The Star Online: Business
The Star Online: Business |
- FBM KLCI up in early trade
- US economy shows signs of momentum in 4th quarter
- Dell revenue flat, warns on full-year outlook
| Posted: 15 Nov 2011 04:57 PM PST KUALA LUMPUR: The FBM KLCI climbed 6.58 points or 0.44% to 1,483.85 in early trade on Wednesday, tracking the marginal gains seen on the overnight Wall Street. In its market preview for today, HwangDBS Vickers Research said that the benchmark FBM KLCI is likely to oscillate around the immediate support level of 1,475 pending the emergence of fresh market leads. "After a volatile session last night, key U.S. stock indices ended higher by between 0.1% and 0.5% on hopes that the new Italian leader would make progress in resolving the country's sovereign debt problems," it said, adding that the nervous Wall Street performance may spread to the local bourse ahead. In focus today, Harvest Court Industries Bhd resumed trading and slumped 63 sen or 29.5% to RM1.50 after being suspended and declared as designated securities on Tuesday. Financial counters, AMMB Holdings and Alliance Financial Group are scheduled to announce their latest quarterly financial results during lunch hours today Key regional markets are mostly up with Tokyo's Nikkei 225 up 0.14% to 8,554.11 points, and Seoul's Kospi adding 0.64% to 1,898.22. Nymex crude oil was quoted at USD99.22 per barrel. Spot gold was USD1780.30 per ounce while silver was USD34.44 per ounce. The ringgit was quoted at 3.1605 to the USD and 4.2693 to the euro. Full content generated by Get Full RSS. |
| US economy shows signs of momentum in 4th quarter Posted: 15 Nov 2011 04:24 PM PST WASHINGTON (Reuters) - The economy showed signs it maintained speed into the fourth quarter as retail sales increased in October and a gauge of manufacturing in New York state rose this month for the first time since May. Other data on Tuesday showed muted price pressures at the wholesale level. That should provide the Federal Reserve scope to give more aid to the economy in the face of an increased threat to the recovery from Europe's debt crisis. "The economy seems to be in solid shape," said Alex Hoder, an economist at FTN Financial in New York. "Growth is not strong, but it is not too bad either, and much better than the fourth-quarter recession many were expecting just a few months ago." Retail sales increased 0.5 percent in October, the Commerce Department said, after they rose 1.1 percent the prior month. The fifth straight monthly gain beat economists' expectations for a 0.3 percent increase. The stronger tone of the economy was further enhanced by a report from the New York Federal Reserve Bank showing factory activity in New York state grew in November for the first time since May as shipments improved even though new orders fell. The survey of manufacturing plants in the state is one of the earliest monthly guideposts to U.S. factory conditions, though it accounts for only a small slice of the overall manufacturing sector, which has been a key pillar of the recovery. The data supported recent reports suggesting the economy was gaining traction after stumbling in the first half of the year. Economists at JPMorgan said growth in the current quarter was tracking close to a 3 percent annual pace after expanding at a 2.5 percent rate in the third quarter. A third report showed the Producer Price Index, a measure of prices received by U.S. farms, factories and refineries, fell 0.3 percent on weak gasoline and motor vehicle prices. It was the first drop in four months. Excluding volatile food and energy, core wholesale prices were flat. FED SEEN EASING Stocks on Wall Street closed higher, but investors remained worried about Europe's debt crisis. U.S. Treasury debt prices were slightly lower, while the dollar firmed broadly. Despite a strengthening economy in the last few months, the recovery is not yet out of the woods, with analysts warning that Europe is almost certainly facing recession. "If you were going to make a list of downside risks to the economy, the sovereign debt issues in Europe, the banking issues in Europe, are at the top of everybody's list of identifiable threats," White House Council of Economic Advisers Chairman Alan Krueger said at an event sponsored by the Wall Street Journal. With the outlook for Europe darkening, economists believe the Fed will want to move to safeguard the U.S. recovery, although officials at the central bank continue to differ over the threshold for further