INTRADAY calls for 14th Oct 2009
BUY Relcapital-950 for 985-994+ with sl 934
BUY KotakBank-799 for 815-839+ with sl 788
BUY LITL-521 for 540-547+ with sl 510
BUY Indiainfo-150 for 162+ with sl 147
Positional
BUY Bankindia-410 for 424+ with sl 404
BUY Cromptgreav-339 for 355+ with sl 332
BUY Indhotel-79 for 105+ with sl 72
BUY Kirlosoil-120 for 140+ with sl 115
Strong & Weak futures
This is list of 10 strong futures:
DCHL, OFSS, IOB, Bajaj Auto, Lupin, Canara Bank, Sesa Goa, Titan, Indian Bank & LITL.
And this is list of 10 Weak futures:
Idea, RCom, Bharti Airtel, TV-18, Grasim, MTNL, Federal Bank, Suzlon, GVKPIL & HCL Tech.
Nifty is in Up trend
INVESTMENT BUY:
Buy SUNSHIELD CHEM (BSE Cash)
Bulls may hold on gains today.
1 Week: Bullish, as per current indications.
1 Month: Bullish, as per current indications.
3 Months: Bullish, as per current indications.
1 Year: Bullish, as per current indications.
Buy MOUNT SHIVALIK (BSE Cash)
Bulls may lose control today.
1 Week: Surprisingly going up, opposite to bearishness.
1 Month: Surprisingly going down, opposite to bullishness.
3 Months: Bearish, as per current indications.
1 Year: Surprisingly going up, opposite to bearishness.
NIFTY FUTURES (F & O):
Below 5031 level, expect profit booking up to 4977-4979 zone and thereafter slide may continue up to 4925-4927 zone by non-stop.
Hurdle at 5069 level. Above this level, rally may continue up to 5085 level by non-stop.
Cross above 5137-5139 zone, can take it up to 5188-5190 zone by non-stop. Supply expected at around this zone and have caution.
On Negative Side, rebound expected at around 4839-4841 zone on down side. Stop Loss at 4788-4790 zone.
Short-Term Investors:
Bullish Trend. 3 closes above 4790.00 level, it can zoom up to 5155.00 level by non-stop.
BSE SENSEX:
Lower opening expected. Recovery should continue.
Short-Term Investors:
Short-Term trend is Bullish and target at around 17671.82 level on upper side.
Maintain a Stop Loss at 16613.22 level for your long positions too.
SL Triggered.
Global Cues & Rupee
The Dow Jones Industrial Average closed at 9,871.06. Down by 14.74 points.
The Broader S&P 500 closed at 1,073.19. Down by 3.00 points.
The Nasdaq Composite Index closed at 2,139.89. Up by 0.75 points.
India's currency markets were closed on Tuesday for a holiday due to elections in Maharashtra.
Interesting findings on web:
The Dow retreats one day after ending at a 1-year record. Weak bank stocks and a mixed J&J profit report weigh on Wall Street.
Wall Street struggled Tuesday as weakness in the financial sector and disappointment about Johnson & Johnson's results halted the Dow's attempt to reclaim 10,000.
US stocks closed slightly lower after recovering an early knock from indifferent third quarter results from Johnson & Johnson.
Goldman Sachs Group and Johnson & Johnson weighed on the banking and health-care industries Tuesday, engaging in a tug-of-war with a rallying materials sector that helped stocks close only slightly lower.
The Dow fell 14.74, or 0.2 percent, to 9,871.06. On Monday, it came within 69 points of the psychological barrier of 10,000, a level not seen in a year.
The Standard & Poor's 500 index fell 3.00, or 0.3 percent, to 1,073.19, its first loss after six days of gains. The Nasdaq rose 0.75, or less than 0.1 percent, to 2,139.89.
RUSSELL611.7-2.11-0.34%
TRAN3892.42-14.28-0.37%
UTIL376.86-2.39-0.63%
S&P 100496.43-1.22-0.25%
S&P 400699.85-3.01-0.43%
NYSE7031.87-19.29-0.27%
NAS 1001730.270.64
After the close, Dow component Intel (INTC, Fortune 500) reported quarterly sales and earnings that topped estimates.
The chipmaker also issued a bullish forecast, saying that it expects fourth-quarter revenue of between $9.7 billion and $10.5 billion vs. the $9.51 billion consensus. Intel also said it expects gross margins, a key measure of profitability, in the 59% to 65% range versus the 56.7% consensus.
Stocks slipped at the start as traders braced for the first big wave of quarterly results this week.
Stocks briefly turned higher in the late morning, before heading lower again.
With more than $3 trillion sitting in money market accounts and few better options, investors are feeling increasingly compelled to put cash into equities, said Rob Lutts, chief investment officer at Cabot Money Management.
"The common thought is that the market has run ahead of a recovery and that a correction is going to happen, but the reality is that the money has to go somewhere," he said.
"We probably are ahead of the fundamentals, but that doesn't mean we can't keep going higher," he said.
The Dow has been moving closer to 10,000, a key psychological barrier that could give stocks another leg up, or trigger a selloff. The market last closed above 10,000 a year ago, on Oct. 3, 2008.
Cisco Systems (CSCO, Fortune 500) said it is buying Starent Networks (STAR) for $2.9 billion in cash. Starent makes gear that enables wireless carriers to tie their networks to the Internet.
Google director Arthur Levinson has resigned from the Internet search leader's board, averting a potential showdown with government regulators over his overlapping job as a director for computer and gadget maker Apple, according to USA Today.
The market could also get a lift from comments by CSX Corp. CEO Michael J. Ward, who said the worst of the recession "is likely behind us" as the major rail operator reported quarterly results after the bell.
"The market only makes sense at these levels if earnings can grow at a decent pace," said Jerry Webman, chief economist at OppenheimerFunds Inc. "What we're hearing now is OK, but you don't get long-term earnings growth out of cost cutting."
