Friday, November 10, 2006

Stocks Drift as Oil Prices Drop

News Article
November 10, 2006

BusinessWeek Logo

Stocks Drift as Oil Prices Drop

Crude futures fell after the International Energy Agency slashed its demand projection. Also in focus: Disney earnings, a Boeing contract win

Major stock indexes were mixed in slow trading late Friday afternoon, amid a pullback in oil prices and earnings news from Disney (DIS). Investors were considering the effects of Democratic control of Congress, as former Treasury Secretary Robert Rubin called for higher taxes, says Standard & Poor's Equity Research.

In afternoon trading, the Dow Jones industrial average slipped 10.8 points, or 0.09%, to 12,092.5. The broader Standard & Poor's 500 index nudged higher 0.07 points, or 0.01%, to 1,378.4. The tech-heavy Nasdaq composite rose 7.88 points, or 0.33%, to 2,383.89.

Oil prices retreated Friday following the previous session's gains. In the energy markets, December West Texas Intermediate crude futures fell $1.58 cents to $59.58 a barrel after the International Energy Agency cut its projection for world oil demand this year by 80,000 barrels a day.

Market players were also eyeing mixed earnings news. Dow component Disney reported an 89% jump in profit for its fiscal fourth quarter, topping Street forecasts. However, shares fell as analysts expressed concerns about the sustainability of earnings growth.

Insurer American International Group (AIG) was higher after the company said its third-quarter earnings more than doubled, beating analyst estimates.

Shares of Nvidia (NVDA) dipped even after the graphics chipmaker's third-quarter revenue and earnings results trumped analyst expectations.

Bausch & Lomb (BOL) was lower after the eye-care products maker said third-quarter profits likely fell because of a recall of a tainted contact-lens solution.

Elsewhere, Boeing (BA) was higher after the aerospace company won a U.S. Air Force contract potentially worth $13 billion for search and rescue combat helicopters.

Intel (INTC) was higher after the chipmaker said it plans to spend $1 billion on a chip assembly and testing plant it is building in Vietnam, more than tripling its initial investment of $300 million.

Wal-Mart (WMT) edged higher after the retail giant cut prices on appliances, following recent price reductions on electronics and toys.

In deal news, drug maker Genentech (DNA) agreed to acquire biotechnology outfit Tanox (TNOX) for $919 million.

Auto services marketer Autobytel (ABTL) said it reached a marketing agreement with Time Warner's (TWX) AOL Autos. Autobytel also said it is considering strategic alternatives for two units.

The economic calendar is relatively quiet until next week, with Federal Reserve Chairman Ben Bernanke avoiding policy remarks in a speech this morning in Frankfurt. The October Treasury budget will be on tap Monday.

European markets finished modestly lower. In London, the FTSE-100 index fell 23.1 points, or 0.37%, to 6,208.4. Germany's DAX index slipped 1.1 points, or 0.02%, to 6,357.77. In Paris, the CAC 40 index edged down 1.1 points, or 0.02%, to 5,447.5.

Asian markets ended lower. In Japan, the Nikkei 225 index lost 86.14 points, or 0.53%, to 16,112.43. In Hong Kong, the Hang Seng index dipped 61.72 points, or 0.33%, to 18,891.14. Korea's Kospi index declined 3.71 points, or 0.27%, to 1,395.73.

Treasury Market
Treasury yields dipped amid a light session for economic data. The 10-year note rose in price to 100-11/32 for a yield of 4.58%, while the 30-year bond advanced to 96-31/32 for a yield of 4.69%.

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