Futures Lower as Economic Growth Slowed. Stocks to Watch: CL, FO, MRK, MET, NWL, TNC, TWC, and DIS

Published on Friday, 30 July 2010 08:50 Written by Christopher Lynn

New York, July 30^th (TradersHuddle.com) – Stock futures pointed to lower open after a report showed U.S. economic growth slowed more than expected in the second quarter as Capital investment drive by businesses saw imports increasing and high unemployment is cutting into growth rates.

The Commerce Department said Gross domestic product expanded at a 2.4% annual rate, after a revised 3.7% growth pace in the January-March quarter. Economists had expected a 2.5% growth for the second quarter.

Overseas weakness also is affecting sentiment. Weaker than expected Japanese unemployment data and a rising yen weighed and Cautious comments from Moody's about Spain added pressure in Europe.

Today’s stocks to watch: Colgate-Palmolive (NYSE:CL), Fortune Brands (NYSE:FO), Merck (NYSE:MRK), MetLife (NYSE:MET), Newell Rubbermaid (NYSE:NWL), Tennant (NYSE:TNC), Time Warner Cable (NYSE:TWC), and Walt Disney (NYSE:DIS).

Colgate-Palmolive (NYSE:CL), the maker of consumer oral, personal, and household care products, was downgraded to a Neutral from Buy at Goldman and removed from the coveted Conviction Buy list, following yesterday’s earnings report and outlook that disappointed investors. CL continued yesterday slide of more than 6%, its down more than 0.60% in pre-market trading.

Fortune Brands (NYSE:FO), the holding company that offers a broad variety of wine, spirits, and golf products, beat beats analysts’ expectation on revenues that were higher than estimates. Fortune reported a profit of $0.98 per share, $0.22 better than consensus; revenues climbed 9.1% year over year to $1.9 billion. The company raised its guidance for full year 2010, in-line with consensus, sees EPS of $2.60-2.90.

Merck (NYSE:MRK), the pharmaceutical company maker of Singulair, reported better than expected earnings on revenue that was in-line with estimates. The company reported a profit of $0.86 per share, $0.03 better than consensus; revenues climbed to $11.35 billion, which was in=line with analysts’ estimates. Merck issued in-line guidance for full year 2010, it sees EPS of 3.29-3.39 on revenues of 45.4-46.1 billion. Merck shares fell more than 1.5% in pre-market trading.

MetLife (NYSE:MET), the insurer and financial services firm based in New York City, gained 0.8% in pre-market after the biggest U.S. life insurer swung to a second- quarter profit as revenue improved and the company booked an investment gain on derivatives.

Newell Rubbermaid (NYSE:NWL), the maker of Rubbermaid housewares and Graco infant and children products, reported better than expected earnings and raised its full year guidance. The company reported of $0.51 per share, $0.07 better than consensus. Newell Rubbermaid raised guidance for full year 2010, it sees EPS of $1.40-1.50, versus consensus of $1.47, as it continues to expect 2010 net sales growth in the low to mid single digit range. The company is raising its expectations for core sales growth to mid single digits, as compared with low to mid single digits in its previous guidance.

Tennant (NYSE:TNC), the maker of non-residential floor maintenance equipment, floor coatings, and related products, was upgraded to a Buy from Hold at Needham. The firm set its target price at $40.

Time Warner Cable (NYSE:TWC), the cable television provider, was upgraded to a Buy from Hold at Citigroup.

Walt Disney (NYSE:DIS), the largest media company in the world, announced the sale of its Miramax Films unitto Filmyard Holdings for over $660 million subject to certain adjustments. The main partners in Filmyard include Ron Tutor, Tom Barrack, and Colony Capital LLC. The transaction is subject to certain regulatory approvals and is expected to close between September 10, 2010 and the end of the calendar year.