Stock Futures Higher Despite Hopes for Stimulus Eased. Stocks to Watch: AAPL, BAC, COO, FB, MOH, MCP, UAL
Published on Friday, 08 June 2012 07:14 Written by Christopher Lynn
New York, June 8th (TradersHuddle.com) – Stock futures were pointing to a higher open despite weakness in European markets and fading hopes for a new global round of monetary stimulus. Reports that Spain might request bank aid over the weekend, helped refocus investor attention on the deteriorating debt crisis in the euro zone.
In Asia, stocks slumped amid disappointment from Ben Bernanke’s testimony in Capitol Hill, which undermined hopes of strong and swift action from the Fed to prop up the U.S. economy amid the challenges of the debt crisis in Europe and sluggish job growth. The Fed Chairman comments coupled with a downgrade by Fitch of Spain’s credit rating outweighed any positive effect from China interest rate cut. The Nikkei tumbled 2%, while the Shanghai Composite lost 0.5%.
In Europe, markets were giving back gains from the prior session, retreating from a one-week high. Cyclicals stocks were the main drag in the markets, as hopes for additional stimulus from the Fed eased, following his testimony before the Joint Economic Committee in congress. Banks were under pressure amid the deteriorating debt crisis, with additional headlines coming from Spain and its struggling banking system, with Reuters reporting that Spain will request bank aid to the EU as soon as Saturday.
The euro was losing against the Dollar, trading below the $1.25 level. Crude oil was tumbling 2.36% to $82.82 per barrel. Also in the energy complex, natural gas was losing 1.23% to $2.246 per MMBtu. Gold was slumping 0.38% to $1582.00 an ounce, and silver was falling 1% to $28.24 an ounce. Meanwhile, copper was sliding 2%.
On economic data, at 8:30 am, the Commerce Department will release its April Trade Balance figures. At 10 am, April Wholesale Inventories will be available.
Today’s Stocks to watch: Apple (NASDAQ: AAPL), Bank of America (NYSE: BAC), Cooper Companies (NYSE: COO), Facebook (NASDAQ: FB), Molina Healthcare (NYSE: MOH), Molycorp (NYSE: MCP), and United Continental (NYSE: UAL).
Apple (NASDAQ: AAPL), the maker of iPads and iPhones, was sliding 0.3% to $570.01 in pre-market amid weak sentiment being generated on overseas markets. Reports that Apple might seek a legal order to stop the launch of Samsung’s latest Galaxy smartphone later this month, deepening their worldwide patent dispute. Separately, Virgin Mobile, a unit of Sprint Nextel will launch its offering of a pay as you go iPhone on June 29th. Earlier in the week, Canaccord Genuity said that its channel checks indicate that iPhone shipments are inline with its estimate of 27 million units in the quarter, signaling that consumers are delaying purchases in anticipation of the new iPhone 5 later in the year.
Bank of America (NYSE: BAC) was sliding 1.21% to $7.33 in pre-market, extending its loss of 2.9% from the prior session. The stock broke above its 200day moving average at $7.18 on Wednesday amid hopes for stimulus around the world, but was weighed down yesterday by the announcement of the Fed’s new capital rules for banks, which are design to avoid another financial crisis in this country. Financials were also seeing weakness as hopes from swift action from the Fed eased, and on reports that Spain will likely request a bank bailout over the weekend.
Cooper Companies (NYSE: COO) will be in focus after tumbling more than 5% in after hours on negative reaction to quarterly results that missed expectations and to inline earnings and revenue guidance for the full year. Cooper said its GAAP earnings were $1.12 per share, $0.08 lower than consensus, on revenues that climbed 5.9% from a year ago to $344.6 million.
Facebook (NASDAQ: FB), the social media Company, was sliding 0.42% to $26.20 in pre-market. The stock had a sharp reversal on Wednesday after logging a new record low at $25.52, ending with a gain of 3.6% at $26.81. The social media company announced that it’s rolling out its own App Center, so that its nearly 1 billion users can find applications more easily and hopefully they could be matched much better with their interests. The App center, available in the web and on iOS and Android, will recommend apps that have been reviewed by the company and meet its quality standards. Earlier in the week, JMP Securities initiated coverage on the stock with Outperform and a target price of $37.
Molina Healthcare (NYSE: MOH), the managed care company focused on Medicaid and Medicare recipients, was surging 28.7% to $22.87 in pre-market amid news that the company has gained back Ohio Medicaid business. Shares of Molina were hammered in the prior session, plunging more than 31% after the company withdrawn its full-year earnings guidance because of uncertainties about rising medical costs in Texas. Deutsche Bank added to the carnage, as the firm slashed its target price on the stock to $18 from $23.
Molycorp (NYSE: MCP), the owner of the biggest rare earth reserves in North America, will be in focus after losing more than 2% in after hours following an automatic shelf offering of common stock.
United Continental (NYSE: UAL), the owner of the world’s largest airline, will be in focus amid another sharp drop in crude oil prices and after it reported May 2012 operational results. The airline said that revenue passenger miles increased 0.3%, while consolidated capacity increased 0.4% compared with a year ago period. Its consolidated load factor in May 2012 decreased 0.1 points compared to May 2011. Meanwhile, the company's consolidated passenger revenue per available seat mile increased an estimated 0 to 1% from a year ago period. Yesterday, the airline announced a tentative agreement with the Association of Flight Attendants covering flight attendants from the company's Continental subsidiary.
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