Linda Duessel, equity market strategist at Federated Investors, said stocks could drift after the strong rally. "I don't know if we have to pull back so much as take a break," she said.
Investors have sent stocks higher in recent days on hopes that third-quarter earnings reports will signal that the economy is improving.
Howard Ward, portfolio manager for GAMCO Growth Fund in Rye, N.Y., said investors are likely to lock in some profits following a rally that propelled the S&P 500 index up 58.6 percent since March and that future gains will be more modest.
"The market is going to be grinding its way higher from here," he said. "The fire sale is over."
"People are on the edge of their seats," said Ronald Knipping, managing principal at the wealth management division of Rehmann, a Michigan-based financial advisory firm.
"The leading indicator is going to be revenue growth, and right now there's none."
J&J boosted its 2009 earnings guidance to a range of $4.54 to $4.59 per share, versus an earlier range that topped out at $4.55 a share. Nonetheless, investors focused on the negative and shares fell 2.5%.
Other Dow gainers included Home Depot (HD, Fortune 500), Chevron (CVX, Fortune 500), DuPont (DD, Fortune 500) and Wal-Mart Stores (WMT, Fortune 500).
Goldman Sachs (GS, Fortune 500) slipped 1.5% after Merideth Whitney Advisors downgraded it to "neutral" from "buy."
That pressured a number of other financial shares, including Dow components Bank of America (BAC, Fortune 500), JPMorgan Chase (JPM, Fortune 500) and Travelers Companies (TRV, Fortune 500).
Big banks should do well in the coming quarters, helped by strong trading activity, banking analyst Dick Bove said on CNBC yesterday. But, he cautioned that regional banks will take a hit from commercial real estate.
Today, FDIC chair Sheila Bair said bank failures will continue at a pretty good clip but shouldn't involve any more bailouts from taxpayers.
Zions Bancorp (Nasdaq: ZION), a Utah lender that operates in 10 Western states, rose 6 percent to $18.02 for the biggest gain in the S&P 500. The lender was rated "Outperform" in new coverage by Sanford C. Bernstein & Co., which said the company represents "quality in the junk pile."
Bank of America said it will waive attorney-client privilege and hand over legal documents related to its controversial merger with Merrill Lynch. The company has been under pressure from regulators for months to provide more information on the purchase.
CIT Group (CIT, Fortune 500) tumbled 11.5% after the lender's CEO said he would resign by the end of the year.
Wells Fargo (NYSE: WFC) lost 0.7 percent.
Housebuilders did better with Lennar, Pulte andKB Home leading the sector higher.
Within the index, Dow components Pfizer, off 32 cents, or 1.9%, at $16.78, and Merck, down 44 cents, or 1.3%, at 32.42, were two of its weakest as the Senate Finance Committee's approval of a health-care-reform bill weighed on the sector. In addition, Johnson & Johnson fell 1.52, or 2.4%, to 61.01, after the pharmaceutical company's third-quarter revenue came in shy of Wall Street's expectations.
With gold and other metals once again finishing higher, several metals stocks finished higher on the session. Gold miner Newmont Mining was strong, up 1.20, or 2.6%, at 47.68, while United States Steel gained 1.40, or 3.3%, to 43.81.
Also in the materials sector, AK Steel Holding rose 80 cents, or 4.1%, to 20.19, after Goldman Sachs named the coal company as a potential takeover target in its broad analysis of the mergers-and-acquisitions market.
Supermarket shares slumped Tuesday as analysts hit the sector with ratings cuts and downward earnings estimates. Among the analyst moves, Pali cut Supervalu to "sell" from "neutral," sending shares down 61 cents, or 3.8%, to 15.46, and also lowered its estimates on Safeway, which fell 31 cents, or 1.5%, to 20.99.
Health care stocks stumbled after J&J's report and as the Senate Finance committee approved a version of the health care overhaul bill.
The three biggest drags on the Dow were: J&J, Pfizer and Travelers.
The top three gainers were: Home Depot, Wal-Mart and AT&T.
Among 10 key S&P sectors, energy was the biggest gainer, up 1.2 percent.
In other deal news, the Comcast [CMCSA 15.36 0.08 (+0.52%) ]-General Electric [GE 16.39 0.06 (+0.37%) ] deal being discussed by the companies apparently includes two potential dates in which GE could unwind its stake in NBC Universal, the parent of CNBC, according to Reuters. GE shares eked out a gain of 0.4 percent.
Energy stocks joined the downturn despite the fact crude rose to a price of $74.87, a gain of one percent on the session. So far in 2009, oil prices have gained 65 percent, giving energy related stocks a boost. However, the Oil Services HOLDRs (OIH) fell 0.64 percent Tuesday to a price of $123.12. However, this is more than double the low of $60.96 reached in the past 52-weeks on the OIH.
Retailers were among the Dow stocks seeing the best gains Tuesday. Shares of Home Depot (HD) and Wal-Mart (WMT) gained 1.81 percent and 1.47 percent respectively.
UnitedHealth Group Inc. (NYSE: UNH), the largest health insurer by sales, tumbled 3.7 percent to $24.29 and Aetna Inc. (NYSE: AET), the third-biggest, lost 3.3 percent to $25.54. The group of six medical insurers has gained 2.4 percent so far this year, compared with the S&P 500's 19 percent advance, amid uncertainty about what effects the legislation will have on earnings.
Life insurers had the two biggest declines in the S&P 500. Hartford Financial Services Group Inc. (NYSE: HIG) and Genworth Financial Inc. (NYSE: GNW) declined at least 6.2 percent. Credit Suisse Group AG (NYSE: CS) analyst Thomas Gallagher said following what will likely be "strong results" in the third quarter, the "book value recovery trade will be largely over for the life insurance sector."
