Stock Futures Higher; Spain Bailout Ratified. Stocks to Watch: AMD, AA, AAPL, BAC, BA, FB, PCX, SHAW, WWW
Published on Tuesday, 10 July 2012 07:33 Written by Christopher Lynn
New York, July 10th (TradersHuddle.com) – Stock futures were pointing to a higher open after the bailout for Spain’s banking system was ratified and participants speculated that a German court would approve the EU’s permanent bailout fund. The headlines coming from Europe were offsetting weak trade data out of China, which provided another unequivocal sign that the Chinese economy was cooling down more than expected.
In Asia, stocks closed lower after weak Chinese trade data. Import growth slowed sharply in June, providing another signal of a sluggish domestic demand and adding to the worries over a deteriorating outlook for the global economy. Chinese imports climbed 6.3% in June, well below the expected 12.7% increase, while exports jumped 11.3%, above the 9.9% figure that was widely expected. The Nikkei fell 0.44%, while the Shanghai Composite lost 0.29%.
In Europe, markets were trading to the upside after euro zone finance ministers ratified the terms of the bailout agreement for Spain’s struggling banking system and as participants speculated that a top court in Germany would approve the region’s permanent bailout fund. Also among the agreements ratified by the finance ministers in their meeting in Brussels, Spain will receive an extra year to meet a 3% budget deficit target. In the UK, May industrial production gained 1% and manufacturing production climbed 1.2%.
The euro was climbing against the Dollar, trading just above the $1.23 level. Crude oil was falling 0.56% to $85.51 per barrel. Also in the energy complex, natural gas was adding 0.35% to $2.893 per MMBtu. Gold was gaining 0.28% to $1593.60 an ounce, and silver was losing 0.18% to $27.395 an ounce. Meanwhile, copper was retreating 0.55%.
Today’s Stocks to watch: Advanced Micro Devices (NYSE: AMD), Alcoa (NYSE: AA), Apple (NASDAQ: AAPL), Bank of America (NYSE: BAC), Boeing (NYSE: BA), Facebook (NASDAQ: FB), Patriot Coal (NYSE: PCX), Shaw Group (NASDAQ: SHAW), and Wolverine World Wide (NYSE: WWW).
Advanced Micro Devices (NYSE: AMD), the world’s second largest chipmaker, was plunging 9.25% to $5.10 in pre-market after the company cut second quarter revenue guidance. The chipmaker issued downside revenue guidance for the second quarter, while reaffirming gross margin guidance. Advanced Micro said that it expects revenues to drop 11% from last quarter to about $1.41 billion, below consensus of $1.63 billion, due to softer-than-expected channel sales in China and Europe as well as a weaker consumer buying environment impacting the company’s Original Equipment Manufacturer business.
Alcoa (NYSE: AA), the aluminum producer, was climbing 0.46% to $8.80 in pre-market after the company reported inline earnings on revenue that beat consensus. Alcoa said it earned $0.06 per share on revenues that fell 9.4% from a year ago to $5.96 billion. The lower revenues came mostly due to an 18 and 17% year-on-year decline in the realized metal price and realized alumina price, respectively. The company continues to project a global aluminum supply deficit in 2012 and reaffirmed its forecast that global aluminum demand would grow 7% in 2012.
Apple (NASDAQ: AAPL), the maker of iPads and iPhones, was adding 0.40% to $616 in pre-market, extending the prior session gain of 1.32%. Yesterday, Piper Jaffray Gene Munster said that the new iPad mini could retail for $299 for the entry model. The analyst also said that Apple could sell up to 6 million iPad minis in the December quarter, as the iPad maker could steal up to 30% share from the Android tablets already in the market. Many reports point for Apple to unveil the cheaper and smaller iPad during the unveil event for the iPhone 5 sometime in September.
Bank of America (NYSE: BAC) was climbing 0.93% to $7.63 in pre-market after losing 1.3% in the prior session and closing below its 50day moving average at $7.59. The stock, which is considered a proxy for the U.S. economy was benefiting from headlines coming from Europe in which the Spanish banking bailout was ratified, removing uncertainty from the global finance system. Yesterday, 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.
Boeing (NYSE: BA), the world’s second largest commercial aircraft maker, will be in focus after the company together with GE Capital Aviation Services announced the commitment from GE’s aircraft leasing and financing arm to purchase 100 737s. The deal are fro 75 737 MAX 800 and 25 Next-Generation 737-800s. Yesterday, the company announced an order from Air Lease for 75 737 MAX planes. Last week, Boeing projected
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, would continue its robust growth.
Facebook (NASDAQ: FB), the social media Company, was flat in pre-market after climbing above $32 per share in the prior session on reports that the company will launch a jobs posting board on its site, which is the next step in the “Social Jobs Partnership” Facebook launched last November, in which the company is teaming with the Labor Department, the National Association of Colleges and Employers, the Direct Employers Association, and the National Association of State Workforce Agencies to launch a page to help job seekers and employers.
Patriot Coal (NYSE: PCX), the operator of coalmines in Central and Northern Appalachia and the Illinois Basin, filed for bankruptcy protection late yesterday. The stock had tumbled more than 70% in late trading after Bloomberg News reported that a filing would be done sometime after the closing bell. The company expects its mining operations and customer shipments to continue in the ordinary course throughout the reorganization process. Patriot coal believes that the protection afforded by a court-supervised reorganization process, including the ability to access new financing, will provide the co with additional time and flexibility to address its financial challenges and position Patriot for long-term viability and success. In conjunction with its reorganization, Patriot obtained a commitment for $802 million in debtor-in-possession financing from Citigroup Global Markets Inc., Barclays Bank PLC, and Merrill Lynch, Pierce, Fenner & Smith Incorporated as joint lead arrangers.
Shaw Group (NASDAQ: SHAW), the provider of comprehensive engineering, consulting, construction and maintenance services to the power and process industries, will be in focus after reporting fiscal third quarter results. The company reported a loss of $0.24 per share on revenues that climbed 4.8% from a year ago to $1.56 billion.
Wolverine World Wide (NYSE: WWW) will be in focus after the company said it missed earnings expectations by $0.03 per share on revenues that climbed 0.8% from a year ago and were inline with consensus. Wolverine earned $0.41 per share on revenue of $312.7 million. Also, it reaffirmed its earnings and revenue guidance for fiscal 2012.
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