Pre-Market Update – Gapping Stocks ( RIMM, BBY, NFLX, CAT, AMZN )

Published on Wednesday, 14 December 2011 07:30 Written by Danny Miller

  New York, Dec 14^th (TradersHuddle.com) – US stock futures were pointing for a mixed open early Wednesday morning as investors digest the Federal Reserve’s statement keeping the interest rates unchanged and providing a tepid outlook. The headlines and concerns overseas with the European debt crisis continues to haunt the market, with Italy bonds for example trading at record yields and the euro hitting a new 11 month low versus the Dollar.

No easy resolution to the debt woes is perceived by the market, which will continue its selling pressure until the uncertainty levels subdue.

Here are some notable stocks in pre-market action.

Research In Motion (NASDAQ:RIMM) will remain in focus today with the company preparing to report quarterly earnings tomorrow after the bell. Analysts are expecting for RIM to report a profit $1.19 a share with sales reaching $1.74 billion reflecting a continuous reduction of market share. Wall Street has mark Research In Motion as a toxic investment with its stock correcting more than 75% year to date on poor outlook and growth prospects.

Best Buy (NYSE:BBY) is trading flat ahead of the open with the selling pressure from yesterday’s sell-off likely to be continued into today’s session. Best Buy stock lost over 15% yesterday after the company reported earnings that missed estimates and showed tepid sales ahead of the Thanksgiving shopping season. Best Buy reported a profit of 47 cents a share versus 51 cents being expected by Wall Street analysts, the company also had a reduction on its profit margins from 3.2% a year ago to 2.7% this year.

Netflix (NASDAQ:NFLX) volatility continues with the stock moving high percentage moves on speculation that the company might be acquired. Netflix business model sustainability has been questioned by the markets as growth prospects are not there and most importantly raising cost on streaming content affect the company’s bottom line. Netflix price action was able to get above its 20 day moving average for the first time in several months.

Caterpillar (NYSE:CAT) is trading lower in pre-market action with its stock flirting with breaking below its 20 day moving average. Caterpillar stock hit resistance close to the $98 level coinciding with its 200 day moving average. Caterpillar announced that it was going to sell a part of its Bucyrus distribution business to Malaysia's Sime Darby for about $360 million.

Amazon.com (NASDAQ:AMZN) is also feeling selling pressure following the tepid results from Best Buy with its price action approaching its low from August. Amazon coverage was resumed by Goldman Sachs with a Neutral rating yesterday, which added to the stock woes. Amazon has been on a well defined downtrend for the last 3 months since it reached its 52 week high in October at $246.