The bank cut MetLife Inc. (NYSE: MET) and Ameriprise Financial Inc. (NYSE: AMP) to "Neutral" from "Outperform," sending shares of both down more than 2.7 percent.
Shares of Stec Inc fell more than 8 percent to $24.30 near the close with no news to explain the action. Its shares have been under pressure since Wedbush analyst Betsy Van Hees issued a cautious Sept. 17 research note on the stock, said WhatsTrading.com option strategist Frederic Ruffy.
Hees cut the price target on the stock to $39 from $45 but maintained an "outperform rating."
For whatever reason, the latest share price decline seems to have stirred up some bottom fishers, as about 28,000 calls and 15,000 puts have traded on the stock, he said. He noticed buyers of the Oct $25 and Nov $27 call strikes leading the flow. The stock's average implied volatility rose to 88 percent from about 83.5 percent the previous session.
S&P 500 - Risers
Zions Bancorporation (ZION) $18.05 +6.18%
Lennar Corp. Class A (LEN) $15.12 +5.44%
A K Steel Holdings Corp. (AKS) $20.18 +4.07%
ITT Corp. (ITT) $53.15 +3.34%
Akamai Technologies Inc. (AKAM) $20.79 +3.29%
S&P 500 - Fallers
CIT Group Inc. (CIT) $0.91 -12.50%
Hartford Fin Svc (HIG) $26.61 -6.73%
Genworth Financial (GNW) $11.04 -6.36%
Developers Diversified Reality (DDR) $9.35 -4.88%
MEMC Electronic Materials (WFR) $15.68 -4.62%
Dow Jones I.A - Risers
Wal-Mart Stores Inc. (WMT) $50.58 +1.96%
Home Depot Inc. (HD) $27.50 +1.70%
AT&T Inc. (T) $25.93 +1.29%
Intel Corp. (INTC) $20.59 +0.93%
United Technologies Corp. (UTX) $61.94 +0.76%
Dow Jones I.A - Fallers
Johnson & Johnson (JNJ) $60.92 -2.57%
Pfizer Inc. (PFE) $16.78 -1.87%
Travelers Company Inc. (TRV) $48.00 -1.70%
Merck & Co. Inc. (MRK) $32.42 -1.34%
Bank Of America Corp. (BAC) $17.79 -1.33%
Put volume popped up in discount broker Charles Schwab Corp ahead of its quarterly results expected on Thursday, suggesting some investors are taking a cautious stance. Its shares fell 1.5 percent to $18.98. Option volume was four times the average daily level with 20,000 puts and 4,027 calls traded. Directional sentiment based on order flow was 66 percent bearish, according to Trade Alert. The October $18 puts, which after today have three days of life remaining, have become the most popular and had volume of 10,314 contracts with 84 percent hitting ask-side, said WhatsTrading.com option strategist Frederic Ruffy. In that strike, the number of existing positions held by investors is 2,762, suggesting investors are buying to open positions. It also looked like opening buyers in the Oct and Nov $19 puts as well, he added. The option implied volatility moved up to 37.6 percent.
Dow component JPMorgan Chase (JPM, Fortune 500) reports results Wednesday morning. The financial company is expected to report a profit of 49 cents per share versus 11 cents a year ago.
Also Wednesday: reports are due on September retail sales, August business inventories and September import and export prices.
High unemployment, tight credit, vacant homes and idle factories point to a tepid U.S. economic recovery in which core measures of inflation are likely to slow further, the Federal Reserve's No. 2 official said on Tuesday.
"I don't think a V-shaped recovery is the most likely outcome this time around," Fed Vice Chairman Donald Kohn told the National Association for Business Economics.
VIX22.99-0.02-0.09%.
Oil,Gold & Currencies:
U.S. light crude oil for November delivery rose 88 cents to settle at $74.15 a barrel on the New York Mercantile Exchange.
COMEX gold for December delivery rose $7.50 to settle at $1,065 an ounce, a record close.
The dollar fell versus the euro and the yen.
The dollar traded near a 14-month low against the euro as signs the global economy is recovering spurred demand for higher-yielding assets.
The dollar may decline against the pound for a second day before a government report forecast to show U.S. consumer prices gained last month, curbing demand for safe-haven assets. The yen weakened against the greenback on speculation the Bank of Japan will keep interest rates unchanged today amid the nation's fragile economic outlook.
"Globally, things are improving," said Phil Burke, chief dealer for foreign-exchange spot trading at JPMorgan Securities in Sydney. "Risk will be supported, and the U.S. dollar will probably weaken."
The U.S. currency traded at $1.4846 per euro at 8:59 a.m. in Tokyo from $1.4854 in New York yesterday, when it reached $1.4876, the weakest level since Aug. 22, 2008. The yen was at 133.37 per euro from 133.26. The yen fell to 89.84 per dollar from 89.71. The dollar was at $1.5937 per pound from $1.5925.
The dollar may weaken as economists in a Bloomberg News survey forecast U.S. consumer prices rose 0.2 percent in September following a 0.4 percent gain in August. The Labor Department is set to release the data tomorrow.
Japan's central bank will leave its benchmark interest rate at 0.1 percent today, according to all 20 economists surveyed by Bloomberg News. The nation's producer prices fell for a ninth month in September as oil traded lower than last year's levels and demand for materials waned, the Bank of Japan said today.
The costs companies pay for energy and unfinished goods declined 7.9 percent in September from a year earlier after sliding a record 8.5 percent in August. The median estimate of 27 economists surveyed by Bloomberg News was for a 7.9 percent drop.
Bank of Japan
"The central bank won't be able to raise rates anytime soon as deflation concerns linger," said Toshiya Yamauchi, a Tokyo-based manager of the foreign-exchange margin trading department at Ueda Harlow Ltd. "This makes it easy for the yen to be sold as a funding currency."
