.

While Linde's 1500p a share approach has buoyed BOC shares recently, analysts say BOC is likely to say little on this issue. They believe BOC's management may take the opportunity to reiterate its objections to the potential GBP7.6B bid, but that it's unlikely BOC will add anything new to those objections.

One analyst said he's hoping BOC might comment on its pension deficit, which has been widely reported as a possible impediment to interest from potential bidders. Some analysts say German industrial conglomerate Linde may soon sweeten its 1500p a share cash proposal, and address the issues that caused the friendly approach to stumble - namely the offer price, a lack of clarity about financing, and potential regulatory hurdles. Others, doubting that Linde could or will raise its bid, are now telling clients to reduce their holdings in BOC and take profits.

Gambro (GAMB-B.SK): 4Q Earnings
Average EBITDA (SME Direkt, 12 analysts): SEK749M (SEK721M)
Average sales: SEK3.87B (SEK3.47B)
Average pretax profit: SEK431M (SEK463M)
Note: Net profit fall in part due to a tough comparable. Gambro in 4Q 04 sold off its stake in a marine cargo company, resulting in a capital gain of about SEK400M.

GlaxoSmithKline (GSK): 4Q Earnings
Average pretax profit (Co, 16 analysts): GBP1.5Bn (GBP1.32BN)
Average sales: GBP5.65M (+7.8%)
Note: The company is expected to give details of its U.S. filing strategy for cervical cancer vaccine Cervarix, a potential blockbuster, and could unveil an update on a number of key drugs in phase II development.

Established drugs like asthma treatment Advair, diabetes drug Avandia and the vaccine operations are expected to push growth, more than offsetting the decline of sales of antidepressants Paxil and Wellbutrin due to generic competition. Analysts at brokerage Merrill Lynch expect sales of Advair, which is marketed as Seretide in Europe, to have risen 21% to GBP2.95 billion in 2005.

GlaxoSmithKline could also shed light on its ongoing discussions with the U.S. FDA over the regulator's proposal to put a stronger warning on Advair's label. Some market observers are also hoping to get signals from GlaxoSmithKline on whether it's interested in acquiring Swiss biotech company Serono SA (SRA), which has put itself up for sale. Earnings will be released at 1200 GMT.

Lagardere Media (13021.FR): FY Revenue
Average revenue (DJ, 5 analysts): EUR7.90B (EUR7.50B)
Note: Analysts believe 2005 revenue will benefit from a good end to the year at the book division and to a lesser extent from good performance at Lagardere Active. Focus will be on pay TV negotiations and potential investment opportunities ahead of the sale of EADS.

Metso (MEO1V.HE): 4Q Earnings
Note: Metso is set to release strong 4Q '05 results, driven principally by Metso Minerals and cost cutting across the group, Credit Suisse says. Says market will be looking for clues regarding the strategic review surrounding the group's current corporate structure, due toward the end of 1Q '06. However, "the key issue for the group is the profitability and growth outlook of Metso Paper." Sees 4Q pretax profit at EUR96M, EUR72M net, EPS at EUR0.51. Keeps neutral recommendation with EUR25 target price.

M-real (MRLBV.HE): 4Q Earnings
Average net loss (SME Direkt, 19 analysts): EUR39.3M (EUR46M loss)
Note: Company pre-announced EUR40M of non-recurring costs mid-January, related to efficiency enhancement programs. Sales seen decreasing around 2% to EUR1.339B. Focus on comments on fine paper demand and prices as well as possible capacity cut downs.

Peugeot-Citroen (12150.FR): FY Earnings
Average net profit (Thomson Financial, 27 analysts): EUR1.17B (EUR1.68B)
Note: Operating margin seen 3.4%, in line with company's guidance vs 4.5% in FY 04, reflecting low volume sales, weak mix and price war in Europe. Analysts looking for talk of pick-up in 2H 06. Peugeot reports pre-market.

Reckitt Benckiser (RB.LN, RB): FY Earnings
Average pretax profit (Co, 10 analysts): GBP860M (GBP770M)
Average revenue +8% to GBP4.17B from GBP3.87B and net income +11% to GBP649M from GBP586M. Analysts look for more detail
on integrating Boots Healthcare as well as ambitious revenue and net profit targets for 06. UBS analyst Eva Quiroga looks
to company's product pipeline as "crucial" to continued success of strategy, and the latest on new product rollouts,
notably Finish Quantum. "The feedback is that it's working well," she says, though 4Q comparatives will be difficult
to match given strong year-ago period and slowdown in western Europe, Reckitt's largest market. Shares +0.6% at 1,921p. (HET)

Sandvik (SAND.SK) 4Q Earnings
Average pretax profit (SME Direkt, 15 analysts): SEK2.38B (SEK1.91B)
Average revenue: SEK16.84B (SEK14.38B)
Note: Analysts are concerned the earlier strong growth is starting to slow down. Focus in report is on steel pricing and the margin in Materials Technology, which the company has targeted at 12%. Eyes also on order intake in Tooling.

Santander (STD): 4Q Earnings
Average net profit (DJ, 7 analysts): EUR2.29B (EUR60M loss)
Note: 05 profit seen boosted by extraordinary gains of around EUR1B from divestments while 04 profit was negatively impacted by early retirement charges. Analysts to focus on progress of UK unit Abbey. Reports premarket.

