Stock Futures Higher on Improved Economic Data. Stocks to Watch: ADBE, AAPL, BAC, BP, DRI, RIMM, SINA, ZNGA

Published on Friday, 16 December 2011 07:46 Written by Christopher Lynn

New York, December 16^th (TradersHuddle.com) – Stock futures were pointing to a higher open, as participants look to end the week in a higher note. Improved economic data in the U.S. yesterday, helped reduce focus in the European debt crisis. The improved morning sentiment came over strength in overseas markets and as the euro appears to have stabilize around the $1.30 level.

In Asia, stocks gained following the better than expected U.S. economic data, which showed weekly jobless claims falling to their lowest level in three and a half years and signaled strength in the world’s largest economy. In Japan, the Nikkei climbed 0.3%, trimming its weekly decline that came as investors continue to worry over the impact of the European debt crisis in the global economy. Meanwhile, in China, stock jumped 2%, snapping a six session losing streak and rebounding from a 33-month low on expectations over possible stock boosting performance measures could be announced later following speculation that the central bank intervened in the currency market, through state banks selling Dollars, which pushed the yuan to a record intraday level.

In Europe, markets started higher led by miners, extending their modest rebound from a weeklong rout; however gains were modest and stocks were starting to drift lower amid renewed rumors of a possible downgrade to Italy and Spain going into the weekend.

The euro was climbing modestly against the Dollar, trading above the $1.30 level. Crude oil was little change at $93.97 per barrel. Gold was gaining 0.94% to $1592 an ounce, while silver was jumping 1.1% to $29.605 an ounce. Meanwhile, copper was gaining 1.7%.

On M&A news, United Rentals (NYSE:URI) said that it agreed to buy RSC Holdings (NYSE:RRR) for about $1.9 billion or $18 per share, a 58% premium over RSC’s Thursday closing price. The deal has been approved by both companies' boards and is expected to be complete in the first six months of next year.

On economic data, at 8:30 am, the Labor Department will release its November Consumer Price Index, which economists expect to come at 0.1%, with core CPI also at 0.1%.

Today’s Stocks to watch: Adobe (NASDAQ:ADBE), Apple (NASDAQ:AAPL), Bank of America (NYSE:BAC), BP (NYSE:BP), Darden Restaurants (NYSE:DRI), Research In Motion (NASDAQ:RIMM), Sina Corp. (NASDAQ:SINA), and Zynga, Inc. (NASDAQ:ZNGA).

Adobe (NASDAQ:ADBE), the document and media software publisher will be in focus after jumping more than 5% in after hours on initial reaction to its quarterly results. The company said that for its fiscal fourth quarter, it earned $0.67 per share, $0.07 better than consensus, on revenues that climbed 14.4% year over year to $1.15 billion. Adobe also issued inline guidance for the current quarter, while for fiscal 2012 the company said it expects earnings in line with consensus on revenues that are above expectations. Adobe has calculated support at $26.25 and resistance at $28.18.

Apple (NASDAQ:AAPL), the maker of iPads and iPhones, was climbing 0.4% to $380.44 in pre-market amid upside momentum. Apple was higher as Research In Motion continues to struggle amid the competition of the Apple iPhone and Google’s Android based smartphones, while delaying its new generation of Blackberrys until late in 2012. Apple is expected to regain the top spot of the largest smartphone maker in the world during the holiday quarter, with analysts expecting for the tech giant to sell more than 30 million iPhones, lifted by strong demand for its new iPhone 4S, which is also ranking high amid the wish lists of U.S. consumers. Apple has lost 3.7% this week and broke below its 50day and 20day moving averages amid jitters from the economic uncertainty stemming from the debt crisis in Europe. The decline came despite analysts warming up to the stock, reiterating their ratings and target prices, citing iPhone 4S strong demand and a possible launch of the iPad 3 in the first quarter next year. Earlier in the week, Bernstein reiterated Apple as its Top Pick with a target price of $575, saying the market has been overly pessimistic on the stock in the recent weeks. And Ticonderoga said that Apple had its best November on record, according to its internal sales barometer. The firm said sales in November jumped 17% month over month. Yesterday, Morgan Stanley named Apple a Long Research Tactical Idea. The stock has calculated support at $363.32 and resistance at $396.41.

