AMERICAN MARKETS OUTLOOK: U.S. stock markets are expected to open higher Monday, market-watchers say.
FSW Europe is calling the Dow Jones Industrial Average to open up 25 points at 10900, the Nasdaq up eight points at 2260 and the S&P 500 also up eight points at 1270.
This week's focus will be on the inflation report Tuesday, and if the data prove weak, after lower oil prices throughout November, "we could expect a small 'Santa Claus'-infused rally, taking the Dow above 11000," says Anthony Hill at FSW Europe. He adds that the market has tried to and failed to break this level three times recently, and that low volumes will work against a successful break.
EUROPEAN MARKETS: European stock markets are mixed, mostly in low volumes, although a U.S. patent victory for Pfizer has prompted rises in pharmaceutical companies AstraZeneca and GlaxoSmithKline.
AstraZeneca gained 2.5% as investors interpreted Pfizer's victory on its Lipitor cholesterol drug as a signal that AstraZeneca is more likely to win its own upcoming patent battles. GlaxoSmithKline, which doesn't have any upcoming patent cases, rose 2%. The FTSE 100 is up 0.1% at 5537.41. The DAX, however, is down 0.1% at 5346.88 on slight profit-taking as investors close their books before the year-end. But a local analyst says that with little negative news to damp the overall positive sentiment, "we should still close the year on a positive note." The CAC is down 0.1% at 4700.41.
Bunds and gilts are higher, also in thin markets. "There's nothing to push the market one way or the other really. It's going to be a question of positioning ahead of the festive period," says Calyon fixed-income strategist Orlando Green. Gilts are doing slightly better than bunds after a report over the weekend quoted the Bank of England's chief economist, Charlie Bean, as saying the bank will be responding to the news of a recent slowdown in U.K. CPI. On the bund market there was little reaction to the weaker-than-expected euro-zone industrial output data. The March bund future is up 0.11 at 121.53 while the March gilt is up 0.18 at 113.48.
There is renewed buying of the dollar after data late last week showed that the U.S. currency probably isn't at risk from structural problems in the near term, as many had feared. Also, last week's sharp rally in the yen appears to have run its course. The dollar is up at Y116.28, the euro is down marginally at $1.2002, while the pound has slumped to $1.7650.
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TOP STORIES:
NOVARTIS CONSIDERING ALL-CASH BID FOR BERNA BIOTECH: Novartis AG (NVS) said it is considering an all-cash bid for Swiss vaccines maker Berna Biotech AG (BBIN.EB), a move that underlines its determination to become a significant player in the rapidly growing vaccines market. (News Snap by Anita Greil)
CARPHONE WAREHOUSE TO BUY CENTRICA'S ONETEL: Carphone Warehouse PLC (CPW.LN) said it is buying Centrica PLC's (CNA.LN) telecommunication business Onetel for up to GBP154 million, establishing it as the leading alternative to BT Group PLC (BT) in the U.K. fixed-line telecom market. (News Snap by Michael Carolan)
EURO-ZONE FACTORY 0UTPUT DROPS FASTER THAN EXPECTED: Euro-zone factory output declined in October for the second straight month and more sharply than expected. European Union statistics agency Eurostat said factory output fell 0.8% from September and was up just 0.1% on October 2004. (Data Snap by Paul Hannon)
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INSIGHT & ANALYSIS FROM DOW JONES NEWSWIRES:
=FOREX FOCUS: The long reign of commodity currencies looks as if it could finally be coming to an end. It isn't only indications that interest rates in many of these countries are topping out, or nearly topping out, but that commodity prices themselves will no longer provide quite the same support they used to. (By Nicholas Hastings)
=CHARTING EUROPE: Crude oil prices have dropped by around $4 per barrel over the past few days with the biggest decline, some $2, occurring Friday. Minor support has been found Monday and a bounce should ensue in the days ahead. (By Axel Rudolph)
=THE SKEPTIC: The speculative bubble that has kept shares in Faurecia (12114.FR) aloft since mid-2003 has deflated some more with the auto-parts maker's latest profit warning. And so it should. (By Matthew Curtin)
=THE SKEPTIC: The WTO has come up with a meaningless text that quite frankly could have been signed before the Hong Kong trade talks even began. Not only did the 149 delegates who attended achieve virtually nothing, they once again brought into question the credibility of the WTO itself. (By Howard Wheeldon)
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STILL TO COME
ET/GMT COUNTRY/PERIOD
1300/1800 US Dec NAHB Housing Index
N/A JPN Dec Economic Monthly Report
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OTHER NEWS:
Bank of Italy Governor Antonio Fazio said Sunday that he will "wait until Tuesday and then decide" whether to step down, Italian daily Il Corriere della Sera reported Monday.
BG Group PLC (BRG) said its oil and natural gas output increased significantly in the fourth quarter and unveiled price realizations much higher than last year, leading some analysts to review their assumptions. (News Snap by Benoit Faucon)
Swiss reinsurer Converium Holding AG (CHR) posted a third-quarter net loss of $6.9 million, disappointing analysts who had forecast a small profit, and warned that its internal investigation into questionable insurance products will continue. (News Snap by Goran Mijuk)
Executives from stock-exchange operator Deutsche Boerse AG (DB1.XE) and Euronext NV (24151.AE) have held preliminary discussions on the possibility of a merger between the two companies, potentially adding a twist to consolidation in global stock exchanges. (WSJ)
German producer prices rose more than expected on the year in November, at the fastest rate in over 23 years. Prices at Germany's factory gates rose 5% on the year, above the 4.8% increase forecast in a survey by Dow Jones Newswires last week. (Data Snap by Emily Barrett)
Iraq's oil minister said he would resign if the government doesn't overturn Sunday's decision to hike fuel prices five to nine times. The cabinet's decision to hike gasoline prices immediately to stem the growing black market prompted demonstrations in Iraq.
The French finance ministry said the country's current account deficit widened in October from the previous month as exports of goods fell while imports were stable. (Data Snap by David Gauthier-Villars)
NTL Inc. (NTLI) is unlikely to increase its takeover offer for Virgin Mobile Holdings (UK) PLC (VMOB.LN) before the end of the year, a person familiar with the matter told Dow Jones Newswires Monday. (By Jessica Hodgson)
-By Vanya Dragomanovich, Dow Jones Newswires; 44-207-842-9487; [email protected]
(END) Dow Jones Newswires
