New York, April 2nd (TradersHuddle.com) – Stock futures were pointing to a lower open following mixed PMI data overseas. Chinese official PMI was better than expected, while euro zone manufacturing data showed a contraction for an eighth month and at a faster pace in March, adding to signs the bloc is in recession as the downturn spread to core members France and Germany.
In Asia, most stocks moved to the upside after a better than expected Chinese official PMI. The reading on manufacturing activity showed the index at an 11-month high of 53.1 in March, well above the widely expected figure of 50.5 and higher than February’s 51. However, there was controversy as the HSBC PMI showed contraction, posting a 48.3 figure, down from the 49.6 figure that was posted last month. HSBC said that differences between the numbers stem from China's release not being seasonally adjusted and that the official release is tilted towards large business versus HSBC's broader landscape. In Japan, the Nikkei climbed 0.26% after the Tankan survey suggested muted growth this month, as companies are still worried about the yen strength despite recent weakness. The Shanghai Composite closed the session with a 0.47% gain.
In Europe, markets were trading mixed at the start of the second quarter, with participants noting the surprisingly strong Chinese official PMI. However, undermining the strength of the data was HSBC’s figure showing a contraction and lackluster data PMI data in Europe. France posted its worst PMI figure in 32 months with a reading at 46.7, while the U.K. posted its best reading in 11 months and Germany was slightly higher than expected. The broad euro zone PMI was inline with expectations.
The euro was sliding against the Dollar, trading above the $1.33 level. Crude oil was losing 0.33% to $102.68 per barrel. Also in the energy complex, natural gas was slumping 0.28% to $2.12 per MMBtu. Gold was dropping 0.23% to $1668 an ounce, and silver was adding 0.10% to $32.515 an ounce. Meanwhile, copper was jumping 0.75%.
On economic News, at 10 am the Institute for Supply Management will release its reading for March’s manufacturing index. At the same time, construction-spending data will also be available.
Today’s Stocks to watch: Apple (NASDAQ: AAPL), Avon Products (NYSE: AVP), Bank of America (NYSE: BAC), Global Payments (NYSE: GPN), Groupon (NASDAQ: GRPN), Illumina (NASDAQ: ILMN), Las Vegas Sands (NYSE: LVS), Total S.A (NYSE: TOT), and Wynn Resorts (NASDAQ: WYNN).
Apple (NASDAQ: AAPL), the maker of iPads and iPhones, was climbing 0.2% to $600.75 in pre-market. The stock pulled back from an all-time high of $621.45 amid reports of labor violations at its supplier Foxconn, which pledged over the weekend to keep raising salaries at its Chinese factories and hire more workers to reduce the hours of work and overtime. Last week, ThinkEquity joined the numerous brokerage houses boosting its estimates and target prices for the stock. The firm bumped its target price to $700 from $600.
Avon Products (NYSE: AVP), the direct seller of beauty and related products, was surging 25.26% to $24.15 on news that Coty Inc will acquire the company for $23.25 per share in cash. Coty believes that its proposed price is a full and fair one, based on public information about Avon, and it is prepared to consider increasing its price if Avon can demonstrate through diligence that there is greater value.
Bank of America (NYSE: BAC) was sliding 0.63% to $9.51 in pre-market, extending its last week drop of 4.4%. The stock pulled back from an intraday high of $10.10 after Robert W. Baird downgraded the stock to a Neutral. The downgrade was the sixth this year, with the firm setting its target price at $10 per share, which seems to be the medium term ceiling for it after seeing a sharp rise this quarter. BofA surged 72.12% during the first quarter.
Global Payments (NYSE: GPN), the provider of credit card, check, and e-Commerce transactions processing, will be in focus as the company missed earnings expectation on revenues that were inline with consensus. The $0.01 per share earnings miss came after Friday’s news of a data breach. According to the company, the breach was confined to North America and less than 1,500,000 card numbers may have been exported. Global Payments said that the investigation to date has reveled that only the numbers were compromised and the criminals did not obtain cardholder names, addresses, and social security numbers. Reaction from the credit card companies were just starting, with Visa announcing overnight that it has eliminated Global Payment from its list of its approved providers.
Groupon (NASDAQ: GRPN), the daily deals site, was tumbling 10.23% to $16.50 in pre-market after the company reduced its revenue reported for the fourth quarter due to customer returns. The Benchmark Company reduced its target price to $28 from $32 and Bank of America Merrill downgraded the stock to a Neutral rating.
Illumina (NASDAQ: ILMN), the provider of tools for DNA, RNA, and protein analysis, was tumbling 2.11% to $51.50 on reports that Roche, the Swiss pharmaceutical giant, might drop its bid to acquire the company. Last week, Roche raised its bid by 15% to $51 per share, as the Swiss drug maker was looking at the Illumina acquisition as a way to tailor medicines to individual patients.
Total S.A (NYSE: TOT), the global, integrated energy company based in France, was climbing 1.02% to $51.64 in pre-market after announcing over the weekend that flare caused by a natural gas leak at a platform in the North Sea has gone out, reducing the threat of explosion. Last week, the stock closed with a loss of 5.4%, as it was under pressure since news of the leak were first reported.
Wynn Resorts (NASDAQ: WYNN), the luxury casino operator, will be in focus after the Macau Gaming Inspection and Coordination Bureau reported March gross gaming revenue climbed 24.4% from a year ago period to 25.0 bln patacas. Last year, March showed a growth of 48%. Year to date, Macau gaming revenue is up 27%, with 2012 expected to show significant slower growth rates than previous years. Wynn generated about 78% of its adjusted EBITDA and about 74% of its net revenue in the last quarter in Macau.
Rival Las Vegas Sands (NYSE: LVS), the owner and operator of casino resorts and convention centers in the U.S., Macau, and Singapore, will likely see some reaction to Macau’s gaming data in March. The company generated about 43% of its adjusted EBITDA and about 52% of its net revenues in the last quarter in Macau.
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