US markets end run of gains

MARKET OUTLOOK

- US: US markets dropped this week, ending the longest stretch of weekly gains since 2004. The major averages closed modestly lower for the week but finished Friday with respectable gains as investors rallied around some more acquisition activity. The S&P 500 Index climbed above its highest close in the first four days of the week. Shares from utilities had the worst performance, followed by semiconductors, real estate and automobile industries while consumer durables and retailing managed to close on a positive note. Technically, the week should be positive as momentum indicators remain well oriented.

- EUROPE: European markets had a limited corrective week as investors speculated that rates will rise in Europe and cuts in the US now look less likely. Banks, health care, insurance and retail stocks underperformed while telecommunications, industrial goods and services and basic resources lost ground. Technically, European indices should be able to print new year highs in the forthcoming days.

COMPANY PREVIEW

Vodafone (GBp 151.4 ; 4.41% ; VOD ; VOD.L)

Vodafone is seen reporting FY07 net income of £6.03bln (net loss of £21.91bln last year) on revenue of £31.3bln (£29.35bln) on Tuesday. In the beginning of the month, the Co said it planned to acquire Ya.com valued E400m-E500m (Expansion) and sell its Australian and New Zealand (National Business Review). In other news, Vodafone and T-Mobile led gains in European telecommunications stocks as investors speculated on the rumours of possible acquisitions in the industry.

Statoil (NOK 166.75 ; -0.3% ; STL ; STL.OL)

On Wednesday, Statoil is expected to release 1Q net income of NK8.61bln (NK10.26bln last year). The Co has recently got permission to extend the capacity to more than 800m cubic meters of its joint gas-store unit with Scottish and Southern to make it the country's biggest onshore storage facility (Regulatory News Service).

Polo Ralph Lauren Corp (USD 92.22 ; -2.48% ; RL ; RL.N)

In the US, Polo Ralph Lauren may post 4Q EPS of $0.61 ($0.63 last year) on sales of $1.02bln ($971m). In March, the Co agreed to buy 50% of Polo.com for $175m. In April, Polo Ralph Lauren said that it would spend approx. $370m to buy control of its business in Japan.

Dell Computer (USD 25.99 ; -0.31% ; DELL ; DELL.O)

Dell is seen announcing its 1Q08 EPS of $0.26 ($0.33 last year) on sales of $14.08bln ($14.21bln) on Thursday. The Co opened a second plant in Brazil in May to stimulate sales. Later, Dell said it will sell personal computers at Wal-Mart Stores since the Co was displaced by Hewlett-Packard as the industry leader.

Sears Holdings (USD 179.42 ; -0.26% ; SHLD ; SHLD.O)

Finally, Sears Holding will deliver 1Q08 EPS of $1.21 ($1.11 last year) on sales $11.66bln ($11.99bln) on the same day. Last week, the Co chose MPG as its new media planning and buying services agency. In the beginning of May, the group launched a new integrated marketing campaign, which takes a fresh approach to presenting the products, services, and solutions that Sears offers to customers.