Bank of America (NYSE:BAC), the largest U.S. lender, was gaining 1.14% to $5.32 in pre-market despite that late yesterday Fitch downgraded its ratings on eight of the major banks around the world. Bank of America, Barlcays, BNP Paribas, Credit Suisse, Deutsche Bank, Goldman Sachs, Morgan Stanley, and Societe Generale saw their viability ratings cut at the firm. BofA rating was lowered to “bbb” from “a-“. The credit rating agency said that the viability rating for the Charlotte, NC based bank denotes good prospects for ongoing viability. Bank of America was looking to further trim its weekly loss, which came after the stock was under pressure on concern over the debt crisis in Europe. Bank of America has new calculated support and resistance levels, at $5.20 and $5.95, respectively.

BP (NYSE:BP), the London, UK based energy giant, was climbing 0.31% to $41.52 in pre-market on news it has reached an agreement with Cameron International (NYSE:CAM), in which BP will indemnify Cameron for current and future compensatory claims against Cameron associated with the Deepwater Horizon accident and subsequent oil spill. Under the terms of agreement, Cameron agrees to pay $250 million to BP, and both parties have agreed to mutually release claims against each other.

Darden Restaurants (NYSE:DRI), the owner and operator of the Red Lobster and Olive Garden restaurant chains, will be in focus as participants react to the company’s quarterly results. Darden said that it missed earnings expectations on revenues that were inline with consensus. The company earned $0.41 per share, $0.01 better than consensus, on revenues that climbed 6% year over year to $1.83 billion. Darden also issued inline guidance for 2012. Earlier in the month, the company plunged sharply after it issued guidance below consensus and lowered its 2012 guidance.

Research In Motion (NASDAQ:RIMM), the maker of the Blackberry smartphone, was tumbling 9% to $13.76 and trading at new multiyear lows on reaction to its quarterly results and weak outlook. The company posted results that beat on the earnings front but missed on the revenue side, while issuing downside guidance for the current quarter. RIM said it earned $1.27 per share, $0.08 better than consensus, on revenues that fell 5.9% year over year to $5.17 billion. Shares were under heavy pressure, as quarterly profit dropped 27%, while the revenue miss and dismal outlook for the Holiday quarter further disappointed investors. The below consensus outlook for the quarter came after the company said that it expects to ship only 11 to 12 million Blackberrys in the quarter, while it delayed the new generation of Blackberrys until late in 2012. The company highlighted that despite the challenges faced in the quarter, the Blackberry subscriber base grew to nearly 75 million users around the world. Shares of RIM are trading at levels not seen since 2004.

Sina Corp. (NASDAQ:SINA), the Chinese online media company and owner of the Weibo microblogging service commonly referred to as the Twitter of China, was tumbling 6.4% to $49.40, trading at a new yearly low territory, following news that Beijing officials ordered Internet microblogs to require users to register with their real names. The news highlighted the tightening of rules aimed at controlling China's rapidly growing social networks and microblogs, which have been undermining the State grasp of media control. Earlier in the month, Deutsche Bank upgraded the stock to a Buy from Hold. Year to date, the stock has lost 23.3%.

Zynga, Inc. (NASDAQ:ZNGA), the social game developer of popular games like Farmville and Mafia Wars, would make its debut in the NASDAQ. The highly criticized IPO priced at $10 per share, at the high end of the expected range of $8.50 to $10 per share. The 100 million IPO, which values Zynga at $1 billion has been under fire, with analysts on Sterne Agee actually initiating coverage ahead of the IPO with an Underperform rating and a target price of $7.