Wall St: Thursday mid-session

By THIS IS MONEY
Updated:

 

TECHNOLOGY stocks rose and blue-chip shares recovered most of their early losses as investors welcomed upbeat economic news and focused on corporations delivering strong profit forecasts.

The Nasdaq Composite Index was up 9 points, or 0.47% at 1,948 and the Dow Jones industrial average was down 6 points, or 0.06% at 9,797.

Computer giant IBM matched Wall Street's earnings view for the third quarter, but missed revenue expectations.

Mobile phones maker Nokia forecast lower earnings in the fourth quarter, flat mobile phone sales, and continued pressure on handset prices due to competition.

Reports Altria, United Technologies, and Coca-Cola come in ahead of views, Honeywell met expectations, and Caterpillar fell short.

Industrial conglomerate Honeywell was the Dow's best-performing stock, after reporting lower quarterly earnings but satisfying investors by backing its fourth-quarter earnings forecast.

The company reported third-quarter net income of $344m, or 40 cents a share, down from 50 cents a share in the year-earlier period, due primarily to higher pension expenses. Net sales rose 3.6% to $5.77bn, helped by favourable foreign currency movements. The shares rose 96 cents or 3.3% to $30.10.

Altria, the company behind Marlboro, Kraft Foods, Nabisco and Maxwell House coffee, reported third quarter earnings of $1.22 per share, just ahead of expectations but below the EPS of $2.06 for the same period a year ago. The decrease in net earnings of almost 43%, or $2.5bn, was due primarily to the after-tax impact of the Miller Brewing transaction of $1.7bn or 81 cents per share. The company reaffirmed its earnings outlook for 2003 of $4.50-4.60 per share. The shares fell 3 cents to $44.85.

United Technologies rose $1.21 to 84.91. It said third quarter 2003 net income rose 4% to $639m, and earnings per share rose 5% to $1.27 over the year-ago period. Consolidated revenues rose 9% to $8bn, primarily due to the acquisition of Chubb.

Coca-Cola said it had third quarter earnings of $1.223bn, or 50 cents a share, against $1.091bn, or 44 cents a share a year ago, buoyed by strong international sales, notably in Europe. Excluding charges related to streamlining of operations and an asset writedown, the company earned 55 cents per share in the quarter, beating Wall St.'s consensus view by 3 cents. The shares slipped 4 cents to $19.65.

Caterpillar reported third-quarter profit of $222m, or 62 cents a share, up from 61 cents a share in the year-earlier period. Excluding a charge related to bond retirement, earnings were 73 cents a share as higher pension and healthcare benefits costs offset higher sales volumes. Total sales and revenue rose 9% to $5.55bn, due primarily to higher machinery volumes, increased sales in its financial products business segment and the favourable impact of foreign currency movements. The shares fell $5.66 or 7.19% at £73.06.

Ford reported a third-quarter net loss of $25m, or a penny a share, against a loss of 18 cents a share in the year-earlier period. Excluding the effects of adopting a new accounting standard and a charge related job cuts in Europe, earnings from continuing operations were a better-than-expected 15 cents a share. The automaker raised its full-year earnings forecast to 95 cents to $1.05 a share from 70 cents. The shares rose 0.09 cents to $12.23.

On the economic front, the number of Americans seeking state unemployment benefits has fallen to a new eight-month low, the Labour Department said. The seasonally adjusted four-week average of initial claims fell by 4,250 to 390,750 in the week ending October 11, the lowest since early February. The decline was roughly in line with forecasts.

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