Stock Futures Jump after Chinese Rate Cut. Stocks to Watch: AGU, AAPL, BHI, BAC, FB, FCX, SJM, LULU, MW, NAV
Published on Thursday, 07 June 2012 07:47 Written by Christopher Lynn
New York, June 7th (TradersHuddle.com) – Stock futures jumped following news that China’s central bank cut its key interest rate by 25 basis points, boosting hopes that policymakers will spring into action to prop up the global economy amid the impacts of a deteriorating euro zone debt crisis.
In Asia, most stocks gained after reports that European policymakers were working on a plan to help struggling Spanish banks amid growing expectations for central banks around the world to provide further stimulus to compensate for the debt crisis in the euro zone and the slew of weakening economic data. The Nikkei jumped 1.2%, advancing for the third straight day, while the Shanghai Composite slid 0.71% after erasing earlier gains, weighed down by concerns over a slowing economy.
In Europe, markets were trading higher amid ongoing speculation that a plan to prop up the embattled euro zone economy, while capitalizing ailing Spanish banks will soon be unveiled. Participants remained cautious amid reports that Greece faces a massive cash crunch and might need to tap the funds provided by the Troika to capitalize its banks. Adding to the positive momentum, speculation continued over further stimulus by the Fed and other central banks around the world, with China providing ammunition for the bulls after it announced an interest rate cut.
The euro was climbing against the Dollar, trading above the $1.25 level. Crude oil was jumping 1.15% to $86.00 per barrel. Also in the energy complex, natural gas was losing 0.91% to $2.399 per MMBtu. Gold was slumping 0.43% to $1627.10 an ounce, and silver was adding 0.13% to $29.525 an ounce. Meanwhile, copper was advancing 0.3%.
On economic data, at 8:30 am, the Labor Department will release its weekly jobless claims report. At 10 am, Fed Chairman Ben Bernanke will provide testimony on the economy and monetary policy in front of the joint economic committee in Capitol Hill. At 10:30, the Energy Department will release natural gas inventory figures and at 3 PM consumer credit data will be available.
Today’s Stocks to watch: Agrium (NYSE: AGU), Apple (NASDAQ: AAPL), Baker Hughes (NYSE: BHI), Bank of America (NYSE: BAC), Facebook (NASDAQ: FB), Freeport McMoRan (NYSE: FCX), J. M. Smucker (NYSE: SJM), lululemon athletica (NASDAQ: LULU), Men’s Warehouse (NYSE: MW), and Navistar International (NYSE: NAV).
Agrium (NYSE: AGU), the producer of major agricultural nutrients, will be in focus after the company announced a 122% increase to its semiannual dividend to $0.55 per share from $0.225. The company said that the increase reflects strength in its earnings outlook across both Retail and Wholesale operations and how its growth strategy has continued to deliver results for the benefit of shareholders.
Baker Hughes (NYSE: BHI), the solutions provider for the oil and gas industry, will be in focus after reporting its operational rig count for May 2012. The company said that the average U.S. rig count for the month was 1,977, up 16 from the 1,961 counted in April 2012 and up 141 from the 1,836 counted in May 2011. The average Canadian rig count for May 2012 was 133, down 25 from the 158 counted in April 2012 and down 11 from the 144 counted in May 2011. Its International rig count was 1255, up from 1178 counted in April. The stock lost more than 1% in the prior session following Halliburton’s earnings warning amid weakness in its North American market.
Apple (NASDAQ: AAPL), the maker of iPads and iPhones, was climbing 0.81% to $576.10 in pre-market, trading near its calculated resistance at the $581.50 level and its 50day moving average at $584.88. According to reports, Apple is attempting to block the sales of Samsung’s latest Galaxy smartphones in the U.S., deepening their worldwide patent dispute. The tech giant asked a federal judge in San Jose, California, to include the Galaxy S III in its request to block sales of Samsung products in the U.S., according to a June 5 filing by the company.
Bank of America (NYSE: BAC) was jumping 1.75% to $7.75 in pre-market, extending its break out above its 200day moving average at $7.18. The stock is reacting positively after news of the Chinese interest rate cut and will be in focus amid weekly jobless claims data and Ben Bernanke’s testimony later in the day. The stock surged more than 7% in the prior session amid speculation of stimulus measures from central banks around the world amid a slew of signs of a slowing global economy.
Facebook (NASDAQ: FB), the social media Company, was climbing 1.08% to $27.10 in pre-market. The stock had a sharp reversal in the prior session after logging a new record low at $25.52, ending with a gain of 3.6% at $26.81. Yesterday, JMP Securities initiated coverage on the stock with Outperform and a target price of $37.
Freeport McMoRan (NYSE: FCX), the world’s largest publicly traded copper producer, was jumping 2% to $34.35 in pre-market along with other commodity related names after China’s central bank cut its key interest rate by 25 basis points to 3.25%, as it tries to compensate for signs of an slowing economy. Copper prices cut their earlier losses in more than half, following the Chinese news on speculation of higher future demand from the world’s largest user of the base industrial metal.
J. M. Smucker (NYSE: SJM) was climbing 0.79% to $76.65 after the company beat earnings expectations on revenues that were inline with consensus, while providing downside earnings guidance and upside revenue guidance for fiscal 2013. The company reported a profit of $1.10 per share, $0.12 better than consensus, on revenues that climbed 14.2% from a year ago to $1.36 billion.
lululemon athletica (NASDAQ: LULU), the designer and retailer of athletic apparel, was tumbling 12.9% to $60.32 after the company reported quarterly results that beat expectations, but provided downside guidance for the current quarter and fiscal 2013. Lululemon said it earned $0.32 per share, $0.02 better than consensus, on revenues that surged 52.9% from a year ago to $285.7 million.
Men’s Warehouse (NYSE: MW), the specialty retailer of casual and formal apparel for men, was plunging nearly 19% to $28.82 after its quarterly results and guidance, both disappointed investors. The company missed earnings expectations on revenues that missed consensus, while issuing downside earnings guidance for the current quarter and reaffirming its earnings guidance for fiscal 2013. Men’s Warehouse said it earned $0.53 per share, $0.01 worse the consensus, on revenues that climbed 1.1% from a year ago to $586.6 million.
Navistar International (NYSE: NAV), the maker of medium and heavy-duty trucks, was tumbling 4% to $27 in pre-market after the company reported results that missed on the top line. Navistar said that it lost $1.99 per share, which might not be comparable to a consensus estimate of $0.68, on revenues that fell 1.7% from a year ago to $3.3 billion. The company stated that the second quarter loss was driven by higher warranty and engine certification speculation.
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