New York, May 30th (TradersHuddle.com) – Stock futures were under pressure amid weakness in overseas markets. Concerns over Spain’s struggling banking system and its elevated bond yields were dragging on the euro and spurring a risk off trade. Hopes over a fresh Chinese stimulus eased, adding downward pressure to equities and commodities. However news that the European Commission said that the region must move towards a banking union and issue euro bonds moved futures off its lows of the morning.
In Asia, stocks retreated amid fears over Spain’s banking system and that borrowing costs will climb to unsustainable levels. Hopes for additional stimulus in the Chinese economy provided some level of support, limiting the losses. The Nikkei snapped its four session winning streak, while the Shanghai Composite lost 0.21% as hopes for a new stimulus program eased.
In Europe, markets were trading sharply lower, heading to a third straight month of losses, as Spain was now the main drag. Concern over Spain’s struggling banking system and rising borrowing costs weighed heavily on sentiment. Participants worried that Spain banking system will need funds and that this will stretch even more the country’s finances, while hopes for a new stimulus in China eased on reports that the government might be more cautious with its program. The European Commission said the euro zone must move towards a banking union, issue eurobonds and boost growth while cutting debt, which helped provide some support and spur a slight rebound on the euro and equities.
The euro was falling against the Dollar, trading below the $1.25 level. Crude oil was losing 1.4% to $89.52 per barrel. Also in the energy complex, natural gas was tumbling 2.9% to $2.413 per MMBtu. Gold was sliding 0.05% to $1550.20 an ounce, and silver was sliding 0.67% to $27.605 an ounce. Meanwhile, copper was slumping 1.43%.
On economic data, at 10 am, April Pending Home Sales figures will be released.
Today’s Stocks to watch: Apple (NASDAQ: AAPL), Bank of America (NYSE: BAC), Exxon Mobil (NYSE: XOM), Facebook (NASDAQ: FB), Research In Motion (NASDAQ: RIMM), The Fresh Market (NASDAQ: TFM), and Yingli Green Energy (NYSE: YGE).
Apple (NASDAQ: AAPL), the maker of iPads and iPhones, was falling 0.70% to $568.25 in pre-market amid the weak tape. The stock traded above its 20day moving average and jumped 1.8% in the prior session amid reports over a trial production run of a Apple TV set at its Chinese manufacturing partner Foxconn. On the AllThingsD Conference, Apple CEO Tim Cook said that Apple TV is an intense focus for the company. He added that Apple’s relationship with Facebook is solid and that he has great appreciation for the company. For the month of May, the stock is down about 2%.
Bank of America (NYSE: BAC) was losing 1.21% to $7.34 in pre-market amid the ongoing fears over the Spanish banking system. The stock rallied nearly 4% in the prior session, breaking out above its 200day moving average at the $7.18 area. The rally came despite data showed that home prices in the 20 major metropolitan areas hit a new post crisis low and consumer confidence declined to its lowest level in four months even as gas prices eased.
Facebook (NASDAQ: FB), the social media Company, was losing 1.59% to $28.38 in pre-market after plunging 9.6% in the prior session, breaching the $30 level. The botched IPO has impacted many investors that were hurt by the falling price amid concerns over valuation. Bloomberg has a report in which discusses the possibility of Facebook shares dropping another 20% or about $23 per share, amid ongoing concerns over its valuation. Yesterday, Credit Agricole initiated coverage on the struggling stock with a Buy rating.
Exxon Mobil (NYSE: XOM), the largest U.S. energy producer, was falling 0.52% to $81.50 as crude oil prices tumble below $90 per share amid euro weakness and as gas prices were also slumping nearly 3% this morning. European debt crisis worries, particularly Spain, and diminished hopes over a stimulus in China was hitting crude oil prices and was spurring a move to risk off assets, including the Dollar.
Research In Motion (NASDAQ: RIMM), the maker of the Blackberry smartphone, was tumbling 5.6% to $10.60 after the company provided a business update. RIM said that financial performance would continue to be a challenge in the coming quarters, as it also sees a fiscal first quarter operating loss. The company hired JPMorgan & RBC to assit in the review of the business and financial performance. In after hours, the stock plunged more than 10% on initial reaction to the news.
The Fresh Market (NASDAQ: TFM), the specialty grocery chain, will be in focus after its quarterly results topped expectations and it issued inline EPS guidance for fiscal 2013. The company said it earned $0.40 per share, $0.05 better than consensus, on revenues that jumped 22.8% from a year ago to $324.8 million.
Yingli Green Energy (NYSE: YGE), the China based photovoltaic modules maker, was climbing 1.5% to $2.80 in pre-market after the company lost more than expectated but revenues were above consensus, while it reaffirmed its fiscal 2012 shipment guidance. Yingli said it lost $0.24 per share, $0.03 worse than consensus, on revenues that fell 5.2% from a year ago to $500 million.
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