Stock Futures Gain on Alcoa and China Easing Hopes. Stocks to Watch: AA, AAPL, BAC, JNPR, LIZ, NFLX, SNX, JNY

Published on Tuesday, 10 January 2012 07:32 Written by Christopher Lynn

New York, January 10^th (TradersHuddle.com) – Stock futures were pointing to higher open after Alcoa better than expected revenues and improved outlook boosted sentiment. Weak trade figures in China, which showed that exports and imports grew at their slowest pace in more than two years in December, actually helped equity markets amid hopes that it will bolster the case for the Chinese government to further ease its monetary policy.

In Asia, stocks made solid gains in the session despite weak Chinese trade data, which in turn spurred on speculation that the Chinese Government will relax monetary policy; however worries over upcoming sovereign debt auctions in the euro zone kept participants cautiously optimistic.  In China, the Shanghai Composite jumped 2.7%, posting its third consecutive day of gains, as participants believe that the recent weaker than expected economic figures will boost the chances for easing of the tight monetary policy in order to contain the slowdown of the second largest economy in the world.  Meanwhile in Japan, the Nikkei surged close to 3%, also boosted after the mixed Alcoa (NYSE:AA) results, in which the U.S. Company beat revenue expectations.

In Europe, equity markets were trading higher, posting solid gains. Miners were leading the advance on the back of hopes that China will relax monetary policy to spur demand and economic growth and after Alcoa’s better than expected revenue improved sentiment about the demand outlook for commodities.

The euro was moving higher against the Dollar, but still trading below the $1.28 level. Crude oil was jumping 1.35% to $102.68 per barrel. Gold was climbing 0.99% to $1624 an ounce and silver was rallying 2.15% to $29.40 an ounce. Meanwhile, copper was gaining 1.29%.

On economic news, at 10 am the November Wholesale Inventories Figures will be available.

Today’s Stocks to watch: Alcoa (NYSE:AA), Apple (NASDAQ:AAPL), Bank of America (NYSE:BAC), Juniper Networks (NASDAQ:JNPR), Liz Clairborne (NYSE:LIZ), Netflix (NASDAQ:NFLX), Synnex (NYSE:SNX), and The Jones Group (NYSE:JNY).

Alcoa (NYSE:AA), the aluminum producer, was adding jumping 2.28% to $9.64 in pre-market, extending it 2.9% gain from the prior session and trading above calculated resistance at $9.50. The company posted mixed quarterly results, with revenues beating expectations, while providing a robust outlook for the global aluminum market. Alcoa posted a loss of $0.03 per share, excluding non-recurring items, $0.02 worse than consensus, on revenues that climbed 6.0% year over year to $5.99 billion. The company forecast that global aluminum demand will grow 7% in 2012 and expects that the global aluminum market to turn into a deficit this year as Chinese demand remains robust and output falls. Last Friday, the stock was hit more than 2% after the company announced that it would be cutting global smelting capacity by 12%, citing high costs and falling prices.

Apple (NASDAQ:AAPL), the maker of iPads and iPhones, was gaining 0.78% to $425 in pre-market. The stock logged a new all-time high of $427.75 in the prior session before reversing and closing with a slight loss. Apple received a boost from both Goldman Sachs and Needham, which bumped estimates ahead of what is expected by many analysts to be a blow out quarter, with Apple likely posting record quarterly results on record iPhone and Mac shipments. Yesterday, Goldman Sachs bumped its target price to $550 from $520, citing upside in the December quarter and better than expected results in 2012; while Needham maintained its Buy rating and target price of $540, citing blow out iPhone sales. The firm raised its EPS estimate to $10.85 for the quarter from $9.55. For the full year Needham said that Apple should earn $38.70 on revenues of $151.95 billion. Last week, The ISI Group raised its estimates on Apple, citing better than expected iPhone and iPad units and a robust product pipeline in 2012. Canaccord Genuity also noted that its checks indicate record iPhone December quarter sales. The firm estimates that Apple sold 12 million iPhones in the quarter in the U.S. market, with AT&T selling 6 million, Verizon 4 million, and Sprint 2 million. Cannacord said that it expects EPS at $10.75 on revenue of $41.3 billion.

