Stock Reports Thursday

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LONDON (Reuters) - Stocks fell in Europe and Asia on Thursday and gold hit a seven-year high after OPEC (news - web sites)'s surprise production cut and prospects of a weaker dollar raised a question mark over the nascent global economic recovery.





Oil, which rose four percent on Wednesday, edged higher on Thursday. The dollar, which sagged in New York trade as the prospect of higher energy costs hit U.S. stocks, found some support against the euro after Germany's key Ifo business climate index came in a shade weaker than forecast.


However, the greenback stayed close to its recent eight week lows against the euro and three-year low against the yen hit after last weekend's call by the Group of Seven industrialized nations for more flexible exchange rates -- a move which led to a broad retreat by the dollar.


Later markets will focus on a slew of U.S. data, including durable goods orders and weekly jobless claims, for further clues to the robustness of the recovery.


The Organization of the Petroleum Exporting Countries agreed on Wednesday to remove 900,000 barrels per day from world supplies from November, ahead of peak winter demand. "OPEC on its own probably would not have been very much noticed. The combination of two big geopolitical events had added force," said John Hatherly, head of global analysis at M&G Asset Management.


"It doesn't make a fundamental difference to the world economic outlook in the way that currencies do. The currency decisions over the weekend are much more important." Brent crude for November was up 18 cents a barrel at $26.85. U.S. light crude was 11 cents higher at $28.35.


European shares hit a five-week low on worries about the oil price though the Ifo index, which rose for a fifth consecutive month, limited losses.


Rainer Guntermann of Dresdner Kleinwort Wasserstein said the Ifo report gave mixed message and that the decline in the current conditions component was disappointing.


"While hopes for recovery are still there, there are so far few signs that it will actually materialize," he said.


"In addition, the stronger euro and higher oil prices pose risks for the coming months...We shouldn't give up on a recovery but it will be a very modest one at best."


The FTSE Eurotop 300 index of pan-European blue chips was down 0.97 percent while the narrower DJ Euro STOXX 50 index was off 0.91 percent.


In the United States, technology shares, which have risen sharply in recent months, nosedived on Wednesday. The tech-laced Nasdaq saw its biggest one-day loss in about six months.

 

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U.S. STOCKS SET FOR MIXED START


The Nasdaq fell 3.05 percent and the blue-chip Dow Jones Industrial average closed 1.57 percent lower.


U.S. stock index futures were slightly higher in Europe, indicating a mixed start on Wall Street.


Japanese stocks also tumbled, with the Nikkei average falling 1.83 percent to close at a four-week low. The broader TOPIX index fell 2.52 percent.


"People were discouraged by a fall in U.S. stocks in the wake of rising oil prices," said Yoshihisa Okamoto, senior vice president at Fuji Investment Management. "That posed a question mark on the highly anticipated recovery in the U.S. economy."





U.S. Treasuries prices, which rose on Wednesday in New York after a well-bid auction of two-year notes, gave back some of their gains in London. Traders looked ahead to the U.S. data.

"The real focus is the jobs number," said one. "People will be looking at the weekly claims number and seeing if we can put together some consistent weeks below the 400,000 mark."

The benchmark 10-year note yield, which moves inversely to the price, was up 1.7 basis points at 4.15 percent, close to last week's five-week low of 4.12 percent.

Euro zone government bond yields were flat to lower ahead of the U.S. date and barely moved by Ifo. The two-year Schatz was yielding 2.31 percent and the 10-year German Bund was yielding 4.08 percent, down 1.1 basis points.

Gold, a safe haven in troubled times hit a fresh seven-year high of $392 an ounce and was last bid at $391.50, compared with $387 in New York.

"We've broken $388, that was an important level, and we can head higher now -- toward $400," a trader said.

In the currency markets, the dollar pulled off its three-year low against the yen on wariness of Japanese intervention and was last at 11.85 yen. Against the euro it was at $1.1486, off the eight-week low of $1.1529.

 

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NEW YORK (Reuters) - U.S. stocks stumbled on Thursday, dragged lower by Eastman Kodak Co. (NYSE:EK - news) after it cut its dividend, and a mixed data suggesting the economy may not be strengthening as much as expected.


New orders for long-lasting U.S. manufactured goods took a surprise tumble last month, while Hurricane Isabel pushed down new jobless claims last week, according to two government reports that offered a mixed read on the economy's health.


Orders for durable goods, items intended to last three years or more, fell 0.9 percent in August, the Commerce Department (news - web sites) said. It was the first decline since April and bucked expectations on Wall Street for a 0.6 percent rise.


Separately, the Labor Department (news - web sites) said initial claims for unemployment benefits fell more than expected to 381,000 last week from a revised 400,000 a week earlier. A key factor in the drop was Hurricane Isabel, which swept through the eastern United States last week and shut down many government offices.


"We're getting a lot of mixed messages now about the economy," said Cary Nordan, vice president at BB&T Asset Management in Raleigh, North Carolina.