ScottishPower (SPI): 3Q Earnings
Average pretax, pre-exceptional profit (DJ, 4 analysts): GBP190M (N/A)
Average pre-exceptional EPS: 7.07p (N/A)
Note: Comparable historical figures haven't been provided under IFRS but analysts agree profits will rise. Profit growth seen stemming from UK businesses, particularly its generation and supply division. Analysts are waiting to hear the new CEO's views about the utility's performance and seek an update on the potential sale of its PPM Energy unit and progress on PacifiCorp sale.

Skandinaviska Enskilda Banken (SEB-A.SK): 4Q Earnings
Average net interest income (SME Direkt, 24 analysts): SEK3.558B (SEK3.368B)
Average operating profit: SEK2.913B (SEK2.723B)
Note: The result is seen boosted by lending volumes and high activity in financial markets. Analysts are watching costs, margin development. Report due at around 0700 GMT.

(MORE TO FOLLOW) Dow Jones Newswires

February 08, 2006 01:45 ET (06:45 GMT)

Copyright (c) 2006 Dow Jones & Company, Inc.

8 Feb 2006 06:45 GMT =DJ EUROPEAN MORNING BRIEFING: Corporate Events -2-

(This repeats an item published at 0600 GMT)


AcandoFrontec (AFAB-S.SK): FY Earnings

Actielec Technologies (7665.FR): 4Q Revenue

Aedian (400592.FR): 1H Earnings

Allianz Holding (AZ): EGM

Alphameric (ALM.LN): FY Earnings

Apptix (APP.OS): 4Q Earnings
Artemis Alpha Trust (ATS.LN): EGM

Axis (AXIS.SK): FY Earnings

Beltton Group (BTN1V.HE): FY Earnings

Belvedere (6087.FR): FY Revenue

Billerud (BILL.SK): FY Earnings

Birdstep Technology (BIRD.OS): FY Earnings

Bunzl (BNZL.LN): FY Earnings

Canacord Capital (CCI.LN): 3Q Earnings

Chemring (CHG.LN): FY Earnings

CNP Assurances (12022.FR): FY Revenue

Componenta (CTH1V.HE): AGM

Corporacion Mapfre (MAP.MC): FY Earnings

Daily Mail & General Trust (DMGT.LN): AGM

Douglas Holding (DOU.XE): 1Q Earnings

Eltek (ELT.OS): FY Earnings

ENEA (ENEA.SK): FY Earnings

FHB (FHB.BU): Unveils New Mid-Term Strategy

Finnair (FIA1S.HE): January Traffic Data

GFI Informatique (403809.FR): FY Revenue

GL Events (6667.FR): 4Q Revenue

Henderson TR Pacific (HPI.LN): FY Earnings

Hermes International (5229.FR): FY Revenue

Huhtamaki (HUH1V.HE): 4Q Earnings

Inmeta (INM.OS): 4Q Earnings

Karo Bio (KARO.SK): FY Earnings

Klovern (KLOV.SK): FY Earnings

NCC (NCC-A.SK): FY Earnings

Oriflame Cosmetics (ORI-SDB.SK): FY Earnings

Orix Corp (IX): 3Q Earnings

PagesJaunes (1009635.FR): FY Earnings

PKC Group (PKC1V.HE): FY Earnings

Rautaruukki (RTRKS.HE): FY Earnings

Seco Tools (SECO-B.SK): FY Earnings

Semcon (SEMC.SK): FY Earnings

SkyEurope Holding (SKY.VI): 1Q Earnings

Softronic (SOF-B.SK): FY Earnings

SSH Communications Security (SSH1V.HE): FY Earnings


Stockmann (STCBV.HE): FY Earnings

Tandberg Data (TAD.OS): FY Earnings

Tandberg Television (TAT.OS): 4Q Earnings

TPSA: 4Q Earnings

Union Financiere de France (3454.FR): FY Earnings

Viking Line (VIK1V.HE): AGM

WM-Data Nordic (WM-B.SK): FY Earnings

(MORE TO FOLLOW) Dow Jones Newswires

February 08, 2006 01:45 ET (06:45 GMT)

Copyright (c) 2006 Dow Jones & Company, Inc.

8 Feb 2006 06:45 GMT =DJ EUROPEAN MORNING BRIEFING: Div Payment & Ex-Div Dates

(This repeats an item published at 0600 GMT)

Aberforth Smaller Companies (ASL.LN): FY 2005 Ex-Dividend Date

AstraZeneca (AZN.LN): 1H 2006 Ex-Dividend Date

City Merchants High Yield (CHY.LN): 1H 2005 Ex-Dividend Date

Electra Investment Trust (ELTA.LN): Special Ex-Dividend Date

Jupiter Dividend & Growth (JDTE.LN): 4Q 2005 Ex-Dividend Date

Royal Dutch Shell PLC 'A' (RDSA.LN): 4Q 2005 Ex-Dividend Date

Royal Dutch Shell PLC 'B' (RDSB.LN): 4Q 2005 Ex-Dividend Date

Total Systems (TTS.LN): 1H 2005 Dividend Payment Date

Treatt (TET.LN): FY 2005 Ex-Dividend Date

(END) Dow Jones Newswires

February 08, 2006 01:45 ET (06:45 GMT)

Copyright (c) 2006 Dow Jones & Company, Inc.