Stocks to Open Lower Ahead of New Home Sales. Stocks to Watch: BAC, BP, DB, DD, HD, IBM, LOW, UBS, and UA

Published on Tuesday, 27 July 2010 07:37 Written by Christian Paolinetti

New York, July 27^th (TradersHuddle.com) – Stock futures were higher after earnings from Europe’s largest banks lifted sentiment on the financial sector. A strong earnings report from DuPont added to the bullish sentiment.

European shares were higher with banks making gains on the back of strong earnings in the sector.

On economic news, the May Case-Shiller home price report will be released at 9 am. At 10 am, the Conference Board will be out with its July consumer confidence index, expected to come in at 50.8.

And the Treasury will sell $38 billion in 2-year notes later, with the results of the auction available shortly after 1 pm. It will follow up by selling $37 billion in 5-year notes Wednesday and $29 billion 7-year notes Thursday.

Today’s stocks to watch: Bank of America (NYSE:BAC), BP (NYSE:BP), Deutsche Bank (NYSE:DB), DuPont (NYSE:DD), Home Depot (NYSE:HD), International Business Machines (NYSE:IBM), Lowes (NYSE:LOW), UBS (NYSE:UBS), and Under Armour (NYSE:UA),

Bank of America (NYSE:BAC), the largest U.S. lender, gained 0.71% in pre-market trading, as UBS (NYSE:UBS) and Deutsche Bank (NYSE:DB), two of Europe’s largest banks posted better than expected quarterly results lifting sentiment in the financial sector. UBS beat analysts’ expectations on both the top and bottom line, and Deutsche Bank reported net income for the quarter of EUR 1.2 billion versus consensus of EUR 1.1 billion on revenues that were slightly below expectations. Shares of Deutsche Bank climbed close to 2.5% and UBS surged 7.33% in early pre-market trading.

BP (NYSE:BP), the embattled energy giant, reported a record loss of $17.2 billion for the quarter after it took a charge for the worst oil spill in U.S. history. The earnings release came, as the board of directors announced it would replace Tony Hayward, BP’s CEO with Robert Dudley. Mr. Hayward, who has been a lighting rod for criticism for the handling of the oil spill in the Gulf, will step down on October 1^st. Mr. Dudley, an American citizen, had just recently been put in charge of the oil spill containment and clean up efforts. Analysts expect that the new CEO will step up asset sales to reach as much as $30 billion over the next 18 months, in an effort to raise cash to face cleanup costs and liabilities from the environmental disaster, which analysts expect to exceed $30 billion.

DuPont (NYSE:DD), the 3^rd largest U.S. chemical producer and Dow component, beat analysts’ expectation, when it reported its quarterly earnings report this morning. DuPont posted a profit of $1.17 per share, $0.24 better than consensus; revenues jumped 25.6% year over year to $8.62 billion, which was above expectations. The chemical and Life Sciences Company also raised guidance for full year 2010; it now expects earnings per share of $2.90-3.05, versus consensus of $2.64. DuPont results reflect higher volumes and higher local prices with 1% impact from currency exchange.

International Business Machines (NYSE:IBM), the IT solutions and consulting services provider, could see some volatility in today’s trading session on news that the European Commission has decided to start formal antitrust investigations. The commission will investigate two cases, where there is suspected abuse of dominant market position. Both cases are related to IBM's conduct on the mainframe computers’ market.

Home Depot (NYSE:HD), and Lowes (NYSE:LOW), the largest home improvement retailers, will likely see some upside bias after bullish analysts’ comments. FBR Capital said in a report that despite its channel checks support the notion that home improvement sales trends are decelerating from last quarter, they have not turned negative, as the market had been anticipating. Even on lowered assumptions, FBR believes both Home Depot and Lowes have upside potential, so the firm maintained its Outperform rating for both home improvement retailers.

Under Armour (NYSE:UA), the performance athletic apparel and footwear Company, will likely see some upside bias, as it beat analysts expectation on both bottom and top line. Under Armour posted a profit of $0.07 per share, $0.04 better than consensus; revenues surged 24.4% year over year to $204.8 million, which was better than expectations. The company also raised guidance for the full year 2010; it now sees EPS of $1.11-1.13 versus $1.10 consensus.