Stock Futures Lower amid Stimulus Speculation. Stocks to Watch: AA, AAPL, BA, BCS, FB, F, JPM, MSFT, RA
Published on Tuesday, 03 July 2012 08:18 Written by Christopher Lynn
New York, July 3rd (TradersHuddle.com) – Stock futures were pointing to a lower open of a session that its expected to have light trading volume ahead of the 4th of July holiday. Overseas markets performance was positive amid hopes for central bank stimulus following the weak manufacturing data in the U.S. and China. Additional data is due out later today, including June auto sales.
In Asia, stocks closed higher after weak data manufacturing data in the U.S. and China, spurred speculation that major central banks might provide further stimulus to avoid a deeper slowdown in the global economy. The Nikkei jumped to an 8-week high, while the Shanghai Composite climbed 0.14%.
In Europe, markets were moving to the upside, as the relief rally sparked by the EU summit measures to tackle the debt crisis continued and as participants bet that further policy action by central banks following weak data will be implemented. Bank stocks were moving higher, with Barclays (NYSE: BCS) reversing from a 3% drop at the open and rallying more than 4% in London trading, as the Libor rate manipulation scandal after CEO Bob Diamond joined the lender’s Chairman and resigned from the company.
The euro was climbing against the Dollar, trading above the $1.25 level. Crude oil was rallying 2.36% to $85.73 per barrel. Also in the energy complex, natural gas was falling 0.46% to $2.811 per MMBtu. Gold was gaining 0.73% to $1609.30 an ounce, and silver was jumping 1.33% to $27.865 an ounce. Meanwhile, copper was advancing 1.83%.
On economic news, at 10 am, May Factory orders will be released and automakers will report June auto sales throughout the day.
Alcoa (NYSE: AA), the aluminum producer, will be in focus after Dahlman Rose cut its estimates for second quarter EPS and EBITDA ahead of the company’s earnings report due out on July 9th. The firm cut the estimates to reflect recent LME price declines. Dahlman Rose slashed the EPS estimate to $3 from $7, while the EBITDA was cut from $640 million to $550 million.
Apple (NASDAQ: AAPL), the maker of iPads and iPhones, was climbing 0.42% to $594.90 in pre-marker after jumping 1.5% in the prior session. Rival Samsung lost a bid to lift the ban on the U.S. sales of its Galaxy Tab 10.1, giving Apple another win in the legal battle against Samsung over patent infringement. Yesterday, Apple reached a $60 million settlement with China’s Proview to settle the lawsuit regarding the iPad trademark, which threatened the iPad sales in China. Last week, Bernstein said that despite plenty of opportunity for the iPhone in China, the company faces short-term hurdles, as the firm expects a decline of 1.5 million iPhones amid a slowdown in the Chinese economy, while Wells Fargo resumed its coverage on Apple with an Outperform rating.
Boeing (NYSE: BA), the world’s second largest commercial aircraft maker, will be in focus in the session after the company said that it projects a $4.5 trillion market for 3,400 new airplanes over the next 20 years as the world fleet size doubles in size. The aircraft maker said that the single-aisle market, served by Boeing's Next-Generation 737 and the future 737 MAX, will continue its robust growth. Widebodies, such as Boeing's 747-8, 777 and 787 Dreamliner, will account for almost $2.5 trillion dollars worth of new airplane deliveries with 40% of the demand for these long-range airplanes coming from Asian airlines.
Facebook (NASDAQ: FB), the social media Company, was climbing 0.42% to $30.90 after the stock lost 5.5% last week and dropped another 1% in the prior session. Mixed ratings from analysts following the expiration of the IPO quiet period and ongoing worries over its advertising revenue growth has spurred a pullback from the $33 per share level. The Microsoft news over the prospects of its online services unit might weighed on other internet advertising plays like Facebook.
Ford (NYSE: F), the Dearborn, MI based automaker, was climbing 0.85% to $9.47 in pre-market, ahead of the company, along with other automakers, reporting June sales. Last week, Ford said that it expects pre-tax operating profits in the second quarter to be substantially lower than last year, as results are weighed down by weakness in overseas markets, particularly Europe. Industry wide, U.S. sales for June are expected at an annual pace of 13.9 million, slightly above than the prior month of 13.8 million. However domestic vehicles sales are expected to edge lower to 10 million units from 10.6 million in May.
JP Morgan (NYSE: JPM) was near trading near the flat line in pre-market amid a report from the Financial Times that states the company was subpoenaed twice by the U.S. electricity regulator FERC to investigate whether bank manipulated power markets in CA and Midwest region. The regulator said the bank might have inflated energy costs by at least $73 million. Last month, Goldman Sachs added the stock to its coveted Conviction Buy List.
Microsoft (NASDAQ: MSFT), the world’s largest software publisher, was losing 1.44% to $30.12 in pre-market after it announced that it was taking a $6.2 billion charge to write down the value of an online advertising agency it bought five year ago, aQuantive. The company admitted that its largest acquisition in the Internet sector is effectively worthless. Microsoft said that the acquisition did not accelerate growth to the degree it anticipated and expectations for future growth and profitability at its online services unit, which includes Bing and the MSN portal, are lower than previous estimates.
RailAmerica (NYSE: RA) will be in focus after a report states that it has attracted takeover interest from Genesee & Wyoming Inc and Watco Companies LLC. The company has a market value of $1.2 billion and its being in play after the Jacksonville Florida based company announced in May it has hired Deutsche Bank to consider a sale and was in preliminary talks with potential buyers.
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