Futures Signal a Weak Open. Stocks to Watch: AMZN, BHP, DE, HPQ, NFLX, POT, RIMM, and TGT

Published on Wednesday, 18 August 2010 08:07 Written by Christopher Lynn

New York, August 18^th (TradersHuddle.com) – Stock futures pointed to a lower open following the biggest gain in 2 weeks for the markets, as market participants digested a new round of earnings reports and speculated about the strength of the economic recovery.

At 10:30 the Energy Information Administration will issue its weekly read on crude oil inventories. The EIA data follows Tuesday's report from the American Petroleum Institute, which showed a surprisingly large build in supplies. If the weekly government read on oil inventories from the EIA backs up the data from the API, it could see U.S. crude and product inventories hit a record high.

Overseas, European shares edged lower with oil firms leading the declines on concerns over the strength of U.S. crude demand and excess supply. Asian markets ended mixed.

Today’s stocks to watch: Amazon.com (NASDAQ:AMZN), BHP Billiton (NYSE:BHP), Deere (NYSE:DE), Hewlett-Packard (NYSE:HPQ), Netflix (NASDAQ:NFLX), Potash Corp (NYSE:POT), Research In Motion (NASDAQ:RIMM), and Target (NYSE:TGT)

Amazon.com (NASDAQ:AMZN), the largest online retailer, will likely have an upside bias after The Benchmark Company raised its target price on the stock to $148 from $135 per share, citing that despite recent moderation in traditional retail sales and uncertainty surrounding consumer spending in the second half of the year, Amazon should benefit from further strength in the online channel, with comScore reporting domestic July non-travel ecommerce sales up 9% year over year.

BHP Billiton (NYSE:BHP), the mining giant, fell 1% in pre-market after CNBC reported the company is going hostile on its takeover bid for Potash Corp. (NYSE:POT). Shares of the largest fertilizer company in the world, gained more than 1% in pre-market after jumping yesterday close to 28% on the news of the close to $40 billion dollar takeover attempt from BHP Billiton, which has issued a press release confirming its intention to make an all cash-offer for the fertilizer maker.

Deere & Co. (NYSE:DE), the largest maker of farm equipment in the world, fell more than 2.5% in pre-market trading after it reported better than expected earnings on revenues that were lower than estimated. Deere posted a profit of $1.44 per share, $0.22 better than consensus; net sales of equipment operations jumped 17.8% year over year to $6.22 billion versus consensus of $6.5 billion. The company issued upside guidance for the current quarter, sees fiscal fourth quarter net sales of equipment operations +32% year over year to $6.24 billion.

Hewlett-Packard (NYSE:HPQ), the largest PC maker in the world, will likely see some volatility, as market participants will adjust their positions in the stock ahead of the tomorrow’s earnings report. Kaufman also lowered its target price on Hewlett-Packard to $51 from $61, reflecting the CEO transition risk and lower market trading multiples. Like with Cisco the key to determine near-term stock direction will be in the conference call and how investors see the tone and the outlook the company provides. On their view, the stock would likely trade sideways on the CEO search overhang. On Average analysts expect Hewlett-Packard to post a profit of $1.08 per share on revenue of $30.36 billion.

Netflix (NASDAQ:NFLX), the online video rental company, fell more than 2% in pre-market trading after it was downgraded to Underperform from Outperform at Morgan Keegan.

Research In Motion (NASDAQ:RIMM), the Blackberry maker, was flat in pre-market trading after Oppenheimer lowered its target price to $58 from $69 citing their checks that signal a mixed reception for the Torch, which they believe it has lackluster specs and performance. Oppenheimer said while the Torch and BlackBerry 6 operating system are improvements versus previous generations and could drive an upgrade cycle within Research In Motion’s customer base, but they see highly unlikely that it would increased share and appeal to the growing iPhone and Android customers. However they see limited downside in the stock near-term as their estimates and the market have anticipated share losses in the smart-phone market.

Target Corp (NYSE:TGT), the Minnesota based general merchandise discount store chain, fell more than 1% in pre-market trading after it reported in-line results. Target posted a profit of $0.92 per share; revenues rose 3.1% year over year to $15.53 billion versus consensus of $15.62 billion. Same store sales climbed 1.7%. The company said the retail segment generated strong profitability, overcoming softer-than-expected sales. Growth in guest traffic and apparel sales remained robust, and teams across continued to exercise thoughtful control of expenses.