Stock Futures Higher on Greek Optimism. Stocks to Watch: AMZN, AAPL, BAC, XOM, MCP, PFE, RSH, S, X

Published on Tuesday, 31 January 2012 07:54 Written by Christopher Lynn

New York, January 31^st  (TradersHuddle.com) – Stock futures were pointing to a higher open amid optimism that Greece should be able to reach a deal with its private creditors this week. The advance in pre-market was coming amid gains in overseas markets and a flurry of corporate quarterly results.

In Asia, stocks ended mostly higher on the back of optimism that Greece could reach a deal with its private bondholders to restructure its debt this week. Better than expected data out of Japan also helped with the advance. In Japan, Industrial Production, Household Spending, and Vehicle Production beat expectations, but the Unemployment gained unexpectedly, putting a cap on advances. Meanwhile, in China, the Shanghai Composite climbed 0.3% amid caution ahead of potentially weak corporate results.

In Europe, markets were moving to the upside, rebounding from yesterday’s sharp losses after Greece said that it might reach a deal on the debt swap plan with private creditors this week. The gains also came after EU leaders at the summit in Brussels agreed on stricter budget discipline in the region and signed off on the permanent bailout fund.

The euro was gaining 0.4% against the Dollar, trading close to the 1.32 level. Crude oil was jumping 1.49% to $100.25 per barrel. Gold was adding 0.47% to $1742.5 an ounce and silver was gaining 0.81% to $33.80 an ounce. Meanwhile, copper was climbing 1.02%.

On economic news at 8:30 am, the fourth quarter Employment cost Index will be released. At 9 am, the November S&P Case-Shiller 20-City Home Price Index will be available, while at 9:45 the January Chicago PMI reading will be released. And at 10 am January Consumer Confidence data will be available.

Today’s Stocks to watch: Amazon.com (NASDAQ: AMZN), Apple (NASDAQ: AAPL), Bank of America (NYSE: BAC), Exxon Mobil (NYSE: XOM), Molycorp (NYSE: MCP), Pfizer (NYSE: PFE), RadioShack (NYSE: RSH), Sprint Nextel (NYSE: S), and U.S. Steel (NYSE X).

Amazon.com (NASDAQ: AMZN), the largest online retailer, was gaining 1.22% in pre-market, as the stock will be in focus ahead of the release of its quarterly results scheduled after the closing bell. Participants will pay close attention to the results too see the growth in its Kindle line, including the Fire, as it should have chipped at the Apple iPad share due to its competitive pricing. On average analysts expect a profit of $0.19 per share on revenues of $18.2 billion. Last quarter, the company missed earnings expectation by 42%, as it earned $0.14 per share, with Amazon taking charges due to increased investment in its growth. Yesterday, Stifel Nicolaus raised its revenue estimates for the quarter and beyond, due largely to success of Kindle and Kindle Fire, which have become the third major ecosystem after iOS and Android. The firm said that the ecosystem have created significant strategic value.

Apple (NASDAQ: AAPL), the maker of iPads and iPhones, was gaining 0.66% to $455.98, trading above its all-time high of $454.45, which was posted after the tech giant posted record shattering quarterly results. According to reports, the CEO of Dixon Stores, Europe’s second largest electronic goods retailer was leaving the company in April to join Apple as senior vice president of retail, as Apple will be replacing Ron Johnson, who left Apple last year to become JC Penny’s CEO. Yesterday, a bullish research note from Morgan Stanley helped the stock in a down market. The firm speculated the tech giant could sell 40 million iPhones in China during 2013. Morgan Stanley said that it sees $10 per share upside to Apple’s profit in calendar 2013, as the company adds China Telecom and China Mobile to the existing iPhone carrier China Unicom.

Bank of America (NYSE: BAC) was gaining 1.27% to $7.16 in pre-market, rebounding from its 3% tumble in the prior session. The optimism in Europe over a possible Greek deal with private bondholders this week was providing a lift to the financial sector. Guggenheim also lifted shares as it raised target prices of several banks. The firm said that it was moving its target price on BofA to $9 from $6.50. Yesterday, Goldman Sachs downgraded Bank of America to a Neutral from Buy.

Exxon Mobil (NYSE: XOM), the U.S. largest energy producer, will be in focus after it releases its quarterly results later this morning. The company results will likely raise eyebrows due to the massive quarterly revenues. Concern over the downstream business had weighed on shares ahead of the results. Yesterday, the company announced the sale of its Japanese operations for $3.9 billion to TonenGeneral Sekiyu KK. On average analysts expect a profit of $1.95 per share on revenues of $119.7 billion.

Molycorp (NYSE: MCP), the owner of the world’s largest non-Chinese rare earth metals deposits, was jumping 2.2% to $31.80 in pre-market. China lost an appeal with the World Trade Organization over several raw materials; the WTO said China violated rules of trade by restricting exports; however rare earth metals were not part of the ruling, allowing China to continue with its stranglehold on rare earths. Last week, the company jumped on a rumor that China will grant the company its first ever rare-earth mining license to a foreign company.

Pfizer (NYSE: PFE), the world’s largest pharmaceutical company, was climbing 0.93% after posting an earnings beat on its first quarterly results since its blockbuster drug Lipitor lost patent protection. Pfizer said that it earned $0.50 per share, $0.03 better than consensus, on revenues that fell 3.5% year over year to $16.75 billion, inline with consensus.

RadioShack (NYSE: RSH), the consumer electronics goods retailer, was plunging 19.65% to $8.22, trading below the stock’s 52-week low of $9.15, after the company issued fourth quarter EPS guidance well below consensus on revenues that will be slightly above consensus. The retailer said that it sees EPS of $0.11-0.13 versus consensus of $0.36 on revenues of $1.39 billion. Comparable store sales for co-operated stores increased about 2% during the 2011 fourth quarter. Consolidated gross profit as a percent of net sales in the 2011 fourth quarter is expected to have decreased year over year to about 35% versus 41% for the same period in the prior year. Margin compression reflects a shift in mix within mobility sales towards certain lower margin smartphones and mobile devices; a higher percentage of mobility sales in the overall revenue mix, largely driven by the company's expansion of Target mobile centers; and the impact of a more promotional holiday season. RadioShack cited that its results for the fourth quarter are due in large part to the underperformance of the Sprint (NYSE: S) postpaid wireless business and reflect further unanticipated changes in Sprint's customer and credit models.

Meanwhile, shares of Sprint Nextel (NYSE: S) were falling 1.39% to $2.13 following the comments from RadioShack, as the changes in Sprint's customer and credit models resulted in fewer new and upgrade activations and a sequential and year over year decline in Sprint postpaid revs in during the quarter.

U.S. Steel (NYSE X), the integrated steel maker, was falling 0.8% to $28.50 after reporting a wider than expected loss. The company said it loss for the quarter $1.14 per share, $0.30 worse than consensus, on revenues that climbed 12.1% year over year to $4.82 billion. U.S. Steel expects to report a significant improvement in its operating results in the first quarter as compared to the fourth quarter, mainly driven by improved average realized prices and shipments for its Flat-rolled segment.