Stock Futures Lower amid Growth and Euro Zone Worries. Stocks to Watch: AAPL, BAC, CSCO, KSS, NWSA, JWN, PCLN, TSLA
Published on Thursday, 10 May 2012 07:30 Written by Christopher Lynn
New York, May 10th (TradersHuddle.com) – Stock futures were pointing to a lower open ahead of the weekly jobless claims report. Ongoing worries over the European debt crisis, as Greek political uncertainty will likely lead to fresh elections, and weak Chinese trade data weighed on markets around the world, which weighed on Wall Street’s sentiment ahead of fresh economic data.
In Asia, the weakness continued after weak Chinese trade data added to the growth slowdown worries, which coupled with jitters over the uncertainty in the euro zone undermined risk appetite. The Shanghai Composite added 0.1% after trade data showed that growth in imports unexpectedly stalled in the month of April, climbing 0.3%, well blow the 11% growth rate that was widely expected. In Japan, the Nikkei fell 0.4% amid the concerns over global growth and euro zone instability.
In Europe, markets were struggling after hitting a four month low in the prior session. Participants were considering the attractiveness of cheaper equities amid concerns over global growth and the ongoing jitters over the region’s sovereign debt crisis. Despite stocks trading at attractive valuations, participants were unsure on committing capital as policy makers in the euro zone struggle to restore confidence on their ability to contain the debt crisis.
The euro was adding against the Dollar, but still trading below the $1.30 level. Crude oil was losing 0.58% to $96.25 per barrel. Also in the energy complex, natural gas was climbing 0.65% to $2.48 per MMBtu. Gold was dropping 0.41% to $1587.6 an ounce, and silver was losing 0.70% to $29.035 an ounce. Meanwhile, copper was retreating 0.14%.
On economic data, at 8:30 am the Labor Department will release its Weekly Jobless Claims Report, with economists expecting 365,000 initial claims for unemployment benefits filed last week. At the same time, U.S. trade data will be available. At 9:30 am Fed Chairman Ben Bernanke is scheduled to speak, and at 10:30 am the Energy Department will release its Weekly Inventory Report on Nat Gas. In the afternoon, at 1 pm, results from the 30-year Treasury Bond Auction will be available and at 2 pm the Treasury will release its April budget data, which is expected to be positive at $58 billion, the first positive data point in over three years.
Today’s Stocks to watch: Apple (NASDAQ: AAPL), Bank of America (NYSE: BAC), Cisco Systems (NASDAQ: CSCO), Kohl’s (NYSE: KSS), News Corp. (NASDAQ: NWSA), Nordstrom (NYSE: JWN), Priceline.com (NASDAQ: PCLN), and Tesla Motors (NASDAQ: TSLA).
Apple (NASDAQ: AAPL), the maker of iPads and iPhones, was adding 0.34% to $571.06 in pre-market as the stock appears to have stabilized in the prior sessions, challenging its 50day exponential moving average around the $572 area. According to reports, Apple will likely launch its iPhone 5 in September, a 10-inch iPad in the foruth quarter and a 7-inch iPad in August. Reuters is reporting this morning that Apple and Foxconn, the Chinese supplier, will share the costs on factory improvements that will address the criticism over labor conditions in China.
Bank of America (NYSE: BAC), a proxy for the U.S. economy and one of its largest lenders, was climbing 0.52% to $7.77 in pre-market ahead of weekly jobless claims data. According to the MACD, negative momentum appears to have bottom after several weeks that took the stock to a sharp correction from its 2012 high above $10 per share. The stock has support at its declining 200day moving average, currently around the $7.29 area, while its 50day moving average is at $8.73, will act as resistance.
Cisco Systems (NASDAQ: CSCO), the networking giant, was tumbling 7.93% to $17.29 in pre-market, a new low in 2012, as the company disappointed investors with a weak outlook. Cisco Systems posted a profit of $0.48 per share, excluding non-recurring items, $0.01 better than consensus, on revenues that were inline with consensus climbing 6.6% from a year ago period to $11.59 billion. In its conference call, the company management provided a weak outlook for the current quarter, as it expects revenue growth of 2.5% versus consensus of 7.1%, while Cisco expects EPS in a range of $0.44 to $0.46 versus consensus of $0.49. Mizuho lowered its target price to $20 from $24.
Kohl’s (NYSE: KSS), the family oriented department store, will be in focus in the session after its quarterly results beat earnings expectations on revenues that were inline with consensus and its pre-announcement. The company provided downside earnings and inline revenue guidance for the current quarter, while reaffirming its fiscal 2013 EPS guidance. Kohl’s said it earned $0.63 per share, $0.02 better than consensus, on revenues that climbed 1.9% from a year ago period to $4.24 billion.
News Corp. (NASDAQ: NWSA), the media company owner of the Fox News Channel and the Wall Street Journal, will be in focus after its quarterly results topped expectations. The company earned $0.37 per share, $0.06 better than consensus, on revenues that climbed 1.8% from a year ago period to $8.4 billion, which was above consensus of $8.25 billion. News Corp has been on the headlines all this year amid the phone tapping scandal in the U.K.
Nordstrom (NYSE: JWN), the upscale department store operator, will be in focus in the session ahead of the company reporting its quarterly results after the closing bell. On average analysts expect a profit of $0.75 per share on revenues of $2.52 billion.
Priceline.com (NASDAQ: PCLN), the name your price online travel company, was 4.29% to $688.10 in pre-market following negative reaction to its quarterly results and guidance. The company posted better than expected earnings with revenues meeting consensus, while the travel reservation site issued inline guidance for the current quarter. The results were not bad, but failed to meet the heightened expectations particularly on the revenue side. Priceline said it earned $0.48 per share, $0.30 better than consensus, on revenues that jumped 28.1% from a year ago period to $1.04 billion. Some analysts discussed before the report that if the company failed to reach near 40% revenue growth, its shares might suffer.
Tesla Motors (NASDAQ: TSLA), the solely electric power train automaker, was jumping 5.79% to $31.80 in pre-market after the company’s quarterly results missed expectations, but announced that its initial Model S deliveries will begin in June. Tesla reported a loss of $0.76 per share, $0.07 worse than expected, on revenues that fell 38.4% from a year ago period to $30.2 million. The company said that have nearly completed all regulatory approvals and certifications required to begin delivery of Model S to customers in the United States. Thus, anticipate that initial deliveries will begin in June, 1 month ahead of the original announced schedule.