action. October's rise in retail sales suggested consumer spending would support growth in the fourth quarter, though economists worry that much of the spending is being funded from savings. "Consumer spending is holding up better than many people had anticipated, given a 9 percent unemployment rate and modest wage gains," said Ryan Sweet, a senior economist at Moody's Analytics in West Chester Pennsylvania. "This pace of consumer spending is only sustainable if the labor market continues to heal." Wal-Mart Stores Inc Chief Executive Mike Duke said the retail giant's U.S. customers were still worried about jobs and only one in 10 mothers taking part in its surveys view the economy as "good." With food prices rising more quickly than most wages, some shoppers were concerned about holiday meals, the company said. Retail sales last month were supported by pent-up demand for motor vehicles. Still, even excluding autos, sales rose 0.6 percent, the largest increase in seven months. There were also gains in sales of sporting goods, electronics and appliances, and building materials. But clothing store sales posted their largest decline since December 2010 and receipts at service stations fell, reflecting weak gasoline prices. Full content generated by Get Full RSS. |
| Dell revenue flat, warns on full-year outlook Posted: 15 Nov 2011 04:21 PM PST NEW YORK (Reuters) - Dell Inc's quarterly revenue just missed Wall Street estimates, and the world's No. 3 personal computer maker warned that full-year revenue could be hurt by an industrywide shortage of hard drives. Uncertainties surrounding the economy and the hard drive shortage means that Dell's fiscal 2012 revenue is tracking at the lower end of its growth forecast of 1 to 5 percent, the company said. Investors fear a slowdown in PC manufacturing through 2012 after flooding in Thailand severely disrupted production of hard drives, a key component in computers. "To the extent that we see higher (drive) prices we'll also see some offsets in other components and we're going to do everything we can to protect our customers. But maybe in some cases we do have to raise our prices," Chief Financial Officer Brian Gladden told Reuters in an interview. The shortage of hard drives will force Dell to prioritize toward higher-value customers and products," Gladden said. Dell also appears to not have benefited much from the disarray at bigger rival Hewlett Packard Co, which spent much of the last quarter considering whether to spin off its PC business. The company lost market share during the third quarter to Asian rival Lenovo Group which vaulted past it to claim the No. 2 ranking in PCs behind market leader HP. "The PC business will remain difficult over the next year," said Brian White, analyst with Ticonderoga Securities. He cited pressure from slowing public sector spending as various government agencies around the world take austerity measures over the next year. Dell's public business generated revenue of 4.2 billion, which was down 2 percent from the 2010 third quarter due to weakness in the United States and Western Europe. Desktop PC revenue slid 6 percent to $3.4 billion as Dell's sales to consumers fell 6 percent over the same period. Chief Executive Michael Dell said the company was moving away from low-margin businesses. "We're choosing not to participate in low value opportunities which have put short-term pressure on revenue growth but have been a real driver of our expanded margins and growing earnings," Dell told analysts on a conference call. Gross margins slipped to 23.1 percent from 23.2 percent in the prior quarter, but rose from 20 percent a year earlier. Dell said revenue in its fiscal third quarter was essentially flat at $15.36 billion, but slightly lower than the average analyst estimate of $15.65 billion according to Thomson Reuters I/B/E/S. Analysts on average had projected a 1.6 percent climb in Dell's fiscal 2012 revenue to almost $62.5 billion. Net earnings rose to $893 million, or 49 cents a share, from $822 million, or 42 cents a share, in the year-ago period. Excluding items, Dell earned 54 cents a share, better than the average analyst estimate of 47 cents. Dell's large enterprise business increased sales 8 percent in the quarter as corporations continued to upgrade aging hardware. Shares of Dell slid 2 percent to $15.32 in extended trade, after closing at $15.63 on Nasdaq. Full content generated by Get Full RSS. |
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