Stock Futures Lower amid Growth Worries. Stocks to Watch: AAPL, BAC, FB, HBC, INFY, MAR, MRK, R, SVU
Published on Thursday, 12 July 2012 06:59 Written by Christopher Lynn
New York, July 12th (TradersHuddle.com) – Stock futures were pointing to a lower open amid weakness in overseas markets. Participants worried over the impacts of a slowing global economy and the impacts ob corporate results after the FOMC minutes showed no appetite by policy makers to provide further stimulus.
In Asia, stocks struggled as a surprise rate cut from South Korea and an unexpected drop in Australian unemployment added to worries over a sputtering global economy. Participants were reluctant to bid the markets higher, as also the Fed Minutes failed to show clear signs on the possibility of further U.S. stimulus. The Nikkei tumbled nearly 1.5%, as the Bank of Japan only offered minor tweaks to its monetary easing policy, while the Shanghai Composite climbed 0.46%, as investors sought beaten down stocks.
In Europe, markets were sliding, taking the lead from Wall Street and Asian markets, after the FOMC meeting minutes failed to provide clues for further stimulus measures at the World’s largest economy. Demand for risky assets was also impacted after South Korea’s rate cut and a jump in Australian unemployment. The move to the downside was broad based, with basic resources stocks showing the worst performance.
On economic news, at 8:30 am, the Labor Department will release its weekly jobless claims report. At the same time, June export and import prices will be available; and at 3 pm, the U.S. Treasury will release its monthly budget figures.
The euro was losing against the Dollar, trading below the $1.23 level. Crude oil was dropping 0.85% to $85.08 per barrel. Also in the energy complex, natural gas was sliding 0.46% to $2.84 per MMBtu. Gold was falling 0.53% to $1567.30 an ounce, and silver was slumping 0.88% to $26.785 an ounce. Meanwhile, copper was retreating 1%.
Today’s Stocks to watch: Apple (NASDAQ: AAPL), Bank of America (NYSE: BAC), Facebook (NASDAQ: FB), HSBC Holdings (NYSE: HBC), Infosys (NASDAQ: INFY), Marriott International (NYSE: MAR), Merck (NYSE: MRK), Ryder Systems (NYSE: R), and SUPERVALU (NYSE: SVU).
Apple (NASDAQ: AAPL), the maker of iPads and iPhones, was sliding 0.40% to $602 in pre-market, as participants worried over a slowdown in the global economy and the impacts on corporate results. The company is scheduled to report its quarterly results on July 24th after the market closes, with analysts on average expecting a profit of $10.34 per share on revenues of $37.37 billion. Yesterday, UBS initiated its coverage on the stock with a Buy and a target price of $740, while money manager David Einhorn said on CNBC that he is still a big bull on Apple with a 2 to 3 year horizon. Earlier in the week, Piper Jaffray analyst Gene Munster gave a bullish outlook on the tech giant, saying that it expects the iPad and iPhone maker could sell up to 6 million mini iPads in the December quarter. Many reports point for Apple to unveil the cheaper and smaller iPad during the unveiling event for the iPhone 5 sometime in September. The stock’s 20day moving average is at the $587 area and the 50day moving average at the $574 area.
Bank of America (NYSE: BAC) was losing 1.05% to $7.55 in pre-market after jumping 2% to $7.63 in the prior session. The stock was trading below its 50day moving average at $7.57 amid global growth woes and ahead of weekly jobless claims data. Yesterday, there were reports the company has been cutting jobs in its commercial banking unit in recent weeks as it tries to boost the group's business. The job cuts are the latest round in the bank's cost-cutting program, which was announced last year.
Facebook (NASDAQ: FB), the social media Company, was dropping 0.9% to $30.68 in pre-market, extending the 1.6% drop from the prior session. Fast Money trader Karen Finerman suggested going long Google and short Facebook due to the valuation differential. Yesterday, Needham said that it expects the company to report earnings that are inline consensus of $0.11 per share on revenue of $1.207 billion, which is slightly above consensus of $1.15 billion. The firm has a target price for the stock of $40 per share. Facebook is scheduled to report its first quarterly results as a public company on July 26th.
HSBC Holdings (NYSE: HBC), the largest European lender and international emerging markets bank, was falling 1.7% to $43.38 in pre-market amid weakness in European trading and after the Financial Times reported the lender could be hit by a $1 billion penalty from US officials for not having terrorism and other criminal controls in place.
Infosys (NASDAQ: INFY), the provider of IT consulting and software services, including e-business and supply chain solutions, will be in focus after the company missed earnings expectations on revenues that were above consensus, while it cut fiscal 2013 outlook, but still sees EPS and revenues above consensus. The company said it earned $0.73 per ADS, a penny worse than consensus, on revenues that climbed 4.8% from a year ago to $1.75 billion.
Marriott International (NYSE: MAR), the hotel chain owner and operator, will be in focus after the company reported earnings that were inline with expectations on revenues that missed consensus. Marriott earned $0.42 per share on revenues that fell 6.6% from a year ago to $2.78 billion. The company issued inline earnings guidance for the full year and said that revenue per available room will increase 6 to 8% worldwide.
Merck (NYSE: MRK), the maker of Singulair and Zocor, was jumping 4.22% to $42.95 in pre-market after the company announced positive results from Phase 3 clinical trial of odanacatib, its investigational cat-K inhibitor for osteoporosis. Merck announced the study met its primary efficacy outcomes at first planned interim analysis and is being concluded early due to robust efficacy and a favorable benefit-risk profile.
Ryder Systems (NYSE: R), the transportation management solutions provider, will be in focus after the company raised its quarterly cash dividend by 6.9%. The dividend will increase from $0.29 per share to $0.31 per share.
SUPERVALU (NYSE: SVU) will be in focus after plunging more than 26% to $3.90 in after hours. The owner and operator of hard discount to traditional and premium grocery stores missed earnings expectations on revenues that were below consensus, as it suspended its guidance and dividend and announced a review of strategic alternatives to create value for shareholders. The company reported a profit of $0.19 per share, $0.19 worse than consensus, on revenues that fell 4.5% from a year ago to $10.6 billion.
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