Japan's consumer prices excluding fresh food slid 2.4 percent in August from a year earlier, topping July's 2.2 percent decline, the statistics bureau said on Sept. 29. The drop was the sharpest since the survey began in 1971.
Federal Reserve Vice Chairman Donald Kohn said yesterday that inflation and growth will probably stay below the central bank's objectives for some time, warranting very low interest rates for an "extended period." The bank is scheduled to release the minutes of its Sept. 23 meeting today in Washington.
The Dollar Index, which IntercontinentalExchange Inc. uses to track the greenback against the currencies of six major U.S. trading partners, dropped 0.1 percent to 75.877.
Bonds:
Treasury prices rallied, lowering the yield on the 10-year note to 3.32% from 3.30% late Friday, as bond markets were closed Monday for Columbus Day. Treasury prices and yields move in opposite directions.
What to expect:
WEDNESDAY: Allen Stanford court appearance; Weekly mortgage applications; government's report on retail sales; import/export prices; business inventories; Fed minutes; Earnings from Abbott Labs and JPMorgan
THURSDAY: IRS amnesty for offshore accounts ends; CPI; Empire State manufacturing; weekly jobless claims; Philly Fed; weekly crude inventories; Earnings from Citigroup, Goldman Sachs, Nokia, IBM and AMD
FRIDAY: Industrial production; consumer sentiment; Fed's Fisher speaks; Earnings from Bank of America, GE, Halliburton and Mattel
Wednesday Look Ahead: Will Intel, JP Morgan Take Dow to 10,000?
Intel's earnings beat should help stocks Wednesday but focus will quickly shift to J.P. Morgan's report, ahead of the opening bell.
"One down, a bunch more to go," said Tim Smalls of Execution LLC. Intel's strong after the bell earnings, and an upgraded fourth quarter revenue forecast, propelled it and other tech stocks higher in after hours trading.
J.P. Morgan is the first big financial to report and is seen as a bellwether for the recovering banking industry. It is viewed as the strongest of the banks and is a read on both the health of the broader financial industry and economy. J.P. Morgan is expected to earn $0.52 per share. Rivals Citigroup and Goldman Sachs report earnings Thursday.
If stocks find a reason to rally, the Dow is within easy reach of the psychologically important 10,000 level.
Financial stocks were under pressure Tuesday, losing 1.1 percent after influential analyst Meredith Whitney downgraded Goldman Sachs to neutral and said take profits in the banking group ahead of earnings. For most of the day, the stock market traded sideways as the dollar weakened, and gold hit a new high.
The Dow finished at 9871, off 14, and the S&P 500 was off 3 at 1073. Gold rose $7.50 per troy ounce, to a Comex closing high of $1064.20. The dollar continued to slip, losing 0.3 percent against the euro to $1.4829. Treasurys, meanwhile, found buyers along the curve, pushing the 10-year's yield lower to 3.314 percent.
Intel reported profits of $1.9 billion or $0.33 per share, well above the $0.28 per share expected by analysts. Intel also raised its fourth quarter revenue forecast to $10.1 billion, above the $9.5 billion expected by analysts.
Ahead of its report, Intel earnings were the talk of the market, including whispers about how much improved its closely watched margins might be. The company reported gross margins of nearly 58 percent, above analysts expectations in the low 50s but just slightly shy of the 60 percent whisper number.
Intel [INTC 20.49 0.09 (+0.44%) ] said it saw a strengthening pc market during the third quarter. Its comments on the economy were cautious but positive. Intel CEO Paul Otellini said in a release that the company's strong results "underscore that computing is essential to people's lives, proving the importance of technology innovation in leading an economic recovery."
Whether it leads a recovery or not, Intel's news was leading a tech rally in the after hours trading.
Rail company CSX[CSX 44.29 -0.62 (-1.38%) ], meanwhile, also reported after hours. Its profit of $293 million, on revenues of $2.3 billion, was better than expected. The company noted in its comment that "the worst of recession is behind us." CSX shares jumped 3 percent.
Other companies reporting Wednesday are Abbott Labs[ABT 49.69 -0.31 (-0.62%) ], WW Grainger[GWW 94.29 1.15 (+1.23%) ] and Host Hotels[OSH 6.7 0.01 (+0.15%) ], before the bell. Crown Holdings[CCK 28.75 -0.10 (-0.35%) ] and Xilinx[XLNX 23.93 0.24 (+1.01%) ] report after the bell.
Econorama
September retail sales are reported at 8:30 a.m. and are expected to be down 2 percent. The numbers are expected to look weaker than August because of the boost to auto sales earlier in the summer from the "cash for clunkers" program. Without autos, the number is expected to be 0.3 percent et higher.
"I don't think anybody's expecting anything really good," said Smalls. "I'm of the mindset that as long as it's not a disaster, it's ok."
Import prices are also reported at 8:30 a.m. and business inventories are expected at 10 a.m. The minutes from the Fed's last meeting are released at 2 p.m.
At 2:30 p.m., Fed Gov. Daniel Tarullo testifies on the state of banking before a Senate Banking subcommittee.
Jefferies Treasury Strategist John Spinello said comments on the state of the economy from Fed Vice Chairman Donald Kohn sent buyers into bonds Monday. While Kohn didn't appear to say anthing new, his tone seemed to rattle traders who saw less chance the Fed would raise rates soon.
Kohn said the jobs situation remains weak, and that is likely to weigh on the consumer. That comment followed on comments from St. Louis Fed President James Bullard that were also viewed as dovish.
Spinello said Treasurys were also rebounding after last week's sell off. "I think earnings will probably be pretty important, but there's not a real connect. I think if the stock market went down a lot it would probably favor bonds," he said, adding though its more likely stocks continue higher. "If it goes up, it wouldn't shock many people."
