Stock Futures Higher after Holiday Weekend. Stocks to Watch: AAPL, BAC, FB, FCX, JPM, MCP, RA, SAFM

Published on Tuesday, 29 May 2012 07:31 Written by Christopher Lynn

New York, May 29^th (TradersHuddle.com) – Stock futures were trading higher as investors returned from the long holiday weekend. Speculation over a possible fresh stimulus program in China was providing support to overseas markets and helping commodities despite weakness in the euro and ongoing fears over the deteriorating debt crisis in Spain.

In Asia, stocks gained as participants bid up beaten down stocks. European jitters continued, placing a cap on gains as the euro weakened on a surge in Spain’s borrowing costs and the uncertainty over Greece leaving the euro zone amid numerous reports of member states having contingency plans discussions. The Nikkei gained 0.74% amid hopes that China might launch a stimulus program to avoid a hard landing. In China, the Shanghai Composite jumped more than 1% on a report that stated that the Chinese government’s push to accelerate investment in infrastructure has started to improve loan demand.

In Europe, markets were struggling as hopes for further Chinese stimulus were offset by increased fears over Spain’s deteriorating banking system. Mining stocks were benefiting from speculation over an increase in future demand if China launches a new stimulus program. Meanwhile, Spain’s banking system continued to struggle amid the country’s high unemployment levels, lack of economic growth, and falling home prices. Spain’s benchmark bond yields remained at elevated levels, raising speculation over the possible need of a bailout.

The euro was falling against the Dollar, but still trading below the $1.26 level. Crude oil was gaining 0.37% to $91.20 per barrel. Also in the energy complex, natural gas was tumbling 3% to $2.491 per MMBtu. Gold was adding 0.29% to $1573.50 an ounce, and silver was sliding 0.18% to $28.335 an ounce. Meanwhile, copper was advancing 0.78%.

On economic data, at 9 am the Case Shiller – S&P Home price 20-city Index will be released and at 10 am May Consumer Confidence data will be available.

Today’s Stocks to watch: Apple (NASDAQ: AAPL), Bank of America (NYSE: BAC), Facebook (NASDAQ: FB), Freeport McMoRan (NYSE: FCX), JPMorgan (NYSE: JPM), Molycorp (NYSE: MCP), RailAmerica (NYSE: RA), and Sanderson Farms (NASDAQ: SAFM).

Apple (NASDAQ: AAPL), the maker of iPads and iPhones, was climbing 0.66% to $566 in pre-market, trading above its 20day moving average at the $563 area, amid reports that the company together with its Chinese manufacturing partner Foxconn are at trial production stage for an Apple TV set. Separately, rival Samsung electronics will launch its new Galaxy S3 model in Europe, aiming to widening the gap with the iPhone maker. Samsung surpassed Apple as the number one maker of smartphones in the world. Last week, Apple jumped 6% as it extended its rebound from May lows.

Bank of America (NYSE: BAC) was climbing 0.70% to $7.20 in pre-market, trading above its 200day moving average at $7.18. Last week, the stock traded above the key 200day level, but was not able to hold the breakout; however, the stock logged a gain of 1.85% in the week despite getting downgraded to Underperform at JMP Securities and rival JPMorgan announcing that it was suspending its stock repurchase program to boost its capital position to comply with Basel III. Data regarding housing prices and consumer confidence will likely have an effect in the stock and the sector.

Facebook (NASDAQ: FB), the social media Company, was losing 2.22% to $31.20 in pre-market after plunging 16.5% last week following its IPO fiasco. The stock suffered the losses amid reports of receiving some support from lead underwriter Morgan Stanley late in the day of a couple of sessions. Facebook options will start trading today, allowing equity holders to be able to complement their positions. Separately, according to a report, Facebook might try again to build its own smartphone, which the company might launch next year. Meanwhile there is market chatter that Facebook is on discussions to acquire Norwegian firm Opera Software for its advanced mobile phone software technology.

Freeport McMoRan (NYSE: FCX), the world’s largest publicly traded copper producer, was climbing 0.43% to $32.55 pre-market as copper prices moved higher on speculation over a new stimulus program in China to help the country avoid a sharp slowdown. The increase in infrastructure spending will likely generate increased demand from the world’s largest user of the basic industrial metal.

JPMorgan (NYSE: JPM) will be in focus amid reports that the bank sold $25 billion in securities in order to generate gains and partially offset the trading losses incurred this quarter by the “London Whale”. According to the reports, the lender will generate about $0.16 per share in profits after tax, or $620 million. JPMorgan’s sales of profitable securities might impact the future earnings potential for the bank, as it merely shifts gains from the balance sheet to the income statement.

Molycorp (NYSE: MCP), the owner of the biggest rare earth reserves in North America, was rallying 4.85% to $21.20 in pre-market after Dahlman Rose boost its target price to $55 from $50. The firm raised its target price based on the anticipated closure of the company's deal with Neo Materials. The firm likes the downstream processing assets the company acquired and believes that earnings will be more stable throughout the cycle because of this acquisition.

RailAmerica (NYSE: RA) will be in focus after a Bloomberg report speculates that the stock can gain another 30% as a takeover target despite hitting an all-time high last week. The railroad company said on May 22^nd that its holding talks with third parties over the potential sale of the company.

Sanderson Farms (NASDAQ: SAFM), the chicken and food processor, will be in focus in the session after the company topped earnings and revenue expectations this morning. Sanderson Farms said it earned $1.04 per share, $0.19 better than consensus, on revenues that jumped 24.1% from a year ago to $595 million. The company said that demand for remains steady and noted that profitability continues to be impacted by soft demand from casual dining customers and from high feedstock, which despite a decrease in the quarter remain at historical elevated levels.