Stock Futures Lower amid Global Growth Worries. Stocks to Watch: ATVI, AA, AGP, AAPL, BAC, MA, SIRI, V, WLP
Published on Monday, 09 July 2012 07:29 Written by Christopher Lynn
New York, July 9th (TradersHuddle.com) – Stock futures were pointing to a lower open after the weak jobs data in the U.S. coupled with lower inflation figures in China dimmed the outlook for global economic growth. Spanish yields were moving higher ahead of a meeting of euro zone finance ministers in Brussels.
M&A was once center stage with WellPoint acquiring Amerigroup for $92 per share and Thompson Reuters buying FX Alliance for $22 per share.
In Asia, stocks slumped after the disappointing jobs data in the U.S. and lower than expected inflation in China, which confirmed worries that global economic growth was slowing. Chinese consumer and producer prices eased more than expected, signaling falling demand at the world’s second largest economy. However, the data provided additional room for further growth supportive policy moves by China’s government and central bank. The Nikkei lost 1.4%, while the Shanghai Composite tumbled 2.4%.
In Europe, markets were struggling amid global growth worries and as Spanish 10-year yields hovered above the 7% level. Germany posted better than expected Trade Balance data, while the Swiss Economy continues to thrive, as its unemployment rate dropped to 2.9%. Participants had mixed feelings regarding a meeting of euro zone finance ministers, in which they will try to hammer the details of the agreement from the EU summit.
The euro was climbing against the Dollar, trading just above the $1.23 level. Crude oil was gaining 0.82% to $85.14 per barrel. Also in the energy complex, natural gas was jumping 1.87% to $2.828 per MMBtu. Gold was adding 0.40% to $1585.20 an ounce, and silver was jumping 1.36% to $27.285 an ounce. Meanwhile, copper was retreating 0.13%.
On economic news, at 3 pm, May’s consumer credit data will be released.
Today’s Stocks to watch: Activision Blizzard (NASDAQ: ATVI), Alcoa (NYSE: AA), AMERIGROUP (NYSE: AGP), Apple (NASDAQ: AAPL), Bank of America (NYSE: BAC), MasterCard (NYSE: MA), Sirius XM Radio (NASDAQ: SIRI), Visa (NYSE: V), and WellPoint (NYSE: WLP).
Activision Blizzard (NASDAQ: ATVI), the video game publisher with titles like Tony Hawk and Call of Duty, will be in focus after a report from the New York Post, which states that Vivendi, who owns a 60% stake on the company, was considering a sale. The article mentions Microsoft and Time Warner as potential bidders for this stake, which could help the French conglomerate raise up to $10 billion.
Alcoa (NYSE: AA), the aluminum producer, will be in focus as the company is set to unofficially kick off a new earnings season after the closing bell. Alcoa is expected to report on average a profit of $0.06 per share on revenue of $5.81 billion. Last week, Dahlman Rose cut its estimates for second quarter EPS and EBITDA to reflect recent LME price declines. The firm slashed the EPS estimate to $3 from $7, while the EBITDA was cut from $640 million to $550 million.
AMERIGROUP (NYSE: AGP), the multi-state managed healthcare company focused on publicly sponsored programs, was soaring 39.88% to $90 in pre-market after the company agreed to be acquired by WellPoint (NYSE: WLP) for $92 per share in cash. WellPoint was climbing 0.15% in pre-market after the news of the $4.9 billion acquisition, which is expected to be accretive to WellPoint's earnings per share in 2013, including one-time transaction and integration costs. Accretion is expected to increase in 2014 and exceed $1.00 per share by 2015.
Apple (NASDAQ: AAPL), the maker of iPads and iPhones, was adding 0.06% to $606. The stock jumped above $600 per share last week after reports indicated the company was planning to launch an iPad mini later this year, likely combining the announcement with the iPhone 5 unveiling event. Also, Topeka Capital reiterated its target price of $1001, saying that the introduction of a cheaper and smaller iPad coupled with the unveiling of the iPhone 5 later this year should propel the stock to the upside. Rival Samsung posted a record $5.9 billion in profit thanks to surging Galaxy smartphone sales.
Bank of America (NYSE: BAC) was climbing 0.26% to $7.68 in pre-market after tumbling 2% in the prior session following the dismal jobs figures. The stock, which is considered a proxy for the U.S. economy closed below its 20day moving average at $7.77 and above its 50day moving average at $7.62. FBR Capital on a research note said that mortgage revenue would likely remain strong, but cited Wells Fargo and PNC Financial as best of breed.
Sirius XM Radio (NASDAQ: SIRI), the satellite radio provider, was rallying 5.13% to $2.15 in pre-market after the company announced that it added 622,042 net subscribers in the second quarter of 2012, up 38% from the same period last year. Sirius XM has added over 1 million net subscribers in the first half of 2012. At June 30, 2012, the company had over 22.9 million subscribers.
Visa (NYSE: V), the retail electronic payments network operator, was slumping 1.9% to $122.90 in pre-market, after reports indicated the company together with rival MasterCard (NYSE: MA) were close to reaching a settlement in a seven year old lawsuit in which retailers accused the payment networks of charging excessive credit card fees. Last month, Morgan Stanley said that a settlement could potentially cost $10 billion. According to the firm, MasterCard would likely pay its portion over several years while Visa would be insulated from direct economic exposure because of a plan already in place to cover the costs of the settlement. Shares of MasterCard (NYSE: MA) were falling 0.94% in pre-market.
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