Futures Higher as Apple Boosted Sentiment. Stocks to Watch: NLY, AAPL, KO, CREE, GS, HRL, JPM, MS, TXT, USB, ZION

Published on Wednesday, 21 July 2010 08:31 Written by Christopher Lynn

New York, July 21^st (TradersHuddle.com) – Stock futures pointed to a higher open, as Apple better than expected earnings boosted sentiment, sparking a rally in global technology shares.

Apple (NASDAQ:AAPL), the maker of iPhones and iPads, jumped more than 3% in pre-market trading after the company reported record revenues on strong iPhone and iPad sales. The company issued a profit and sales forecast for third and fourth quarter that was also above analysts’ expectations.

European shares were higher across the board with technology firms leading the gains boosted by Apple.

Federal Reserve Chairman Ben Bernanke is set to begin his semi-annual economic testimony before Congress at the Senate Banking Committee at 2 pm. Investors will be looking for clues on the Fed's outlook for the economy and fiscal policy, as they speculate that the Fed will eventually propose reducing the interest rate it pays in excess banking reserves in a way to incentivize credit.

Today’s stocks to watch: Annaly Capital Management (NYSE:NLY), Apple (NASDAQ:AAPL), Coca-Cola (NYSE:KO), CREE (NASDAQ:CREE), Goldman Sachs (NYSE:GS), Hormel Foods (NYSE:HRL), JPMorgan (NYSE:JPM), Morgan Stanley (NYSE:MS), Textron (NYSE:TXT), US Bancorp (NYSE:USB), and Zions Bancorporation (NASDAQ:ZION)

Annaly Capital Management (NYSE:NLY), the REIT that manages a portfolio of mortgage-backed securities, was upgraded to Outperform from Market Perform at FBR Capital. The firm set its target price at $20 a share after a dividend increase surprise. FBR Capital notes the earnings power potential that Annaly possesses in the second half of this year and into 2011.

Apple (NASDAQ:AAPL) will be gapping higher in today’s trading session, yesterday it dropped below the $250 level mark and recovered, the report that blew past analysts’ expectations will provide with additional momentum to the stock.

Coca-Cola (NYSE:KO), the owner of one of the most valuable brands in the world, reported better than expected earnings on revenue that was in line with estimates. The beverage company reported a profit of $1.06 per share, $0.03 better than the average analyst estimates; revenues climbed 4.9% year over year to $8.67 billion.  Coca-Cola climbed more than 1.5% in pre-market trading.

CREE (NASDAQ:CREE), the maker of semiconductor materials, will have some bearish bias, after Merriman maintained its Neutral rating on the stock. The firm expects CREE to report June quarter upside, when it reports its results on Aug 10^th, however they believe that while strong end market general lighting demand will likely drive revenue upside, they believe its near-peak 48%gross margin levels are unlikely to be sustainable with increasing LED chip supply and higher depreciation cost from its fabrication tool ramp. Merriman notes valuation is near peak levels.

Goldman Sachs (NYSE:GS), the premier investment banking firm, had its estimates cut by FBR Capital. The firm is decreased its 2010 earnings per share estimate to $14.31 to incorporate the just reported worse-than-expected results and a lower run-rate for trading revenues. FBR Capital also lowered its 2011 earnings per share estimates from $18.50 to $17.25.

Goldman Sachs (NYSE:GS) and Morgan Stanley (NYSE:MS), the investment banking firms, were chosen by American International Group (NYSE:AIG) to coordinate an initial public option for its Asian Unit AIA. The company decided for the IPO route after its efforts to sell the unit earlier in the year failed. The company expects that a well manage IPO by Goldman Sachs and Morgan Stanley could help it raise more than $30 billion for the unit in order to use to the funds to payback part of the bailout funds received from the U.S. government.

Hormel Foods (NYSE:HRL), the maker of canned meats like Spam, will likely see a downside bias in today’s trading session, after the stock was downgraded to a Hold from Buy at KeyBanc.

JPMorgan (NYSE:JPM), the 2^nd largest U.S. lender, will be in focus along the rest of the financial sector, as Fed Chief Bernanke will testify before the Senate Banking Committee. Additionally, US Bancorp (NYSE:USB), the fifth largest bank in the nation, reported better than expected profit on revenues that were higher than estimated. US Bancorp reported earnings of $0.50 per share, $0.12 better than the consensus; revenues jumped 114.8% year over year to $4.52 billion.

Textron (NYSE:TXT), the maker of Cessna business jets and Bell helicopters, reported better than expected earnings on revenues that were above estimates. The company said if earned $0.29 a share, $0.20 a share better than the average analyst estimate; revenues grew 3.7% year over year to $2.71 billion versus consensus of $2.49 billion. Textron also raised full year 2010 guidance, it now sees earnings per share of $0.55 - $0.65 a share versus consensus of $0.50 a share. Sales of Cessna and Bell helicopters brands helped the aerospace company to swing back to a profit from a year ago.

Zions Bancorp (NASDAQ:ZION), the collection of regional banks with operations in the Western U.S., was upgraded to a Hold from Sell at Citigroup, following yesterday’s sharp drop on earnings disappointment. Zions tumbled the most in the S&P 500 as shares fell close to 9%.