Traders will also be gaming the Senate health care bill, which was passed on by the Senate Finance Committee Tuesday afternoon. Insurance stocks, like United Health Care and Aetna, were lower on the news.
Intel's Earnings: Tech-tacular! Shares Leap
Intel reported profit and revenue that both substantially outpaced expectations Tuesday as the company's shares were halted in late trading.
Intel said after markets closed Tuesday that it earned 35 cents a share on revenue of $9.39 billion in the third quarter.
In the same quarter last year, Intel earned 35 cents a share on a topline of $10.217 billion.
Analysts who follow Intel had forecast earnings of 28 cents a share on sales of $9.037 billion, according to a consensus estimate from Thomson Reuters.
The world's biggest maker of microprocessors also forecast fourth-quarter sales of $10.1 billion, give or take $400 million. It put its fourth-quarter gross margin at 62 percent, plus or minus 3 percentage points.
Analysts polled by Thomson Reuters I/B/E/S, on average, expect fourth-quarter revenue of 9.5 billion and a gross margin of 56.86 percent.
After initially being halted in extended hours Intel shares jumped about 5 percent late Tuesday. Get the latest quotes for Intel here.
The stock rose 0.44 percent higher to $20.49 [INTC 20.49 0.09 (+0.44%) ] during the regular Nasdaq session.
"You're starting to see signs of a recovery. You have the consumer side helping Intel. Looking into next year, Intel should have multiple traction from consumer, corporate spending, enterprise spending return, server refresh, you have Windows 7 and margins is the key to the story," Vijay Rakesh, an analyst at ThinkEquity, told CNBC. "Gross margins have rebounded and will continue to improve in the future."
Intel's results are generally seen as an important measurement of PC industry health, and in turn a sign of the trend in technology spending as a whole.
As the first major technology company to report calendar-year third-quarter earnings, Intel's results are closely watched for clues about technology demand among consumers and businesses. Intel's customers include the world's biggest PC and computer server makers.
Chipmakers like Intel have suffered in the global downturn as corporations have slashed IT spending and demand for electronics has collapsed, forcing companies to dial back production and lay off workers.
But there are signs of a sector-wide recovery. Despite lagging their year-ago figures, global chip sales posted their sixth consecutive monthly increase in August, according to the Semiconductor Industry Association. Analysts say September chip sales likely rose more than 6 percent from August on anticipated holiday demand, as well as chip orders ahead of the upcoming release of Microsoft's Windows 7 operating system.
Stock in arch-rival Advanced Micro Devices rose 5.4 percent after hours.
Several chip makers have raised current-quarter forecasts. Intel Chief Executive Paul Otellini said in September he thought personal computer sales would be flat to slightly up from a year ago—a signal end-demand was strengthening.
Health-Care Reform Clears One Hurdle, But Many More Remain
The Senate Finance Committee Tuesday passed a bill to reform the US healthcare system, President Barack Obama's main domestic objective.
Health Sector Winners, Losers in US Reform Bill
The U.S. Senate Finance Committee Tuesday approved its version of legislation to overhaul the nation's $2.5 trillion health care system.
Following are some of the health industry winners and losers based on the Senate committee's bill.
WINNERS
Drugmakers:
The pharmaceutical industry kept intact an $80 billion rebate agreement with Finance Committee chairman Max Baucus and the White House.
The industry successfully fended off a challenge that would have called on Pfizer, GlaxoSmithKline, Merck.
Inc and others others to give back $106 billion over 10 years in additional drug rebates under the Medicare insurance program for the elderly and disabled.
Hospitals:
Hospitals kept a $155 billion, 10-year deal with Baucus and the White House to accept lower government payments from the Medicare and Medicaid health insurance programs in exchange for what the industry hopes will be an increase in insured customers.
Analysts do not expect the deal to change much even as the bill is meshed with other proposals.
Health Care Companies
pfe16.80-0.30-1.75%64,198,463gsk39.67-0.11-0.28%2,137,739mrk32.45-0.41-1.25%19,673,064mhs55.53-0.13-0.23%2,391,621esrx81.040.12+0.15%1,549,689cvs36.740.34+0.93%9,869,739syk45.39-0.01-0.02%1,019,266mdt37.000.07+0.19%7,700,408bsx9.93-0.07-0.7%13,820,387lh66.39-0.71-1.06%806,503dgx54.29-0.32-0.59%895,471hum37.67-0.43-1.13%3,947,793ci28.72-0.92-3.1%4,314,561unh24.29-0.94-3.73%18,921,241aet25.56-0.86-3.26%9,306,688thc5.92-0.07-1.17%5,566,414uhs65.30-0.32-0.49%369,168
Hospitals, which include companies such as Universal Health Services and Tenet Healthcare were also exempted from any decisions made by an independent Medicare Commission that would set reimbursement rates and make other changes to the program.
Laboratory Testing Companies:
Laboratory companies were happy to see the committee's final bill drop a $750 million annual fee that had been included in Baucus's original proposal.
The fee would have hurt companies such as Quest Diagnostics Inc and Laboratory Corporation of America Holdings.
LOSERS
Health Insurers
The insurance industry can claim a partial victory because it lobbied to defeat amendments that would have introduced a new government-run health insurance program.
But the industry, which includes Aetna, UnitedHealth Group, Cigna and Humana , still faces more than $6 billion a year in fees.
What's Actually in Senate Health Care Bill
The U.S. healthcare overhaul passed by the Senate Finance Committee Tuesday has a price tag of $829 billion and calls for major insurance market reforms and payment system changes, as well as requirements for most citizens and legal residents to buy insurance. Here are the details of the bill.
Insurance Market Reforms
— Creates separate state-based exchanges for individuals and small businesses, with up to 50 employees, to shop for insurance.
—Four categories of minimum benefits would be offered.
