1,917 words
28 January 2004
06:02 am GMT
Dow Jones International News
(c) 2004 Dow Jones & Company, Inc.


US SUMMARY: Investors Protect Their Profit


DJIA          10609.92   loss 92.59     dn 0.9%

NASDAQ        2116.04    loss 37.79     dn 1.8%

S&P 500       1144.05    loss 11.33     dn 1.0%

Dow Future    10562.00   loss 26.00     dn 0.2%

NASDAQ Future 1516.00    loss 4.00      dn 0.3%

S&P Future    1138.75    loss 3.75      dn 0.3%

10-Yr US Treasury: 4.07% down 0.07


NEW YORK (Dow Jones)--Investors intent on preserving profits looked past positive earnings reports Tuesday and sent stocks sharply lower. Technology stocks saw steep declines on a disappointing outlook from chip maker Novellus Systems Inc. Treasury prices recovered slightly.


FOREX: The euro opens the session a shade lower than its late New York quotes, but still comfortably above $1.2600. The dollar sank across the board Tuesday, with the catalyst for the slide being the disappointing U.S. consumer confidence report.


The dollar was already under selling pressure against the yen after Japanese finance minister Sadakazu Tanigaki indicated that Japan might relax its defense of the dollar. The euro, meanwhile, was rising fast on the back of "an inordinate amount" of buying against the yen, said Josh Levy, president of CMC Group, a currency trading platform in New York.


Dealers are now turning their attention to the Federal Reserve's interest rate decision Wednesday. Most observers expect the Federal Open Market Committee will leave rates on hold at a 46-year low of 1%, with no hint any increases are likely in the near term. The meeting should also see the release of a policy statement much like the one released when the central bank last met in early December.


CALENDAR: Wednesday, Jan 28: Italy Confidence; FOMC



0830  ITA  Jan     Business Confidence 92.1 (91.2)

0830  ITA  Dec     Non-EU trade data

0900  FRA          Weekly cabinet meeting

0930  ITA  Dec     Wage Inflation

1000  FRA          OECD Economic Survey Hungary

1015  GER          ECB allocates long-term refi ops bids

1145  EU           E.U.'s Solbes gives press conference

1200  US           MBA Refinancing Index 51.5%

1330  US   Dec     Durable Goods Orders +2.2% (-2.5%)

1500  US   Dec     New Home Sales -2.4%

1500  EU           E.U.'s Monti attends debate

N/A   GER          German Finance Agency to allocate bids

N/A   US           Federal Open Market Committee meeting;

                   Decision expected at 1915 GMT


STOCKS: After the previous session's rally, when the Dow Jones industrial average reached its highest level in 31 months, not even solid results from five blue chip companies could stop the declines. A consumer confidence reading that missed expectations and jitters about the Federal Reserve's expected statement on interest rates Wednesday contributed to the decline. Still, with results from most companies beating Wall Street's forecasts, most observers remain optimistic about the long term.

"We're still in a good environment, we're still in an upward trend," said Todd Leone, managing director of equity trading at SG Cowen Securities. "I like to see us go down a little bit, actually, it's healthy. You don't want to see the market going in a straight line up. " reported sharply higher profit in its fourth quarter, boosted by robust holiday sales that helped the company post its first annual profit. Kraft plans to shut 20 plants, cut its work force by 6% and use some of the cost savings to build up its brands. The company also posted a 6.7% decline in its net profit.


And in political news, John Kerry overpowered Howard Dean to win New Hampshire's primary Tuesday, a second-straight campaign victory for the Democrat's presidential front-runner.


BONDS: U.S. Treasurys prices posted solid gains Tuesday, with the bond market adjusting positions as the Federal Open Market Committee kicked off a two-day monetary policy meeting.


After trading around unchanged levels early in the session, Treasurys gathered steam after a gauge of consumer confidence failed to meet high expectations, raising questions about the potential for creation of new jobs. Weakness in the dollar had also helped boost Treasurys as traders anticipate further intervention efforts by Asian central banks that are ultimately recycled via the purchase of Treasurys.


The fragile state of the labor market has been a key source of strength for the bond market this month since December payrolls posted a gain of just 1,000. And the FOMC is expected to avoid signaling an end to its easy monetary policy until a sustainable recovery in job creation is well entrenched.


The FOMC began its two-day meeting Tuesday. Analysts expect the Federal Reserve to keep its federal funds target rate unchanged at its historically low 1.0% and to change little in its official statement due for release at 1915 GMT Wednesday.


ASIAN SUMMARY: Dollar Fall Hits Tokyo Stocks


USD-Yen             105.86       gain  0.20    up 0.2%

AUD-USD             0.7776       loss  0.0012  dn 0.1%

Nikkei 225          10851.51     loss  76.52   dn 0.7%

Hang Seng           13561.62     loss  200.26  dn 1.4%

JGB Yield           1.3100% up 0.0100


TOKYO (Dow Jones)--Tokyo stocks fell Wednesday morning as investors sold technology and auto issues following the U.S. dollar's plunge against the Japanese yen overnight in New York to new 3 1/2-year lows.


The dollar's weakness quickly sent stock prices lower, with technology issues such as Advantest and Tokyo Electron, and autos Honda Motor and Nissan slipping Wednesday morning.


Prices of long-term Japanese government bonds also fell, as profit-taking more than offset demand prompted by the yen's uptrend against the U.S. dollar and declines in Tokyo stocks.


U.S. Treasury prices were mostly unchanged Wednesday in very thin Tokyo trade as players have already adjusted their positions, bond traders said.

