Stock Futures Lower ahead of EU Summit. Stocks to Watch: AAPL, BAC, BCS, FB, JPM, MDT, VE, WEN
Published on Thursday, 28 June 2012 07:37 Written by Christopher Lynn
New York, June 28th (TradersHuddle.com) – Stock futures were pointing to losses as participants were reluctant to enter or add to positions ahead of the 2-day EU summit despite there is little expected in terms of concrete measures that will provide a long-term solution to the debt crisis in the region. Participant were waiting on economic data later this morning and expecting the Supreme Court to issue its ruling on Obamacare.
In Asia, stocks closed mixed, as participants were reluctant to add or to take new positions ahead of the two-day EU Summit. The Nikkei jumped 1.7%, logging its highest close in six weeks, as the market received a boost from short covering. Despite the move higher, the index remained on track to post its worst quarterly performance in 2 years. Meanwhile, the Shanghai Composite lost nearly 1%, its seventh consecutive losing session amid ongoing worries over a slowdown in both the global and domestic economies.
In Europe, markets were falling, as weakness in banking stocks was dragging the broad market lower. Investors grew increasingly skeptical over the EU Summit and any potential results the meeting can yield. German unemployment disappointed, coming higher than expected and providing a downward catalyst to the markets. However, a positive response to a 5 and 10-year Italian auction pushed yields back down and helped limit the decline.
The euro was falling against the Dollar, trading below the $1.25 level. Crude oil was slumping 0.37% to $79.91 per barrel. Also in the energy complex, natural gas was jumping 1.32% to $2.835 per MMBtu. Gold was sliding 0.61% to $1568.80 an ounce, and silver was dropping 0.68% to $26.76 an ounce. Meanwhile, copper was retreating 0.67%.
On economic news, at 8:30 am, the Labor Department will release its Weekly Jobless Claims Report and the Commerce Department will make the third revision to first quarter GDP available. At 10:30 am, the Energy Department will release natural gas inventory data. Also today, the Supreme Court is expected to issue its ruling on Obamacare.
Today’s Stocks to watch: Apple (NASDAQ: AAPL), Bank of America (NYSE: BAC), Barclays (NYSE: BCS), Facebook (NASDAQ: FB), Family Dollar (NYSE: FDO), JP Morgan (NYSE: JPM), Medtronic (NYSE: MDT), Veolia Environnement (NYSE: VE) and Wendy’s (NASDAQ: WEN).
Apple (NASDAQ: AAPL), the maker of iPads and iPhones, was sliding 0.44% to $572 in pre-market as the stock continues to trade within a very tight range around its 50day moving average at $572.82. Yesterday, a U.S. judge halted the sales of Samsung’s Galaxy Tab 10.1 tablet, citing patent infringements. The judge sided with the iPad maker, providing it with a significant win in its global smartphone and tablet patent wars, while rival Google unveiled a new 7 inch tablet, Nexus, that will retail for $199. Needham said that it was cautious on the Nexus as it’s not revolutionary enough to gain significant tablet market share and weakening demand for 7” tablets will limit growth.
Bank of America (NYSE: BAC) was slumping 1.8% to $7.63 in pre-market, giving ack all of its gains from the prior session, in which the stock had closed above its 50day moving average at $7.69. The space was under pressure amid the JPMorgan news and weakness in European banks. The stock will react to economic data later in the day. The news that Barclays (NYSE: BCS) settle with U.S. and U.K. regulators for $450 million to resolve accusations that it had manipulated Libor to increase its traders’ profits over several years; other large banks are expected to enter similar settlements as the multiyear, global investigations yields results.
Facebook (NASDAQ: FB), the social media Company, was losing 0.99% to $31.91 amid renewed chatter over slowing advertising growth. A report cited by Los Angeles Times said that advertising in the social media site has slowdown compared with 2011, as display advertising limits growth potential and as advertisers begin to realize that the advertisement is not very effective. On the flip side, William Blair initiated coverage on the stock with Outperform. Yesterday, the IPO quiet period expired, with the stock receiving mixed ratings. It was initiated with Outperform at Wells Fargo and Piper Jaffray, while Goldman said it was a Buy, Credit Suisse gave it a Neutral rating and BMO Capital an Underperform rating.
Family Dollar (NYSE: FDO), the owner and operator of a national discount retail chain, was tumbling 4.33% to $66.14 after the company missed earnings expectations on revenues that were inline with consensus. Also, Family Dollar issued inline fourth quarter earnings guidance, while it reaffirmed full year revenue guidance. Family Dollar said that it earned $1.06 per share, $0.01 worse than consensus, on revenues that climbed 9.6% from a year ago to $2.36 billion.
JP Morgan (NYSE: JPM) was tumbling 5.57% to $34.73 in pre-market after the New York Times reported that losses from the “London Whale” Trade could reach up to $9 billion, far exceeding the initial estimates the $2 billion that the lender initially disclosed. According to the report, an internal analysis projected losses of up to $9 billion assuming worst-case conditions. JPMorgan Earlier in the week, Goldman Sachs added the stock to its coveted Conviction Buy List, while last week there were reports that JPMorgan has closed 65 to 70% of the position.
Medtronic (NYSE: MDT), the maker of therapeutic and diagnostic medical products, 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.
Veolia Environnement (NYSE: VE) will be in focus after the French utility company said that it sold its U.K. water business for 1.236 billion pounds or about $1.9 billion. The sale is part of the restructuring, as it aims to use the funds to cut its debt pile.
Wendy’s (NASDAQ: WEN), the fast food hamburger chain, will be in focus after jumping 2.7% in after hours. The company said that it expects second quarter same store sales to increase 3% for Wendy's North America Company-operated restaurants. Also, Wendy’s reaffirmed its outlook for adjusted EBITDA from continuing operations of $320 million to $335 million.
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