—A policy offering catastrophic coverage for young adults, a "young invincible" plan, would be offered.
—Starting July 1, 2013, insurance companies would no longer be able to exclude people from coverage based on pre-existing conditions. Limited-benefit plans and lifetime limits on coverage would be barred. Insurers would be prohibited from rescinding health coverage.
— States could form regional exchanges.
— Beginning in 2015, states must open the business exchange to firms with up to 100 employees and may allow even larger businesses into the exchange beginning in 2017.
—Stand-alone dental plans can be offered through the exchanges.
Health Cooperatives, State Flexibility
—The proposal does not contain a government health plan, which is backed by Obama and liberal Democrats but opposed by Republicans and health insurers.
—The proposal provides for the creation of nonprofit "consumer operated and oriented" plans or cooperatives.
—The cooperatives would compete with private insurers in the individual and small-group insurance markets.
—States may establish a federally funded health plan for people earning from 133 percent to 200 percent of poverty-line income.
—States could "opt out" of some requirements if they meet coverage requirements by other means.
Mandates and Affordability Measures
— Beginning in 2013, most U.S. citizens and legal residents would be required to obtain health coverage.
—Provides a sliding scale of tax subsidies for people with incomes up to 400 percent of poverty to help buy insurance.
— Limits deductibles and out-of-pocket expenses. Limits put on a sliding scale based on incomes.
—Exemption allowed for those who cannot afford coverage if costs exceed 8 percent of income.
—Penalties for failure to purchase insurance would be phased in starting with $200 per adult in 2014. By 2017, the penalty would be $750 per adult.
—Medicaid, the healthcare program for the poor, expanded to qualify everyone up to 133 percent of poverty-line income.
—Employers not required to offer health insurance but firms with 50 or more full-time workers would pay a fee for employees who get subsidized exchange policies.
—No fee for workers enrolled in Medicaid.
—Tax credits provided for small businesses that help purchase health policies for employees.
Revenue-Raising Fees and Taxes
—An excise tax of 40 percent would be levied on insurance companies for health plans above $8,000 for singles and $21,000 for families. The tax applies to self-insured and group-market plans but not to plans sold in the individual market. Threshold indexed for inflation plus 1 percent.
—Insurance policies for retired people aged 55 and higher who are not eligible for Medicare and for workers in high-risk professions have a higher threshold of $9,850 for singles and $26,000 for family coverage.
—Health insurance providers collectively would pay an annual fee of $6.7 billion starting in 2010. The fee would be allocated by companies' market share.
—Pharmaceutical companies collectively would pay an annual fee of $2.3 billion, allocated by market share.
—Medical device makers collectively would pay an annual fee of $4 billion, allocated by market share. Some items sold at retail for less than $100 would be exempted from the fee calculation.
CSX Beats Wall Street Expectations; Shares Rise
CSX reported quarterly earnings on Tuesday that topped Wall Street expectations, sending its shares higher after the bell.
Pay Czar to AIG: Cut Your Retention Bonuses
The U.S. Treasury Department is pushing American International Group to cut big pay incentives it claims were needed to keep staff but which have stoked a controversy over pay at taxpayer-supported firms.
Asia:
Asian stocks rose after a better- than-estimated sales forecast at Intel Corp. boosted technology shares, offsetting a decline among financial companies.
Samsung Electronics Co., Asia's biggest maker of chips, gained 1.6 percent after Intel's forecast, which followed the close of U.S. trading. JB Hi-Fi Ltd. rose 2.7 percent, leading Australian retail shares higher, after the company reaffirmed its revenue outlook and a consumer-confidence index jumped. Mitsubishi UFJ Financial Group Inc. sank 3.2 percent, leading declines by Japanese financial shares after Meredith Whitney said she was "far less bullish" on banks.
"The Intel result has been very encouraging," said Nader Naeimi, a Sydney-based strategist at AMP Capital Investors, which manages about $75 billion. "Earnings are picking up, but people are waiting to see even more tangible evidence."
The MSCI Asia Pacific Index added 0.4 percent to 119.42 at 11:07 a.m. in Tokyo, with about three stocks advancing for every three that retreated. The gauge has climbed 68 percent from a five-year low on March 9 as Japan exited recession and growth accelerated in countries from China to Indonesia. The average price that companies in the index trade at has risen to 23 times estimated earnings from 14.3 times at the start of 2009.
Japan's Nikkei 225 Stock Average lost 0.3 percent to 10,051.13 as producer prices fell for a ninth month. South Korea's Kospi Index rose 1.2 percent, Australia's S&P/ASX 200 Index gained 0.7 percent and New Zealand's NZX 50 Index advanced 0.6 percent.
Computer Demand
Futures on the U.S. Standard & Poor's 500 Index climbed 0.9 percent today as Intel's forecast indicated computer demand is picking up. The S&P 500 slipped 0.3 percent yesterday, as revenue from Johnson & Johnson, the world's largest health- products company, missed analysts' estimates.
Samsung Electronics gained 1.5 percent to 768,000 won. Hynix Semiconductor Inc. rose 1.9 percent to 21,000 won.
Intel, the world's biggest chipmaker, said after the close of U.S. trading that fourth-quarter sales will likely be $9.7 billion to $10.5 billion, compared with the $9.5 billion average estimate in a Bloomberg survey. Gross margin, the percentage of sales remaining after the costs of production, was 58 percent in the third quarter, the company said, compared with its prediction of about 53 percent. The shares jumped 4.3 percent in after-hours trading.
JB Hi-Fi added 2.7 percent to A$19. Woolworths Ltd. rose 1.6 percent to A$29.30. An index of Australian consumer sentiment gained 1.7 percent to 121.4 points in October, according to a Westpac Banking Corp. and Melbourne Institute survey, suggesting the central bank's unexpected decision last week to boost interest rates won't erode household spending.
