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05/10/07


 

FTSE 100

6547.9, +12.7

Dow

13974.3, +6.3

FTSE 250

11370.5, +10.3

Nasdaq

2733.57, +4.14

FTSE All Share

3365.8, +5.68

S&P 500

1539.6,  +3.25

Nikkei

17065, -27.5

Hang Seng

27608.1, +634.1

Oil (Brent)

$77.62

Gold

$735.71

Base Rate

5.75%

10 Yr Gilt

4.95%

£/$

2.0350

Euro/Gbp

0.6941


Markets

US stocks closed 6.3 points higher on Thursday to close at 13974.3, recovering from early declines, but any advances were limited ahead of today's monthly jobs report. The S&P500 closed 3.25 points higher at 1539.6 and the Nasdaq added 4.14 points to close at 2733.57. Stocks had inched lower in the morning as investors mulled weak reports on the labor market and manufacturing sector. But the tone improved as the session wore on.

Research in Motion reported higher quarterly earnings and revenue that beat expectations and boosted its current quarter profit forecast. However, investors took a "sell the news" reaction, sending shares more than 7 percent lower.

After the close, Alcoa said it will sell two of its divisions and that it will restructure another one. Shares in the company slipped 1 percent in extended hours trading.

In economic news, the weekly jobs report showed that the number of Americans filing new claims for unemployment surged although the four week moving average only edged up slightly. Another report showed a bigger than expected drop in August factory orders. Orders fell 3.3 percent in the month, the biggest drop in seven months due to broad weakness in the manufacturing sector.

Today all eyes will be on non farm payrolls report. Economists expect employers added around 100,000 jobs to their payrolls in September, after reporting a drop in payrolls in August of 4,000. The unemployment report expected to have risen a 4.7 percent annualized rate from a 4.6 percent rate in August. A much stronger than expected report might upset Wall Street that it would raise bets that the Fed can't keep cutting rates, but a much weaker report would raise worries about a recession. A report that was slightly weaker would probably help stocks the most, as it would reassure investors that the economy is holding up well, but that the Fed still has room to cut rates.

In corporate news, Sprint Nextel CEO Gary Forsee is reportedly feeling the pressure from activist investor Ralph Whitworth, according to a Wall Street Journal story. Shares rose nearly 3 percent on bets that this could mean the company may revamp its strategy or make other changes that could improve results.

Nutrisystem slumped 32 percent in unusually active Nasdaq trade after the company warned that third quarter earnings won't meet estimates.

In currency trading, the dollar gained versus the euro after the interest rate decision.

Oil prices reversed course, turning higher US light crude for November delivery rose $1.50 to settle at $81.44 a barrel on NYMEX.

COMEX gold for December delivery rose $8.10 at $743.80 an ounce.

Treasury prices inched higher, lowering the yield on the 10 year note to 4.51 percent from 4.56 percent late Wednesday.

The Nikkei closed 27.5 points at 17065 as Casio Computer Co tumbled after it cut its forecast and chip related stocks fell on worries about the industry outlook. Simplex Investments Advisors leaped on the Tokyo Exchange Mothers section for start ups after sources said Goldman Sachs planned to launch a takeover bid for the company. But KDDI Corp jumped after Goldman Sachs upgraded the stock.

UK stocks rose 12.7 points on Thursday to close at 6547.9 after the Bank of England kept interest rates on hold, while Northern Rock surged after people familiar with the situation said Citigroup had offered funding to potential buyers. The Bank of England kept borrowing costs steady at 5.75 percent, following the recent turmoil in global stock markets amid a credit crisis. But expectations of a cut later this year are growing. Banks led the advance as Northern Rock rose 12 percent, building on a 12 percent rise on Wednesday. The Times said at least four serious bidders remained in the auction of the bank, including JC Flowers and Cerberus.

Abbot Group rose 50 pence after the company said it had received proposals that could lead to a takeover offer. One of the proposals is said to be from 3i Group, but Abbot declined to comment on an FT report that 3i has made a bid approach of 375 pence a share, or £870m.

Yell Group added 1.5 percent after Citigroup upgraded its rating on the stock to "outperform" from "neutral". ABN AMRO however, cut its price target to 565 pence from 580 pence but maintained its "buy" rating.

ICAP fell 2.6 percent after the company said it expected annual underlying profit to be at the upper end of analysts forecasts, with recent market volatility helping to boost trading volumes.


Economics

US Non Farm payrolls (Sept) 13.30bst

Non farm payrolls are seen rising by 140,000 with private payrolls rising by 100,000. The unemployment rate could increase to 4.7 percent from 4.6 percent assuming an increase of 100,000 for the household measure of employment and no change in the labour force participation rate. Construction and manufacturing jobs have been falling for about a year, and since January, we have also seen job cuts in employment services and temporary help. Meanwhile, the latest Jobs Plentiful (25.7 from 27.5) and Jobs Hard to Get Indexes (22.1 from 19.7) rebound of 30,000 for local government education (total government +40,000 HSBC estimate), which has dropped by 102,000 in the past three months. This category can be volatile because of seasonal adjustment related to the school year. In addition, the state by state payroll data for August rose by a total of 159,000, much stronger than the nationally reported decline of 4,000. Weekly jobless claims have remained low, with the four week average dropping to just 311,500 in the latest reading.

US Consumer credit (Aug) 20.00bst

An increase of USD8bn is expected in consumer credit. Assuming a USD5bn in non revolving debt, given higher auto sales in August, along with a USD3bn rise in credit card debt.

 

The details published in this e-mail are intended for information only and should not be construed as advice under the Financial Services and Markets Act 2000. Aventus Capital Management will not accept responsibility for any actions taken (or not taken) on the basis of information published in this e-mail.

Aventus Capital Management is a trading style, "Aventus" is a trade mark and the Aventus logo is a registered trade mark of Rickerbys Solicitors. Rickerbys is regulated by the Solicitors Regulation Authority. Authorised and regulated by the Financial Services Authority. 

 

 


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