The Dow Jones industrial average (^DJI - news) was down 55.23 points, or 0.59 percent, at 9,370.28. The broader Standard & Poor's 500 Index (^SPX - news) fell 3.29 points, or 0.33 percent, to 1,006.09. The technology-laced Nasdaq Composite Index (^IXIC - news) was off 14.67 points, or 0.8 percent, at 1,829.03.


"We're seeing a tight trading range, with investors and managers being somewhat cautious after yesterday's sell-off. After getting hit with currency and OPEC (news - web sites) news earlier this week, investors are getting tired of having negative news and want to see something positive," Nordan said.


Eastman Kodak slumped more than 14 percent and weighed on the blue-chip Dow, after it slashed its dividend by 70 percent to 50 cents a share. Kodak also unveiled an aggressive plan to reduce spending and its reliance on shrinking camera and film sales, in favor of higher-growth items like printers and medical imaging devices. Its shares fell $3.85 to $23.14.


Flextronics International Inc. (Nasdaq:FLEX - news) topped the Nasdaq's most actively traded list, falling 71 cents or 4.7 percent to $14.29.


On Wednesday, a California jury ordered Flextronics to pay medical device maker Beckman Coulter Inc. (NYSE:BEC - news) $3 million in compensatory damages and $931 million in punitive damages, after finding that Flextronics pressured Beckman to pay exorbitant prices for components. Flextronics said it would challenge the verdict, which it said not supported by facts.


Among gainers, Bed Bath & Beyond Inc. (Nasdaq:BBBY - news), the home goods retailer, rose after it reported a 29 percent jump in earnings late Wednesday, driven by higher sales at its stores open at least a year. The company also raised its earnings outlook for the year. Bed Bath & Beyond shares rose $1.19, or 3.02 percent, to $40.61.

 

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NEW YORK (Reuters) - U.S. stocks ended at their lowest levels in about a month on Thursday, as a mixed batch of economic data muddled the outlook for a recovery and an unprecedented dividend cut by Eastman Kodak Co. (NYSE:EK - news) further dampened the mood.

While expectations for improvement in the economy and corporate profits in the months ahead remain largely intact, the market's strong run over the past six months has sapped much of the demand for equities as investors await more signs an economic rebound is under way.


Major market gauges vacillated near the unchanged mark through much of the session before staging a sell-off in the last hour of trading.


"We're sort of getting conflicting news and a lot of the good news is already built in," said Edgar Peters, chief investment officer at PanAgora Asset Management. "We all realize that equities have risen quite a bit, so all of those things together just make things uncertain."


One economic report on Thursday showed orders for durable goods, or big-ticket manufactured items, fell unexpectedly in August. Another, however, showed the housing market, which has been an area of strength in an otherwise soggy economy, remains red hot.


Weekly jobless claims showed an unexpectedly big drop, but the data was skewed by the impact of Hurricane Isabel, which swept through the eastern United States last week, preventing residents from getting to government offices.


The Dow Jones industrial average (^DJI - news) dropped 81.55 points, or 0.87 percent, to 9,343.96, while the broader Standard & Poor's 500 Index (^SPX - news) fell 6.12 points, or 0.61 percent, to 1,003.26. The technology-laced Nasdaq Composite Index (^IXIC - news) dropped 26.50 points, or 1.44 percent, to 1,817.20.


Trading was active, with about 1.5 billion shares traded on the New York Stock Exchange (news - web sites) and 2 billion shares traded on the Nasdaq.


Year to date, the Dow is up 12 percent, the S&P 500 is up 14 percent, and the Nasdaq Composite is up 36 percent.


But a sense that the market may have run out of steam for now as Wall Street braces for quarterly earnings to begin pouring in next month has put investors on guard, analysts said.


Eastman Kodak, the No. 1 maker of photographic film, weighed heavily on the blue-chip Dow average after it slashed its dividend by 70 percent to 50 cents a share.


Kodak also unveiled an aggressive plan to reduce spending and its reliance on shrinking camera and film sales, in favor of higher-growth items like printers and medical imaging devices. Its shares hit a record low at $21.98 during the session and ended down $4.84, or 18 percent, at $22.15.


Bisys Group Inc. (NYSE:BSG - news) was another big decliner, falling more than 22 percent, a day after it warned its current-quarter earnings would be lower than forecast. Shares of Bisys, which provides outsourcing services to financial services companies, fell $3.72 to $12.95.


Flextronics International Inc. (Nasdaq:FLEX - news), the world's largest supplier of manufacturing services, fell after it was ordered by a southern California jury late Wednesday to pay medical device maker Beckman Coulter about $3 million in compensatory damages and a staggering $931 million in punitive damages for fraud, economic duress and breach of contract. Its shares dropped $1.10, or 7 percent, to $13.90.


Among gainers, Bed Bath & Beyond Inc. (Nasdaq:BBBY - news), the home goods retailer, rose after it reported a 29 percent jump in earnings late Wednesday, driven by higher sales at its stores open at least a year. Bed Bath & Beyond shares rose 30 cents to $39.72.