Stock Futures Lower amid Earnings on EU Jitters. Stocks to Watch: AAPL, BAC, COH, CSX, DD, TXN, TRV, YHOO

Published on Tuesday, 24 January 2012 07:40 Written by Christopher Lynn

New York, January 24^th  (TradersHuddle.com) – Stock futures were pointing to a lower open on a busy earnings reporting day amid increased EU jitters. Reports that Portugal might need a new bailout and prospects for a messy Greek default, as euro zone finance ministers rejected proposals made by Greece’s private creditors.

In Asia, stocks ended near the unchanged line after pulling back from earlier gains following news reports that Portugal might need additional bailout funds and as Greek debt swap talks stalled. In Japan, the Nikkei added 0.22%, with Toyota Motors (NYSE: TM) jumping 2.7% on heavy volume thanks to growing optimism on the U.S. market. China, Hong Kong, South Korea, Singapore and Malaysia remained closed for the Lunar New Year holidays.

In Europe, equity markets were falling over worries of a disorderly Greek default after talks on the Greek debt swap plan stalled, as euro zone finance ministers rejected private creditors demands for a 4% coupon on the longer dated bonds that are expected to be issued in exchange for current Greek debt in order to avoid a messy default. Banks were the worst performers so far, giving back most of its rally in the prior session, on worries over further write downs due to their exposure to euro zone peripheral debt.

The euro was falling 0.15% against the Dollar, trading just about the $1.30 level. Crude oil was falling 0.32% to $99.26 per barrel. Gold was losing 0.46% to $1670.5 an ounce and silver was sliding 0.06% to $32.25 an ounce. Meanwhile, copper was dropping 0.43%.

Today’s Stocks to watch: Apple (NASDAQ: AAPL), Bank of America (NYSE: BAC), Coach (NYSE: COH), CSX Corp (NYSE: CSX), DuPont (NYSE: DD), Texas Instruments (NYSE: TXN), Travelers (NYSE: TRV), and Yahoo! (NASDAQ: YHOO).

Apple (NASDAQ: AAPL), the maker of iPads and iPhones, was falling 0.15% to $426.75 in pre-market. The stock will be in focus as participants adjust positions ahead of the company’s quarterly results scheduled for after the closing bell. Many analysts expect Apple to report record earnings and revenues on the back of record iPhone shipments during the holiday quarter. Yesterday, Brigantine Advisors was the latest of the brokerage houses to increase its target price to $500 from $450 ahead of the earnings report. Last 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. On average analysts expect a profit of $10.03 on revenues of $38.78 billion. The highest estimate is for Apple to earn $11.45 per share. Ticonderoga also just raised its first quarter estimates ahead of the earnings report. The firm has expectations for stronger than expected iPhone 4S sales and healthy iPad 2 demand for the holidays, partially offset by weaker Mac shipments. It raised its fiscal first quarter revenue projection to $39.39 billion and increased its EPS estimate to $10.15. Apple for the year has climbed 5.53% and has posted a new all-time high of $431.37.

Bank of America (NYSE: BAC) was falling 2.07% to $7.10 in pre-market amid downside moves in financial shares in Europe on stalled Greek debt swap talks and concern over Portugal needed another bailout. The stock rallied yesterday to the top of both the Dow Jones Industrial Average and the financial sector on the back of a report that cited Germany and France to be calling to relax global capital rules. BofA closed the session at $7.25, near its calculated resistance at $7.29. Last week, the company posted a decent earnings report, with inline EPS and revenues above consensus. Bank of America is so far the best Dow component for the year, with shares surging 30.4%.

Coach (NYSE: COH), the leading American designer and maker of luxury lifestyle handbags and accessories, will be in focus during the session, as participants react to its better than expected results. The company said that it earned $1.18 per share, $0.03 better than consensus, on revenues that climbed 14.6% year over year to $1.45 billion versus consensus of $1.43 billion. During the quarter, gross profit increased 14% to $1.05 billion. Meanwhile, gross margin remained strong on a year-over-year basis at 72.2% compared to 72.4% in the prior year.

CSX Corp (NYSE: CSX), the provider of rail, intermodal and domestic container shipping, was falling 1.59% to $22.33 in pre-market following negative reaction to an earnings miss. The company said that it earned $0.43 per share, $0.01 worse than consensus, on revenues that climbed 4.8% year over year to $2.95 billion versus consensus of $3 billion. CSX also announced the appointment of a new Chief Financial Officer and a new Chief Marketing Officer.

DuPont (NYSE: DD), the life sciences company and third largest U.S. chemical maker, will be in focus after the Dow component reported its quarterly results. DuPont posted earnings that beat expectations on revenues that missed estimates, while reaffirming its fiscal 2012 EPS guidance. The company said it earned $0.35 per share, excluding non-recurring items, $0.02 better than consensus, on revenues that climbed 13.8% year over year to $8.43 billion versus consensus of $8.53 billion. DuPont said that destocking in photovoltaics, polymer and industrial supply chains, as well as weaker demand for products supplying consumer electronics and construction drove volume declines in all regions. Meanwhile, agriculture volume increased, primarily reflecting growth and penetration in the Latin American summer season.

Texas Instruments (NYSE: TXN), the maker of digital signal processing (DSP) and microcontroller (MCU) semiconductors, will be in focus, as shares jumped 3.5% in extended hours following better than expected quarterly results. Texas Instruments earned $0.48 per share, $0.09 better than conensus, on revenues that fell 3% year over year to $3.42 billion versus consensus of $3.26 billion. The company also issued inline revenue guidance for the quarter, with EPS on a range of $0.26 to $0.34 per share. Year to date Texas Instruments has jumped 14%. Last week, Needham downgraded the stock to a Hold from Buy.

Travelers (NYSE: TRV), the property and casualty insurer, will be in focus as investors react to the company’s earnings miss. Travelers said that it earns $1.48 per share, $0.02 worse than consensus on revenues of $6.4 billion, which were up 1% sequentially. Net premiums written climbed 0.5% year over year to $5.26 billion. Travelers said that higher pricing continued in all segments and accelerated in Business Insurance. The higher pricing is expected to result in improved underlying underwriting margins in first half of 2012. The company Repurchased 20.9 million shares for $1.2 billion during fourth quarter.

Yahoo! (NASDAQ: YHOO), the Internet media company that owns the second largest search engine, was falling 0.26% to $15.64 in pre-market. The stock will be in focus, as participants will likely adjust positions ahead of its quarterly earnings report scheduled for after the close. On average analysts expect a profit of $0.24 per share on revenues of $1.19 billion. The highest analyst estimate is for Yahoo to earn $0.28 per share, while the lowest is $0.21 per share. Jerry Yang, Yahoo’s co-founder, resigned to all of its positions in the company, including his seat on the board of directors earlier in the year, which prompted fresh speculation of a deal or M&A that will unlock near-term shareholder value.