Stock Futures Struggle on GE Revenue Miss. Stocks to Watch: AAPL, BAC, GE, GOOG, INTC, IBM, MSFT, SLB

Published on Friday, 20 January 2012 07:46 Written by Christopher Lynn

New York, January 20^th (TradersHuddle.com) – Stock futures were pointing to mixed open, amid mixed overseas action resulting from sluggish factory activity in China and as Greece and private bondholders continue to negotiate a debt swap deal to avoid a disorderly default. Weak earnings from economic bellwether General Electric also weighed on sentiment.

In Asia, stocks climbed to a 2-month high after the solid bond auctions in the euro zone, which showed strong demand, helped ease worries over the massive refinancing cycle faced by euro zone countries and particularly the periphery. There was a clear appetite for risk, which was also boosted by upbeat earnings reports and economic data in the U.S. However tempering the move higher was the HSBC flash manufacturing purchasing managers index in China, which showed industrial activity in January stood at 48, a slight improvement from the prior month, but still signaling contraction, nevertheless the Shanghai Composite gained 1%, while in Japan, the Nikkei jumped 1.5%, with financial shares among the top performers.

In Europe, equity markets were struggling after hitting a 5½-month high in the prior session, reaching technical resistance and overbought territory. Weighing on participants willingness to commit new or to add to their positions before the weekend were worries over whether and agreement for a debt swap between Greece and private bondholders can be reached. Miners and other cyclicals were underperforming on the session reacting to the sluggish Chinese factory activity.

The euro was pulling back 0.4% against the Dollar, trading just above the $1.29 level. Crude oil was losing 0.66% to $99.73 per barrel, extending its decline from the prior session, which came after bearish inventory data. Gold was falling 0.46% to $1646.9 an ounce and silver was dropping 0.34% to $30.405 an ounce. Meanwhile, copper was sliding 1.17%.

On economic news, at 10 am the December Existing Home Sales will be released, with analysts expecting a reading of 4.55 million.

Today’s Stocks to watch: Apple (NASDAQ: AAPL), Bank of America (NYSE: BAC), General Electric (NYSE:GE), Google (NASDAQ: GOOG), Intel (NASDAQ: INTC), International Business Machines (NYSE: IBM), Microsoft (NASDAQ: MSFT), and Schlumberger (NYSE: SLB).

Apple (NASDAQ: AAPL), the maker of iPads and iPhones, was falling 0.29% to $426.5 in pre-market, after pulling back in the prior session from a new all-time high of $431.37. A German court ruled in favor of Apple in a patent suit over mobile technologies, in which Apple claimed that Samsung infringed 13 patents. According to the ruling, only one of those patents was found to be in infringement. FBR Capital initiated coverage on Apple with Outperform and a target price of $500; earlier in the week, RBC Capital bumped its target price to $525 from $500, citing their expectations of a first quarter beat and healthy guidance for the second quarter. The firm expects the tech giant to have shipped 32 million iPhones during the Holiday quarter. Apple is schedule to reports its quarterly results next Tuesday after the close, with analysts on average expecting a profit of $10.03 on revenues of $38.78 billion. The highest estimate is for Apple to earn $11.45 per share.

Bank of America (NYSE: BAC) was falling 0.57% to $6.92 in pre-market, after in the prior session the stock pullback from an intraday high of $7.29 to close below the $7 mark and its calculated resistance at $7.02. Barclays added to the weakness by cutting its target price to $10 from $11. Yesterday, the company posted a decent earnings report, with inline EPS and revenues above consensus.

General Electric (NYSE:GE), the diversified conglomerate maker of power turbines and medical devices, was tumbling 3.6% to $18.46 on initial reaction to its earnings report. The company posted a profit of $0.39 per share, excluding non-recurring items, $0.01 better than consensus. Revenues fell 7.9 year over year to $37.97 billion, significantly below consensus of $40.08 billion. GE noted that revenues were negatively impacted by currency exchange, lower ending net investment at GE Capital, and slower growth in Europe. Last week, Barclays raised its target price on GE to $22 from $20.

Google (NASDAQ: GOOG), the owner of the largest Internet search engine, was tumbling 8.12% to $587.62 in pre-market on reaction to an earnings miss. The company posted earnings that fell short of estimates on both the top and bottom lines. Google said it earned $9.50 per share, excluding non-recurring items, $0.95 worse than consensus, on revenues that jumped 27.6% year over year to $8.13 billion versus consensus of $8.41 billion. Google noted impressive performance from Android, reaching over 11 billion downloads, while it said that its search business was strong and display saw revenue growth. It did experience currency exchange impact quarter over quarter, while noting that North America said slight decreases quarter over quarter and Europe was steady, but saw a revenue growth slowdown in Germany. Earlier in the week, Wells Fargo downgraded the stock to Market Perform from Outperform. Google’s 200day moving average at the $578-$580 level will likely come into play in the session.

Intel (NASDAQ: INTC), the largest chipmaker in the world, was climbing 0.47% to $25.75 in pre-market, trading near calculated resistance at $25.92 on reaction to a better than earnings report and inline first quarter guidance. Intel said that it earned $0.68 per share, excluding non-recurring items, $0.04 better than consensus, on revenues that jumped 22% year over year to $13.9 billion versus consensus of $13.72 billion. Intel noted growth in annual revenue of more than $10 billion, smashing earnings and revenue records. The company said that it has a strong product pipeline for the current year, with the ultrabook systems, data center security, and the introduction of Intel-powered smartphones and tablets.

International Business Machines (NYSE: IBM), the IT solutions and consulting services provider, was jumping 1.96% to $184.05 following positive reaction to its better than consensus earnings report and guidance. IBM said it earned for the quarter $4.71 per share, $0.09 better than consensus, on revenues that climbed 1.6% year over to $29.49 billion, inline with expectations. The company also provided upside guidance for full year 2012, saying it sees EPS of $14.85. Year to date, the stock had fell 1.83% and it has calculated support at $177.35, while resistance is at $188.71.

Microsoft (NASDAQ: MSFT), the world’s largest software publisher, was jumping 2% to $28.70 in pre-market, trading above calculated resistance at $28.19, following a positive reaction to its quarterly results. The company was able to beat earnings consensus, while reporting inline revenues for the quarter. Microsoft said that it earned $0.78 per share, $0.02 better than consensus, on revenues that climbed 4.7% year over year to $20.89 billion. FBR Capital bumped its target price on the stock to $30 from $28.

Schlumberger (NYSE: SLB), the provider of oilfield services to the international petroleum industry, was falling 0.22% to $72.70 amid lower oil prices and on reaction to its earnings report. Schlumberger said it earned $1.11 per share, $0.02 better than consensus, on revenues that jumped 21% year over year to $10.97 billion versus consensus of $10.75 billion. The company said that uncertainty remains over the outlook for 2012 due to the continuing sovereign debt crisis in Europe, which places downward pressure on GDP and oil demand forecasts.