Stock Futures Higher on EU Summit Optimism. Stocks to Watch: ANN, AAPL, BAC, C, DG, NKE, RRC, SMG, TLB

Published on Wednesday, 07 December 2011 07:43 Written by Christopher Lynn

New York, December 7^th (TradersHuddle.com) – Stock futures were pointing to a higher open as the S&P warning to the euro zone nations was seen as a push for leaders to come up with bold measures to tackle the crisis. The growing optimism ahead of the EU summit at the end of the week was spurring a risk on trade, with European shares also resuming their rally.

In Asia, stocks finished higher. Participants speculated that after the S&P warning of a possible downgrade to practically the entire euro zone it would pressure EU leaders to agree on bold and convincing actions to tackle the debt crisis when they meet later this week. A report from the Financial Times stating that one of the measures is the introduction of an additional bailout fund improved sentiment, helping the Nikkei end at a 4-week high, with cyclical shares helping the index to the upside. Meanwhile, Australia saw a better than expected third quarter GDP figure.

In Europe, markets were trading higher resuming their rally and hitting a 5-week high on growing optimism that a EU summit later this week will yield bold and decisive measures that will calm and reassure participants that the debt crisis will be solved. Portugal had a 3-month T-bills auction, which resulted in a slightly lower yield than in the prior auction. UK industrial and manufacturing production missed expectations, which weighed some in the FTSE.

The euro was lower against the Dollar, trading below the 1.34 level. Crude oil was higher by 0.08% to $101.36 per barrel. Gold was falling 0.03% to $1731.3 an ounce, while silver was losing 0.35% to $32.63 an ounce. Meanwhile, copper was adding 0.34%.

On economic data, at 10:30 am the Energy Department will release its weekly crude oil and distillates inventory. At 2 pm, October Consumer Credit figures will be available, with analysts expecting the data point at $7 billion.

Today’s Stocks to watch: Ann, Inc (NYSE:ANN), Apple (NASDAQ:AAPL), Bank of America (NYSE:BAC), Citigroup (NYSE:C), Dollar General (NYSE:DG), Nike (NYSE:NKE), Range Resources (NYSE:RRC), Scotts Miracle-Gro (NYSE:SMG), and Talbots (NYSE:TLB).

Apple (NASDAQ:AAPL), the maker of iPads and iPhones, was adding 0.2% to $391.75 in pre-market, as the stock continues to trade around the 50day moving average at the $391 level. Yesterday, Cannnacord Genuity reiterated its Buy rating on Apple after the firm bumped its iPhone shipment estimates to 30.5 million units, as its checks indicate strong global iPhone sales with Apple gaining share against Android in both the U.S. and Western Europe. Cannacord however cut its view of the iPad, saying it expects 13 million units to be sold in the holiday quarter, down from 14 million it previously expected.  The firm said that the lower numbers come as inventory is being drained on expectations of a new iPad in March and increased competition in the low-end side from Amazon’s Kindle Fire. Apple was also named as one of Bank of America Merrill favorite stocks for 2012. The firm has a price target of $515 per share, as it remains positive on Apple’s growth potential given its potential to add share on both the PC and smartphone markets. Bank of America Merrill said that the valuation is compelling, particularly with the upside potential in revenues and earnings growth in the Mac and iPhone segments. Meanwhile, Oppenheimer said that its wireless checks indicate strong demand for the iPhone 4S, which will spill over into the next quarter and would likely drive muted March seasonality and possible upside for the stock, which is its top pick in the space. Apple has calculated support at $363.32 and resistance at $396.41.

Citigroup (NYSE:C), the global diversified financial firm, was climbing 0.50% to $29.90 in pre-market following its announcement yesterday that it will be cutting 4,500 jobs of its global workforce of about 267,000 employees. The lender said at the Goldman Sachs Financial Services Conference that it would take a $400 million charge this quarter to account severance and other expenses related to the layoffs. Growing optimism over Europe was also helping the stock in the early going.

Rival Bank of America (NYSE:BAC), the largest U.S. lender, earlier this year announced its own plans to cut 30,000 jobs worldwide, while cutting annual expenses by $5 billion. BofA was climbing 0.69% to $5.82 in pre-market on improved sentiment in Europe ahead of the EU summit. Yesterday at the Goldman Sachs Financial Services Conference, CEO Brian Moynihan said that the company’s investment banking results have improved from the third quarter, in which trading revenue dropped to $1.07 billion. Bank of America has rebounded 15.5% from its yearly low of $5.03 logged last week on the back of improved U.S. economic data and the coordinated central bank action designed to boost liquidity and support the global financial system

Dollar General (NYSE:DG), the operator of discount retail stores, was falling 0.58% to $39.40 in pre-market following the pricing of 25 million shares of common stock from existing shareholders at $39 per share. The stock was upgraded to a Buy from Hold at Deutsche Bank.Yesterday, RBC Capital Markets raised its target price on Dollar General to $48 from $45 after the retailer posted strong third quarter results and said that sales trends in November got off to a good start.

Nike (NYSE:NKE), the athletic footwear and apparel giant, will likely have an upside bias, as the stock was added to the Top Picks Live list at Citigroup. Nike has a gain of 12.7% year to date and has calculated support at $89.79 and resistance at $97.50.

Range Resources (NYSE:RRC), the independent oil and gas Company, will be in focus after the company reported that it has reached its Marcellus Shale exit target of 400 Mmcfe per day. Range Resources also said that In addition to achieving its Marcellus production target, the company has accomplished a number of objectives, which will facilitate its continued ramp up of Marcellus Shale production in 2012 and beyond. These accomplishments include increasing firm transportation capacity and firm sales arrangements to 650 Mmcf per day, increasing natural gas processing capacity in the southwestern portion of the play to 435 Mmcf per day, and executing the first ethane extraction and sales contracts. Range has calculated support at $63.65 and resistance at $73.74.

Scotts Miracle-Gro (NYSE:SMG), the largest marketer of branded consumer lawn and garden products in the world, will likely see downside pressure after the company reiterated its fiscal 2012 outlook, while issuing fiscal first quarter downside guidance. The company sees a bigger loss than consensus with a range of -$1.25 to -$1.20 per share on revenues of $200 million versus consensus of $234.93 million.

Talbots (NYSE:TLB), the specialty retailer of apparel and accessories for women, was soaring 78.85% to $2.79 in pre-market after the company received an unsolicited letter from Sycamore Partners proposing to acquire all outstanding common stock for $3.00 per share. Peers like Ann, Inc (NYSE:ANN) could see also an increased buying interest following the offer.