Financials Decline
Mitsubishi UFJ sank 3.4 percent to 484 yen, the biggest single drag on the MSCI Asia Pacific Index. A gauge of financial shares in the measure lost 0.5 percent. The sub-index has been the second-best performer of 10 industry groups in the past six months as concerns eased about more credit-related losses.
"The market is going to struggle to gain ground as investors look to lock in recent gains on financials," said Hiroichi Nishi, an equities manager at Nikko Cordial Securities Inc. in Tokyo.
Whitney, who left Oppenheimer & Co. this year to create her own firm, yesterday cut her rating on Goldman Sachs Group Inc. and recommended investors "lock in profits." The analyst predicted in October 2007 that Citigroup Inc. would have to cut its dividend, which the bank did in January 2008.
Japan's producer prices fell for a ninth month as oil traded lower than last year's levels and demand for materials waned. The costs companies pay for energy and unfinished goods declined 7.9 percent in September from a year earlier after sliding a record 8.5 percent, the Bank of Japan said today in Tokyo. The median estimate of 27 economists surveyed by Bloomberg News was for a 7.9 percent drop.
Nikkei 225 10,051.13 -25.43 ( - 0.25%).(08.29 AM IST)
Japan's Nikkei average lost 0.3 percent on Wednesday, dented by a slide in bank shares such as Mizuho Financial Group (8411.T) after their U.S. peers fell ahead of earnings reports from several major banks this week.
The benchmark Nikkei .N225 fell 25.43 points to 10,051.13, while the broader Topix slipped 1 percent to 892.21.
HSI 21688.85 +221.49 +1.03%. (08.32 AM IST)
Hong Kong shares advanced early Wednesday, shrugging off a weak finish for U.S. stocks overnight, as energy producers Cnooc /quotes/comstock/22h!e:883 (HK:883 11.72, +0.22, +1.91%) /quotes/comstock/13*!ceo/quotes/nls/ceo (CEO 148.65, +3.66, +2.52%) and PetroChina Co. /quotes/comstock/22h!e:857 (HK:857 9.80, +0.33, +3.48%) /quotes/comstock/13*!ptr/quotes/nls/ptr (PTR 122.67, +2.24, +1.86%) climbed on higher energy prices. The Hang Seng Index rose 1.1% to 21,701.55, while the Hang Seng China Enterprises Index added 1.2%, aided by an advance for mainland Chinese shares. The Shanghai Composite was recently up 1% at 2,964.85, also helped by energy stocks.
Chinese stocks open 0.32% higher on Wed
Chinese stocks opened higher on Wednesday morning, tracking gains from the previous closing.
The benchmark Shanghai Composite Index, which covers both A shares and B shares on the Shanghai Stock Exchange, opened at 2,945.67 points, up 0.32% or 9.48 points from the previous closing.
The Shenzhen Component Index on the smaller Shenzhen Stock Exchange opened 0.34% or 39.87 points higher at 11,914.77 points.
China mulls lowering steel makers' taxes (14 Oct)
Hang Seng Index opens 96 points higher on Wed (14 Oct)
Shell, Shaanxi Yanchang to open 100 gas stations in NW China's Shaanxi (14 Oct)
Bank of Ningbo to raise RMB 5 bln via private placement (14 Oct)
The Capital Group cuts shareholding in Weichai Power to 11.61% (14 Oct)
VW's China sales up 37% in Jan-Sep (14 Oct)
Flextronics Int'l to recruit staff in mainland China (14 Oct)
Chinese stocks open 0.32% higher on Wed (14 Oct)
Li Ka-shing raises stake in Cheung Kong to 40.43% (14 Oct)
Rusal hires BOC Int'l, VTB Capital to handle HK IPO (14 Oct)
Changan Auto forecasts 150% growth in net profit for Jan-Sep (14 Oct)
China's investment in west region to reach RMB 468 bln in 2009 (14 Oct)
China International Travel Service to list in Shanghai on Thu (14 Oct)
Hunan Valin Steel to issue 365-day bills on Fri (14 Oct)
China Futures Exchange Center may be set up in Beijing (14 Oct)
CDB may buy Stockfly Securities: report (14 Oct)
China's imports, exports drop 10.1% in September
China's foreign trade continued to fall in September, but the rate of decline slowed sharply, the General Administration of Customs announced Wednesday.
The total value of imports and exports for September was 218.94 billion U.S. dollars, down 10.1 percent from the same month last year.
In August, the drop was 20.6 percent compared with the same month last year.
Russia, China work on gigantic oil, gas co-op project
Bloomberg to buy 80-year-old BusinessWeek
U.S. to strengthen trade relations with India
China to Curb Steel Production to Reduce Oversupply
China, the world's largest steel producer, is working on plans to curb excess capacity as the nation faces "severe oversupply," according to the nation's third-largest mill.
The government may have detailed plans on how to close obsolete mills, advance mergers and reduce the number of iron ore importers by the end of the year, Deng Qilin, the general manager of Wuhan Iron & Steel Group, said in an interview.
Steel prices in China have dropped 23 percent since reaching a 10-month high on Aug. 4, as overproduction offset rising demand created by government stimulus spending. Some steelmakers have incurred losses at current prices, Deng said.
"The government will impose strict measures to effectively close outdated mills and boost consolidation," Deng, also the chairman of the China Iron and Steel Association, said while attending the World Steel Association annual meeting in Beijing yesterday. "We bigger players will surely benefit from such a move."
Wuhan Iron & Steel Co., the Shanghai-listed unit of Wuhan Group, rose 2.4 percent to 7.55 yuan at 10:49 a.m. local time, taking the year's advance to 57 percent.
Chinese steel prices probably won't rebound for the rest of the year, Deng said. Hubei province-based Wuhan Steel may carry out annual maintenance which will reduce output, he said, declining to give details.
