The PremiereTrade Market Wrap for 12/05/07

JDfn™ - The PremiereTrade Market Wrap

Congressional aides say the Bush administration has hammered out an agreement with industry to freeze interest rates for certain subprime mortgages for five years in an effort to combat a soaring tide of foreclosures.
The Mortgage Bankers Association's index of applications to buy a home or refinance a loan increased 22.5 percent to 791.8, the highest level since July 2005.
Productivity in the non-farm business sector increased at a 6.3% annual rate in the quarter. A month ago, the government reported that productivity rose 4.9% annualized.
The ISM non-manufacturing index fell to 54.1% from 55.8% in October. The drop was larger than expected. Economists were looking the index to decline to 55.0%.
The Commerce Department reported that factory orders advanced by 0.5 percent in October, far better than the flat reading that had been expected.
ADP Employer Services reported that companies in the U.S. added 189,000 jobs in November, more than economists had forecast.
The Organization of Petroleum Exporting Countries decided to keep production unchanged. Reports from Abu Dhabi indicated that OPEC left output at current levels, with a meeting scheduled next month to discuss policy again.
U.S. retailers' sales rose 2.5 percent last month, starting off what may be the slowest-growing holiday shopping season in five years. Consumers scaled back purchases in the last week of November following Thanksgiving weekend discounts.
In Forex News
The British pound dropped sharply, as traders bet that the Bank of England will follow in the Bank of Canada's footsteps and cut its base interest rate tomorrow. The increasingly dovish stance in currency markets comes after measures released today showed declines in house prices, services-sector sentiment and consumer confidence.
The European Central Bank, which also decides interest rates tomorrow, isn't facing the same pressure to cut interest rates, with euro-zone inflation running at 3%.
Separately, the Australian dollar was lower against rivals after the Reserve Bank of Australia held interest rates unchanged but gave a more dovish outlook than it did in the preceding month.
According to Xinhua News Agency Reports, China will shift its monetary policy "from prudent to tight" in 2008 to prevent its already hot economy from overheating and to try to contain accelerating inflation that threatens social stability. Xinhua said the decision was made at a closed-door economic conference, which the country's Communist Party leaders hold every December to draft policy for the coming year.
Scheduled Economic Reports (Thursday)
Initial Jobless Claims (Week of Dec 1st)
In Earnings News
Sanderson Farms (SAFM) reported profit well above its year-ago results, although earnings still missed Wall Street expectations by a penny per share mainly due to squeezed margins.
Neiman Marcus, Inc. reported total revenues of $1.13 billion compared to $1.04 billion in the prior year.
And the Isle of Capri Casinos (ISLE) reported a quarterly loss of $24.6 million, or 80 cents per share. Excluding one-time items, the company posted a loss of 45 cents per share. Analysts expected a loss of 4 cents per share.
Scheduled Earnings Reports (Thursday)
Korn Ferry International, Toll Brothers, Fleetwood Enterprises, Hooker Furniture, Movado Group, Dave & Busters, and Smith & Wesson
Stocks in the News
Collective Brands? (PSS) fiscal third-quarter net income fell to $25.5 million or 39 cents a share, from $28.9 million, or 43 cents a share, a year earlier.
Intel (INTC) was upgraded to overweight from market weight with the broker seeing PC strength and benign selling price pressure next year.
Prudential Financial Inc (PRU) and India's real-estate developer DLF Group agreed to form a joint venture in Mumbai.