Mixed week for US, European markets

MARKET OUTLOOK

- US: US markets were mixed last week as the Dow Jones reached a new record high and the S&P500 gained 0.22% week-on-week while the Nasdaq 100 declined slightly more than 1%. Utilities, pharma. and bio. and transportation shares helped the market rise while stocks from the retailing, capital goods and semiconductors were a drag. The earnings season has so far in general produced better than expected results. The Fed is meeting this Wednesday (status quo at 5.25% expected) so we could have some volatility. Technically, US indices remain well oriented above their rising 20d moving averages.

- EUROPE: European markets were mixed last week with the Dax and Cac rising and the FTSE 100 and S&P/MIB declining. Stocks from the basic resources, health care and oil and gas sectors rose while stocks from the insurance, banks and technology sectors were under pressure. On the economic front watch this week's September IFO data in Germany. Technically, any test of the rising 20d moving averages on the indices should be seen as early signs of a possible consolidation.

COMPANY PREVIEW

BP (GBp 602 ; 1.69% ; BP/ ; BP.L)

BP reports its results on Tuesday, the market expects 3Q/Sep net income of $4.75bln ($5.33 a year ago) and EBIT of $8.15bln ($8.61bln). On October 5, the group said 3Q production fell 0.6% to 3.80mbpd of oil and gas as reduced output from its Prudhoe Bay field in Alaska added to start-up delays in the Gulf of Mexico.

Altria (USD 79.67 ; 0.05% ; MO ; MO.N)

Altria Group will report its 3Q/Sep results on Wednesday. The market expects EPS of $1.41 ($1.38 a year ago) on a revenue of $17.786bln ($17.306bln). Altria is changing from its typical schedule of releasing earnings a day after Kraft's report, which is scheduled for today. The market is speculating about a possible break-up announcement.

Microsoft (USD 28.43 ; 0.21% ; MSFT ; MSFT.O)

On Thursday, Microsoft is delivering its results, and 1Q/Sep EPS is seen at $0.31 ($0.31 a year ago) on a revenue of $10.754bln ($9.741bln). The group is considering offering coupons for customers who buy computers at Christmas, allowing them to upgrade to Windows Vista when it is released in January. Analysts say that accounting rules will probably require Microsoft to delay as much as $600m of those sales until the following quarter.

Glaxosmithkline (GBp 1486 ; 1.85% ; GSK ; GSK.L)

Friday, GlaxoSmithKline announces 3Q/Sep results on the same day, and the market expects EPS of $0.22 ($0.21 a year ago) on a revenue of $5.91bln ($5.471bln). Excluding items, the group's EBIT margin should reach appx. 31.8%, 2.6 points below 3Q margin last year, mainly due to a less favourable base effect, rising R&D and marketing budgets.

Exxon Mobil (USD 69.55 ; 1.68% ; XOM ; XOM.N)

The same day, Exxon Mobil is expected to report 3Q/Sep EPS of $1.58 ($1.32 a year ago). Last week, Indonesia's Vice President Jusuf Kalla said the group will be given priority when negotiations start on developing the Natuna gas reserve.