Stock Futures Higher amid EU Contagion Fears. Stocks to Watch: AAPL, BAC, F, FCX, HNZ, HPQ, MRVL, CRM

Published on Friday, 18 November 2011 07:45 Written by Christopher Lynn

New York, November 18^th (TradersHuddle.com) – Stock futures were pointing to a higher open despite weak performance on overseas markets amid ongoing fears of contagion in the euro zone. The ECB apparently stepped up buying efforts in Italian and Spanish debt, helping ease yields from the critical 7% threshold. Both euro and commodities were seeing a rebound early on.

In Asia, stocks closed the week lower, falling for the fourth straight day, as European debt woes intensified, as Spanish bond yields jumped to critical levels that threaten the ability for the country to fund itself and as premiums for funding in Dollars continued to move to the upside. The Nikkei 1.2%, closing at its lowest level in more than a month, while the Shanghai Composite tumble 1.9% to its lowest level since late October. Property shares led the declines in China, following data that showed home prices dropped in October for the first time this year.

In Europe, equity markets were extending their decline, logging a 5-week low. Mounting fears of contagion in the euro zone weighed, despite the ECB stepping up its buying program of Italian and Spanish bonds, with yields easing from levels near the critical threshold of 7%. Uncertainty in the political spectrum continues in the euro zone, as now Spain goes to the polls over the weekend in an environment where bond yields and credit default swaps have increased to record highs.

The euro was rebounding, trading above the 1.35 level. Crude oil was gaining 0.38% to $99.2, while Brent was jumping 0.94% to $109.24 per barrel. Gold was adding 0.58% to $1730.2 an ounce, while silver was rebounding 1.82% to $32.07 an ounce, after the sharp 7% drop in the prior session. Meanwhile, copper was adding 0.76%.

On economic news, at 10 am, October Leading Economic Indicators will be released.

Today’s Stocks to watch: Apple (NASDAQ:AAPL), Bank of America (NYSE:BAC), Ford Motor (NYSE:F), Freeport McMoRan (NYSE:FCX), Heinz (NYSE:HNZ), Hewlett Packard (NYSE:HPQ), Marvell Technology (NASDAQ:MRVL), and Salesforce.com (NYSE:CRM).

Apple (NASDAQ:AAPL), the maker of iPads and iPhones, was climbing 0.74% to $380.20, rebounding from the prior session. Yesterday, Oppenheimer cut its estimates on the tech giant, with the firm citing a more cautious iPad ramp that reflects product cycle, macro headwinds and rising competition, from the likes of Amazon’s Kindle Fire. Oppenheimer also slashed its iPad shipment forecast for the holiday quarter by 2 million units, while cutting its 2012 EPS estimates to $3.64, just shy of consensus of $3.65. Also a survey show that the Apple iPhone is gaining ground in the important business segment, with more workers using the device. Last week, Cleveland Research slashed its iPad shipment forecast and Apple earnings estimates. Apple has lost 1.9% so far this week.

Bank of America (NYSE:BAC), the largest U.S. lender, was climbing 0.86% to $5.85 in pre-market, with shares rebounding from the prior session. Jitters over the debt crisis in Europe and raising borrowing costs for several of the countries in the euro zone will continue to add some concern and weigh on performance of the U.S. banking space, especially after Fitch warning that it might lower the outlook for U.S. banks on risk of contagion if the EU debt crisis does not get resolved in a timely manner. Anticipation over S&P updating its credit ratings on the major global banks within 3 weeks will likely continue to build, with some expecting that some downgrades could be looming, including one for Bank of America. Earlier in the week, regulatory fillings showed that hedge fund manager John Paulson added 4 million shares of BofA to his portfolio.

Ford Motor (NYSE:F), the Dearborn, MI based automaker, was adding 1.28% to $10.30 in pre-market despite Ticonderoga cutting its full year 2011 EPS estimates further below consensus to account for deferred tax assets, including the new UAW contract, under operating results. Ticonderoga said that Ford remains its Top Pick in the auto sector, while reiterating its target price of $22. The firm added that near term concerns over Europe will continue to weigh on performance, but North American Auto has been operating at near-record levels despite below trend demand totals and analysts expect that since the company’s restructuring is completely, the company could move toward reinstating a Dividend soon.

Freeport McMoRan (NYSE:FCX), the world’s largest publicly traded copper producer, was jumping 2.09% to $37.60 in pre-market amid a rebound from both the euro and commodities, with copper moving to the upside. Freeport tumbled more than 3.6% in the prior session. For the week, the stock has tumbled 7.6%.

Heinz (NYSE:HNZ), the ketchup and other processed food maker, was falling 0.61% to $52.50 in pre-market on initial reaction to its quarterly results that beat on the earnings front, but missed on the revenues side. Heinz said profit was $0.81 per share, $0.01 better than consensus, on revenues that climbed 8.3% year over year to $2.83 billion. The company reaffirmed its guidance for fiscal 2012, seeing EPS in the range of $3.24 to $3.32.

Hewlett Packard (NYSE:HPQ), the world’s largest PC maker, was jumping 2.24% to $27.90 in pre-market, after the company announced that it has gave a board seat to Hedge Fund Relational Investors, by naming Ralph Whitworth to its now expanded board. Relational is known as an activist investor and based on the latest regulatory filing the fund owns close to 1% of the company. The ISI Group reiterated its Bu rating and target price of $32, citing that the company’s decision to appoint Relational’s Whitworth to the board was the right move, and one that should provide credibility. The company is scheduled to report on Monday after the close, with analysts on average expecting a profit of $1.13 per share on revenues of $32.06 billion. HP has calculated support at $26.25 and resistance at $28.59. The stock has tumbled 35% year to date.

Marvell Technology (NASDAQ:MRVL), the maker of integrated circuits for communications-related markets, will be in focus after jumping 3.2% to $14.20 in extended hours following reaction to its better than expected results, driven by Mobile and Wireless end market, which grew over 20% sequentially. Marvell posted earnings of $0.40 per share, $0.01 better than consensus, on revenues that fell 1% year over year to $950 million. Gross Margins fell sequentially to 56.8% for the quarter. Marvell has calculated support at $13.26 and resistance at $15.17.

Salesforce.com (NYSE:CRM), the provider of Internet based customer relationship management software, was tumbling 7.13% to $117.10 in pre-market, trading below calculated support at $125.05, after the company results and guidance failed to impress participants, as there was some concern over lighter than expected deferred revenues, with quarterly billings missing some analyst estimates.. The company posted a profit of $0.34 per share, $0.03 better than consensus, on revenues that jumped 36.2% year over year to $584.3 million versus consensus of $571.94 million. Salesforce issued somewhat inline EPS guidance for the current quarter on revenues that were above consensus. For fiscal 2013, the company issued upside revenue guidance of $2.88 to $2.90 billion. The stock has its 52-week low at $109.22, which was posted in late August.