Stock Futures Lower amid EU Debt Woes. Stocks to Watch: BUD, AAPL, BAC, FB, ISRG, RIMM, TSLA, YELP
Published on Monday, 25 June 2012 07:33 Written by Christopher Lynn
New York, June 25th (TradersHuddle.com) – Stock futures were pointing to a lower open after a volatile last week, as European debt crisis woes was hampering risk appetite. Poor performance in overseas markets, as Spain officially asked for funds to bailout its struggling banks, coupled with muted expectations for the EU summit this week were spurring a safe haven trade into the Dollar, which in turn was pressuring equities and commodities.
In Asia, stocks fell at the start of a new trading week amid concerns over a slowdown in the global economy and as the European debt crisis continues to weigh on investors’ sentiment. The Nikkei lost 0.72% as policymakers and leaders in Europe are far off from actions that will ultimately resolve the debt crisis in the region. Meanwhile, the Shanghai Composite lost 1.6%, hitting its lowest level since January.
In Europe, markets were trading lower as participants do not have many expectations over this week’s European Union Summit. Spain officially requested the funds for the bank bailout from Europe, while Fitch cut Cyprus to Junk status, as Greek exposure hits.
The euro was losing against the Dollar, but trading below the $1.25 level. Crude oil was slumping 1.05% to $78.92 per barrel. Also in the energy complex, natural gas was jumping 2.21% to $2.683 per MMBtu. Gold was adding 0.06% to $1567.90 an ounce, and silver was sliding 0.06% to $26.645 an ounce. Meanwhile, copper was retreating 0.21%.
Today’s Stocks to watch: Anheuser-Busch Inbev (NYSE: BUD), Apple (NASDAQ: AAPL), Bank of America (NYSE: BAC) Facebook (NASDAQ: FB), Intuitive Surgical (NASDAQ: ISRG), Research In Motion (NASDAQ: RIMM), Tesla Motors (NASDAQ: TSLA), and Yelp (NYSE: YELP).
On economic news, at 10 am, May New Home Sales figures will be available.
Anheuser-Busch Inbev (NYSE: BUD), the world’s biggest brewer, will be in focus in the session after a Bloomberg report states that the company is close to buying the rest of Mexico’s Grupo Modelo, the maker of Corona beer, for more than $12 billion. Anheuser-Busch Inbev, based in Belgium, already owns a non-controlling 50% stake on the brewer.
Apple (NASDAQ: AAPL), the maker of iPads and iPhones, was sliding 0.54% to $579 in pre-market, as the stock gives up some of its last week’s gain of 1.9%. A U.S. Judge in a court in Chicago issued an order in which it effectively ended a lawsuit between Apple and Motorola Mobility, recently acquired by Google that started in 2010. The U.S. judge wrote in its ruling that neither party was entitled to an injunction. The stock is trading above its 50day moving average around the $576 area, which now is providing support. Last week, Jefferies reiterated its Buy rating and its target price of $800.
Bank of America (NYSE: BAC) was losing 1.01% to $7.86 in pre-market amid ongoing concerns over global growth and the European debt crisis. The lender was downgraded last week by Moody’s along other 14 global banks, a downgrade that famed banking analyst Dick Bove called absurd. Bove said that balance sheets of banks have improved dramatically in the last 4 years. Spain officially asked for funds for its bank bailout, while Bloomberg TV was reporting that Moody’s was set to downgrade Spanish banks later today after the close. Technically, BofA closed just above its 50day moving average at around the $7.78 area, which is now providing support. Separately, Oppeinheimer cut estimates on several banks, taking its estimates on second quarter for Bank of America below consensus.
Facebook (NASDAQ: FB), the social media Company, was losing 0.76% to $32.80 in pre-market, giving up part of its last week’s sharp gain of more than 10%, as the stock was initiated with a Buy and a target price of $40 at Nomura and as the company quietly started to run adds and sponsored stories o Zynga with both companies forming a revenue partnership. Earlier in the month, Facebook announced a new advertising model, in which it will let advertisers bid real time for ad space.
Intuitive Surgical (NASDAQ: ISRG), the maker of da Vinci surgical systems, will be in focus this session along with other medical device makers, as the Supreme Court could rule on the Affordable Healthcare Act Law or Obamacare as early as 10 am today.
Research In Motion (NASDAQ: RIMM), the maker of the Blackberry smartphone, was losing 1.07% to $9.75 in pre-market amid a report that speculates that the company was considering splitting its business in two, separating its struggling handset manufacturing division from its messaging network. Last month, the company hired JPMorgan and RBC Capital to look at its strategic options.
Tesla Motors (NASDAQ: TSLA), the electrical vehicle maker, was sliding 0.84% to $33.50 in pre-market. Over the weekend, the automaker confirmed the deliveries of its first Model S, the world’s first premium electric sedan, to its first customers. These deliveries put the Model S on the road about 1 month earlier than previously announced and places the company in a good position to build 5,000 cars by the end of 2012. Needham said Tesla would also benefit from improving industry sentiment as the company has achieved a major program milestone in a timely manner. The firm has a $40 target price on the stock.
Yelp! (NYSE: YELP), the provider of user-generated reviews and information on local businesses and service providers, will be a stock to watch after Bloomberg reported that Apple’s new iPhone maps app will include a feature called Yelp check-in. Earlier this month, Apple announced that it Apple Maps will replace Google’s Maps as the default location services in the new iOS 6, set to debut later this year. Yelp introduced a check-in service for mobile phones in 2010 in an effort to help local merchants build loyalty with regular customers.
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