Players remain in a wait-and-see mood before the result of the Federal Open Market Committee meeting later today, although traders expect the Fed to leave policy steady and keep their policy statement unchanged.


EUROPEAN OUTLOOK: Shares Seen Opening Lower


Euro-USD            1.2620      loss  0.0018  dn 0.2%

Stlg-USD            1.8272      loss  0.0003  dn 0.01%

USD-Franc           1.2421      gain  0.0019  up 0.2%


ZURICH (Dow Jones)--European shares are expected to open lower, with the higher euro aiding prices of government bonds.


STOCKS: European shares are likely to open lower after the dollar fell overnight and Wall Street tumbled. Some European dealers have expected such a correction after a month-long advance in the markets. IG Index of London is calling the main European exchanges down slightly at the start.


European stocks advanced Tuesday, with the telecommunications sector racking up impressive gains after strong U.S. subscriber numbers from Germany's Deutsche Telekom raised hopes other sector players will follow suit.


Investor confidence received a fillip from German data showing business sentiment in Europe's largest economy improved for the ninth straight month, despite the euro's strength.

"Overall, this month's rise in the Ifo index is a positive sign. After an unchanged assessment of current conditions last month, a rise was important as it confirms expectations for a modest recovery," said economists at Dresdner Kleinwort Wasserstein. Meanwhile, Heineken was expected to acquire a 21% stake in Guangdong Brewery Holdings Ltd., whose shares were suspended from trading pending a press conference at 0800 GMT.


Elsewhere, Aventis signaled it may seek a merger partner to counter Sanofi's hostile bid. Novartis and Glaxo are likely candidates. Sanofi fired the first shot in the public-opinion battle with newspaper ads.


BONDS: Euro-zone government bond prices are likely to open higher, helped by strength in the euro and Treasurys, ahead of the Fed's policy announcement. Euro-zone government bond prices ticked higher Tuesday tracking U.S. Treasurys and euro gains. The fall in Treasurys' yields was also a correction after strong rises last week, said Kornelius Purps, bond analyst with HVB. "Yields had been going up without any fundamental reasons," he said. On the agenda Wednesday are U.S. durable goods orders and new home sales.



-By Dennis Baker; Dow Jones Newswires; 41-1-212-2181;


Accor (12040.FR): FY Revenue

Consensus sales: (DJ, 4 analysts): EUR6.838B (EUR7.139B)

Note: Analysts expect strong growth for 4Q, building off 3Q turnaround, although all decline to give forecasts. Analysts cite effect of weak dollar effect, but also that this is offset by resistance to tough travel market in European budget hotel sector.


Air Liquide (12007.FR): 4Q/FY Revenue

Consensus sales: (JCF, 29 analysts): EUR2.119B (EUR2.068B)

Note: FY revenue at EUR8.357B, +5.8% from (EUR7.9B in '02) Higher prices, recovery in sales to semiconductors industry seen already in first 9-months, expected to have continued. Strong euro seen to have continued to weigh on sales in 4Q.


Northern Rock (NRK.LN): FY Earnings

Consensus pretax profit (Company, 23 analysts): GBP376M (GBP326.2M)

Note: Market to focus on sustainability of high rate of lending growth, net interest margin pressure, decline in popularity of Together product, say analysts. "Bears' concerns about net interest margins rather than total income margin have been unjust," says Hugh Pye of BNP Paribas. Rates stock outperform. Management's mortgage market outlook also seen important.


Vodafone (VOD): 3Q Key Performance Indicators

Note: Company is expected to show subscriber momentum continues to build, but the figures will take a back seat to any comments Vodafone Chief Executive Arun Sarin makes about its U.S. operations. Vodafone has consistently been linked with a bid for U.S. wireless telecommunications company AT&T Wireless Services Inc. (AWE) over the past weeks after it emerged the third-largest U.S. mobile phone company is entertaining takeover bids. CSFB, which rates Vodafone at outperform, said it expects the company to win an increasing share of net adds as a result of its new emphasis on winning market share in Europe through increased subsidies in the U.K. and reduced prices being promoted in Italy, Spain and Germany. The broker expects Vodafone to have added 4 million new subscribers organically. Dresdner said that including increases in its stakes in subsidiaries in Greece and Albania, it expects Vodafone to have 129.8 million subscribers at the end of the quarter. It expects ARPU to be stable as it's too early to see the impact of Christmas sales.


Ryanair (RYAAY): 3Q Earnings

Note: Ryanair (RY4.EI) seen reporting 3Q net profit of EUR47.5 million, up 10% from a year ago, according to a consensus of 3 analysts. Smith Barney's Andrew Light says average fares expected to be -10% but operating costs per passenger should also fall. Outcome of EU investigation into Charleroi deal, carrier's ability to sustain EPS growth of at least 15% a year for the next 3 years remains most important share price drivers.




Lafarge (12053.FR): FY Revenue


Spir Communication (13173.FR): FY Revenue


NRJ Group (12169.FR): 1Q Revenue


MVV Energie (MVV.XE): FY03 Earnings press conference


Halladale Group (HDG.LN): 1H Earnings


ML Laboratories (MLB.LN): FY Earnings


Tandberg (TAA.OS): 4Q/03 Earnings


Zeltia (ZEL.MC): Investor conference


RM Group (RM.LN): AGM


Thirdforce (THF.DB): AGM


Hagemeyer (35547.AE): Announcement on rights issue takeup


OTP Bank (IRB.BS): Mortgage arm on public issue




Document DJI0000020040128e01s0006i