Bank of America (NYSE:BAC) was jumping 2.39% to $6.42 in pre-market, trading above calculated resistance at $6.35 and at the highest levels so far this year. Improved market sentiment after the Alcoa results was helping riskier assets, like economic sensitive stocks. According to reports the company is cutting a fifth of its managing directors in Asia, looking to trim cost amid a less robust growth outlook in the region. BofA has gained 12.8% so far this year, as participants embraced last year’s worst Dow performer amid improved economic data and subdued worries over a bank collapsing in the euro zone.

Juniper Networks (NASDAQ:JNPR), the provider of Internet infrastructure solutions, was trading flat in pre-market after dropping 4% in extended hours following the lowered company guidance. Juniper said that it now expects that its fourth quarter results would be well below consensus and prior outlook primarily due to weaker than expected router demand from service providers. The company sees EPS of $0.26 to $0.28 versus consensus of $0.34 on revenues of $1.11 to $1.12 billion versus consensus of $1.19 billion. In the prior session, Juniper was one of the top performers in the S&P 500, as shares rallied more than 5%.

Liz Clairborne (NYSE:LIZ), the designer and marketer of a global portfolio of retail-based premium brands including Juicy Couture, Kate Spade, and Lucky Brand Jeans, was tumbling 4.33% in pre-market after the company lowered its EBITDA guidance and announced the departure of its CEO late yesterday. Liz Clairborne said that it expects pro-forma adjusted EBITDA, excluding foreign currency transactions, to be in the low end of the previously guided range of $80 to $90 million for fiscal 2011, citing negative comps and lower than planned gross margins at Juicy Couture. The company is also revising its fiscal 2012 adjusted EBITDA forecast, as it now expects it to be in the range of $125 to $140 million, compared to the prior range of $130 to $150 million. Liz will officially change its name May 15^th 2012 to Fifth & Pacific Companies.

Netflix (NASDAQ:NFLX), the online video rental subscription service, was falling 2.22% to $96 in pre-market, with the stock trimming some of the outsized gains it has seen in the prior sessions after Bank of America Merrill downgraded the stock to Underperform. Netflix has soared 41.7% so far this year, as participants embraced one of the least loved stocks from last year amid M&A chatter and positive comments from its CEO Reed Hastings and Fund Manager Whitney Tilson. Yesterday, the stock surged to the top of the S&P 500, with a 13.7% gain, after the company launched its streaming its streaming service in the United Kingdom and Ireland, highlighting international growth prospects, CEO Reed Hastings said in an interview that U.S. subscriber growth is back in positive territory, while commenting on 2012 profitability. And after Hedge Fund Manager Whitney Tilson said on Fast Money Half-Time Report that he is still long the stock with a multiyear horizon. Mr. Tilson noted that the stock overreacted to the downside last year, it has plenty of rumors of a takeover or a merger, international growth, and U.S. subscriber growth.

Synnex (NYSE:SNX), the IT design-to-distribution business process services Company, will be in focus during the session, as participants adjust their positions ahead of its quarterly results after the close. Synnex on average is expected to post a profit of $1.14 per share on revenues that are expected to jump 16.5% year over year to $2.82 billion. Last quarter, the company posted a 20% upside earnings surprise, as it earned $1.07 per share. The stock closed above its calculated resistance at $31.43 in the prior session and last week, Raymond James raised its target price on Synnex to $36 from $33.

The Jones Group (NYSE:JNY), the apparel and footwear designer and marketer of brands like Nine West, Easy Spirit, Jones New York, and Evan-Picone, will likely be under pressure in the session, as the company lowered its fourth quarter guidance below consensus and expects first quarter and fiscal 2012 revenues also below consensus. The Jones Group lowered its fourth quarter revenue to a range of $892 to $895 million versus consensus of $936.71 million. The company is also estimating that Adjusted and reported gross profit margin will be at 35.75%.