Record Output
Steel output in China reached a record this year as the government invests 4 trillion yuan ($586 billion) in the economy, spurring public works building. The nation's cabinet in August said it was studying curbs on overcapacity in industries including steel.
Demand may expand by 19 percent this year to 526 million metric tons, the World Steel Association predicted this week. Growth may slow to 5 percent next year, it said.
Mills in China may have the capacity to produce 700 million tons of steel a year now, Deng said. The overcapacity is affecting Wuhan Steel's expansion plans, he said.
The National Development and Reform Commission, China's top planning agency, is unlikely to approve a feasibility report on Wuhan Steel's planned 10 million-ton steel plant this year, Deng said. Without the approval, Wuhan can't start construction at the project at Fangcheng Port in the southwestern province of Guangxi, he said.
Premier Wen
"Premier Wen Jiabao has said to build the plant at an appropriate time," Deng said. "We will get the approval eventually, but not now. We have the patience and we can wait because the new mill, aiming at high-end products, would make us stronger."
Chinese steelmakers are facing rising import competition, with Japanese manufacturers "dumping" products in the country, Deng said. Japan is the world's biggest exporter this year, while China ranks only sixth and has turned into a net importer, he said.
Steel exports to the U.S. and Europe plunged as much as 85 percent in the first eight months, the steel association said Oct. 12. The U.S. and European Union are slapping duties on Chinese imports after their producers claimed Chinese rivals benefited from unfair subsidies.
Wuhan Steel and Baoshan Steel Group, China's biggest mill, have asked the nation's commerce ministry to investigate imports of grain-oriented flat-rolled electrical steel from the U.S. and Russia, the ministry said June 1.
Price data show why BOJ unlikely to hike soon
Japanese wholesale prices fell 7.9% in September from the same month a year earlier, Bank of Japan data showed Wednesday. The pace of decline in the corporate goods price index moderated from August's record 8.5% drop. The wholesale price index was nearly flat in September from the previous month, rising by 0.1%. The fact that pressure remains on prices adds more evidence to the widely-held belief that the Bank of Japan will not change its interest rate policy anytime soon. However, at its two-day meeting which ends Wednesday, the BOJ policy board might may decide to discontinue its special liquidity-boosting steps to buy corporate bonds and commercial paper outright, as funding conditions have improved.
Recovery to be moderate, not V-shaped: Kohn
The economy recovery will be moderate and not a quick snapback commonly referred to as a V-shaped growth path, Donald Kohn, the vice-chairman of the Federal Reserve Board, said Tuesday.
"All told, I expect that the recovery in U.S. economic activity will proceed at a moderate pace in the second half of this year before strengthening some in 2010," Kohn remarked in a speech at the National Association of Business Economics meeting in St. Louis.
Difficult labor-market conditions are a key factor in his expectation that activity will be retrained going into 2010, he said. In addition, the financial headwinds holding back growth are likely to abate slowly.
The sluggish growth rate means the risk of further declines in the underlying rate of inflation are greater than the risk of increases, Kohn commented, justifying the Fed's decision to maintain rates at historic low levels.
The economic team at Goldman Sachs interpreted Kohn's remarks as a signal that rates would remain at historic lows."The implication is that Fed policy is on hold for quite a while, though of course there are the usual caveats about uncertainty and an assurance that the Fed has both the tools and the will to fight inflation if and when prospects point in that direction," the Goldman economists wrote to clients.
At its meeting in late September, the Federal Open Market Committee repeated that economic conditions are likely to warrant unusually low levels of interest rates for an extended period.
"I expect that the persistence of economic slack, accompanied by stable longer-term inflation expectations, will keep inflation subdued for some time," Kohn said.
The public's expectations of inflation are more likely to fall than rise in the current environment, he added.
Some Fed officials, known for being more "hawkish" about inflation, have questioned aspects of this notion of "slack," saying that it is hard to measure and that some production might have been destroyed in the recession.
Kohn pushed back, saying that in his view "the cumulative reduction in aggregate demand has been much greater than any possible cutback in potential supply."
But Kohn vowed not to take his eye off the ball. "This assessment and my outlook do not mean that my colleagues and I will not be looking carefully at any evidence that portends a potential pickup of inflation."
The Fed is prepared to act well before demand pressures or inflation expectations threaten price stability, he said.
INVESTMENT VIEW
Tata Motors-The DVR Shares Allow A Cheaper Entry Into the Stock...BUY
BSE 570001; CMP Rs 426.70
Tata Motors was the first company to issue shares with DVR's in India. It had come out with rights issue of Rs. 4,147 crores to repay part of the short term bridge loan availed by its subsidiary for financing the acquisition of Jaguar-Land Rover from Ford.
These DVR shares carry 1/10th of voting right of ordinary shares ( i.e. DVR shares to have only one voting right for every 10 shares held) and entitle the shareholder of 5 percentage higher dividend as compared to ordinary shares.
The DVR issue was done by the company at a price of Rs. 305 about 10% less than the issue price of ordinary rights at Rs.340. Trading in DVR commenced on November 5, 2008 on both the exchanges.
The price differential between DVR and ordinary shares has fluctuated from a premium of Rs.90.00 to a discount of Rs.150.00 (30% premium to 32% Discount).
The DVR's initiated with trading at premium and eventually started trading at discount with in a month. Currently Tata Motors DVR's are quoting at Rs. 426.70 and Tata Motors ordinary shares are quoting at Rs. 550.25, signifying a discount of Rs.123.55 w.r.t. ordinary shares.
The discount of Tata Motors DVR's as compared to the ordinary shares is steep and has a probable chance of it narrowing down.
The current price differential can offer a trading opportunity on the spread and one can initiate arbitrage opportunity arising out of the significant discount.
(Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.)
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Arvind Parekh
+ 91 98432 32381
