Stock Futures Slumped on Weak Jobs Report. Stocks to Watch: AA, AOL, AAPL, BAC, LLY, MSFT, MCP, SNE
Published on Monday, 09 April 2012 07:38 Written by Christopher Lynn
New York, April 9th (TradersHuddle.com) – Stock futures were pointing to a weak open, as investors are set to react to Friday’s weak employment report that spurs worries over the strength of the recovery in the U.S. economy. China added worries over global growth after its inflation data was much hotter than expected, raising concern that policymakers will delay monetary easing policies designed to bolster growth.
In Asia, stocks fell after disappointing economic data. The rate in inflation in China climbed faster than expected, spurring speculation that the government might delay monetary policy easing, while a sharp deceleration in U.S. job growth raised concerns over the strength of the economic recovery in the world’s largest economy. In Japan, the Nikkei fell 1.5%, logging its fifth consecutive loss, and the Shanghai Composite fell 0.9%, led by property shares.
In Europe, markets were closed for Easter Monday, so volume in the U.S. futures has been subdued due to the lack of participation from European investors.
The euro was sliding against the Dollar, trading below the $1.31 level. Crude oil was tumbling 1.58% to $101.68 per barrel. Also in the energy complex, natural gas was falling 0.53% to $2.078 per MMBtu. Gold was climbing 0.67% to $1641 an ounce, and silver was losing 0.38% to $31.61 an ounce. Meanwhile, copper was slumping 1.61%.
On economic News, at 8:30 am the Labor Department will release its Weekly Jobless Claims Report with economists expecting 355,00 initial claims for unemployment benefits. At 10:30 am natural gas inventories will be available.
Today’s Stocks to watch: Alcoa (NYSE: AA), AOL (NYSE: AOL), Apple (NASDAQ: AAPL), Bank of America (NYSE: BAC), Eli Lilly (NYSE: LLY), Microsoft (NASDAQ: MSFT), Molycorp (NYSE: MCP), and Sony Corp. (NYSE: SNE).
Alcoa (NYSE: AA), the aluminum producer, was falling 1.25% to $9.51 amid worries over economic growth, as Chinese inflation might deter policymakers in China to ease monetary policy, and as job growth in the U.S. signals a weaker economic recovery. The stock might still see pressure from last week announcement that it will reduce its annual alumina production capacity by 390,000 metric tons to align production with smelter curtailments the company announced earlier this year and to reflect prevailing market conditions Alcoa is scheduled to unofficially kick off the earnings season tomorrow after the close. On average analysts expect a loss of $0.04 per share on revenues of $5.77 billion.
AOL (NYSE: AOL) was surging 40.5% to $25.88 on news that the company has entered into a definite announcement to sell over 800 of its patents to Microsoft (NASDAQ: MSFT) and to grant Microsoft a non-exclusive license to its retained patent portfolio for $1.056 billion in cash. AOL also received a license to the patents being sold to Microsoft. AOL management and its Board of Directors intend to return a significant portion of the sale proceeds to shareholders and will determine the most efficient and effective method to do so prior to the closing of the transaction.
Apple (NASDAQ: AAPL), the maker of iPads and iPhones, was falling 1.13% to $626.50 after BTIG Research downgraded the stock to a Neutral from Buy. The firm removed its $600 price target, saying that investors should pause to consider the changing dynamics in the post-paid wireless industry, which has seen margins squeezed by the frequent upgrade activity of iPhone customers, the sustainability of a $600 iPhone and possible need for a price cut, and the elevated expectation that the company will deliver another revolutionary product into the market. The view sharply diverts from the majority of firms in Wall Street, which have been boosting their price targets above the $700 level and in some cases above $900 per share. Last Friday, Apple reached a new all-time high of $634.66 after Jefferies raised its target price on Apple to $800 from $699. Earlier last the week, JPMorgan raised its target price to $715 from $625 and Piper Jaffray bumped its target price to $910 from $718. . The firm added that Apple could reach $1000 by 2014, making it the first company to reach a market cap of $1 trillion.
Bank of America (NYSE: BAC) was sliding 2.06% to $9.04 in pre-market, as the stock continues its pullback from the 2012 highs of $10.10. The stock was seeing increased weakness on reaction to the weak employment report released last Friday. The job growth raised worries that the economic pace of recovery might be less than expected, while it might also complicate any housing market attempt to recover. BofA was the best Dow component in the first quarter, as shares surged 72.12%.
Eli Lilly (NYSE: LLY), the pharmaceutical company maker of Prozac, was jumping 0.79% to $40.50 after the company together with Avid Radiopharmaceuticals, Inc., a wholly owned subsidiary of Lilly, announced the FDA approval of Amyvid, a radioactive diagnostic agent indicated for brain imaging of beta-amyloid plaques in patients with cognitive impairment who are being evaluated for Alzheimer's Disease and other causes of cognitive decline. Amyvid binds to amyloid plaques, a hallmark characteristic of Alzheimer's Disease, and is detected using PET scan images of the brain.
Molycorp (NYSE: MCP), the owner of the biggest rare earth reserves in North America, was sliding 0.87% to $32.90 after the company announced that that its proven and probable reserves of rare earth minerals at its Mountain Pass, California facility have increased by 36%. Shares are also likely seeing some reaction from news that China setup a rare earth industry association amid the sharp criticism over unfair export quotas from overseas trade partners.
Sony Corp. (NYSE: SNE), the consumer electronics Company maker of the Playstation and Bravia TVs, will be in focus in the session on reports that the company plans to cut 6% of its global workforce. The company aims to slash about 10,000 jobs as the company looks to return back to profitability. According to Japanese media, half of the jobs cuts would come from consolidating the firm's chemicals and small and midsize LCD operations. Sony shares have climbed 10.9% so far this year.
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