Weekly Market Report 11-26-2004

Thanksgiving Day causing slow trading week
By Rick Paler


It was a very slow week due to the Thanksgiving Day holiday. Many traders took extended vacations and both economic and corporate news was light. The Bond market was also slow, with it closing early on Wednesday and Friday and being closed along with the stock market on Thursday. The market ended higher for the week on expectations that Black Friday, the day after Thanksgiving, which kicks off the holiday sales season would be stronger than last year.

In corporate news, this week Deere & Co. (DE) earnings surged, exceeding analyst estimates by $0.44 per share. The company cited favorable market conditions when they reported earnings of $1.41 per share or $356.7 million. Analysts had expected earnings of only $0.97 per share. Sales and revenues grew 32% to 5.207 billion for the quarter. The company expects continuing sales and profit growth in 2005.

H.J. Heinz (HNZ) reported earnings of $0.56 per share below the streets estimates of $0.59 per share. Sales at the company rose 5.2% to $2.2 billion. The company said that for the next quarter it expects to earn $0.46 per share, above last years $0.37 per share for the same period. The company also released their 2005 guidance stating that it expected to earn $1.65 to $1.75 per share.

Mylan Laboratories (MYL) said that it was rejecting Carl Icahn’s bid to buy the company and called his bid a “self-serving publicity device.” Mr. Icahn, Mylans largest share holder has been against the company acquiring King Pharmaceuticals (KG), which is under SEC investigation.

Campbell Soup (CPB) exceeded Wall Street estimated, when they reported that the company had earning $230 million or $0.56 per share for their third quarter. The company cited strong U.S. sales and reconfirmed their 2005 earnings guidance of 5% to 7% growth.

In economic news, the dollar continues its slide against the Euro and Yen. The dollar now is near an all time low against the Euro and is at a four year low against the Yen. The low dollar will help U.S exports making U.S. goods cheaper overseas, but hurt European and Japanese imports to the U.S., making foreign goods more expensive.

The final University of Michigan consumer sentiment for November came in at 92.8 down from the preliminary reading of 95.5 and below economist estimates of 96.0. The lower number reflects consumers’ reactions to higher energy prices and job growth.

The Five and Ten year Treasury notes both had higher yields at the close of the week, while the Thirty year Bond remained unchanged. The 5 year Note closed yielding 3.62% and the 10 year Notes yield was up to 4.23%. The 30 year Bond closed the week yielding 4.88%.

Next week the market will continue to watch the U.S dollar and will anxiously await the sales results from Black Friday. Company’s reporting poor weekend sales will be punished by traders. Companies releasing earnings next week are; Chico’s FAS (CHS), Dollar General (DG), Neiman Marcus Group, Inc. (NMGA), and Pall Corp. (PLL).