Stock Futures Lower amid Earnings Jitters. Stocks to Watch: AAPL, C, GSK, HGSI, LVS, MA, MSFT, NOK, V
Published on Monday, 16 July 2012 07:28 Written by Christopher Lynn
New York, July 16th (TradersHuddle.com) – Stock futures were pointing to a lower open on Monday on renewed jitters over the impact of a slowdown in global growth on corporate profits. Retail sales data and the reading on the Empire state manufacturing was due later this morning, but participants’ focus this week will center earnings and on Fed Chairman Ben Bernanke, as he gives his semiannual report before the Senate Banking Committee on Tuesday and before the House Committee on Wednesday.
In Asia, stocks struggled after the positive response from the inline Chinese GDP reading last week was offset by concern over profit warnings from heavyweight Chinese companies. The Shanghai Composite slumped 1.7% after some companies warned that the slowdown in the Chinese economy was impacting their results and after a Financial Times article suggesting the recent Chinese data points do not add up to the 7.6%, meanwhile the Nikkei was closed for a public holiday.
In Europe, markets were trading lower amid increasing signs the euro debt crisis was weighing on profits. Several companies, like U.K. software maker said that comditions in European markets have toughened, while closing retailer Henner & Mauritz posted slower than expected sales growth.
The euro was falling against the Dollar, trading just below the $1.22 level. Crude oil was losing 0.44% to $86.72 per barrel. Also in the energy complex, natural gas was sliding 0.56% to $2.858 per MMBtu. Gold was dropping 0.46% to $1584.00 an ounce, and silver was slumping 1% to $27.095 an ounce. Meanwhile, copper was retreating 0.84%.
On economic news, at 8:30 am, the government will release its report on June Retail sales and the New York Fed will release its Empire State Manufacturing Index reading, and at 10 am, May business inventories data will be available.
Today’s Stocks to watch: Apple (NASDAQ: AAPL), Citigroup (NYSE: C), GlaxoSmithKline (NYSE: GSK), Human Genome (NASDAQ: HGSI), Las Vegas Sands (NYSE: LVS), MasterCard (NYSE: MA), Microsoft (NASDAQ: MSFT), Nokia (NYSE: NOK), and Visa (NYSE: V).
Apple (NASDAQ: AAPL), the maker of iPads and iPhones, was adding 0.05% to $605.29 in pre-market, as the stock failed to post a gain for the week despite the 1% jump on Friday’s session. Last week, UBS initiated coverage with a Buy and a target price of $740 and Piper Jaffray analyst Gene Munster made bullish comment on the iPad maker. According to him, the tech giant could sell up to 6 million mini iPads, if the new device gets unveiled during the iPhone 5 event sometime in September. The company is scheduled to report its results on Tuesday the 24th of July after the market closes, with analysts on average expecting a profit of $10.45 per share.
Citigroup (NYSE: C), the diversified financial services firm, was climbing 0.83% to $26.87 in pre-market ahead of its quarterly results. On average analysts expect a profit of $0.89 per share on revenues of $18.76 billion. Last quarter, Citi reported earnings of $1.11 per share.
GlaxoSmithKline (NYSE: GSK) will be in focus after the company is set to raise the bid for Human Genome (NASDAQ: HGSI) to $14 per share or $2.8 billion in friendly takeover. The U.K. pharma giant sweetened the offer from a previous bid of $13 per share. Share of Human Genome were jumping 3.09% to $14 in pre-market trading.
Las Vegas Sands (NYSE: LVS), the owner and operator of casino resorts and convention centers in the U.S., Macau, and Singapore, will be in focus after news that the company received an extension to build a casino in Macau, but it expects to pay a penalty for the delay. In regulatory filings the Las Vegas Sands had said that it would apply for the extension, as it was unable to meet the prior deadline of April 2013. The planned new resort casino will be the company’s biggest after the massive $5 billion Cotai Central resort that it opened this year. It will target the mass-market and feature family friendly facilities.
Microsoft (NASDAQ: MSFT), the world’s largest software publisher, will be in focus after the company together with NBC Universal, a unit of Comcast, dissolved the joint venture that owned MSNBC.com. The news portal was renamed NBCnews.com, after NBC Universal bought the 50% stake from Microsoft for about $300 million. The breakup dissolves the joint venture that started to unwind in 2005 when Microsoft sold it stake in MSNBC’s cable TV channel to NBC. According to reports, Microsoft is planning to launch its own new service this fall and it will now be free to have multiple news sources and multiple perspectives on MSN.com.
Nokia (NYSE: NOK), the Finnish mobile phone maker, was tumbling 2.72% to $1.79 in pre-market on news that the company slashed the price of its flagship smartphone Lumia 900 in half, in an effort to stanch market share losses. According to the company, the Windows phone has been reduced to $49.99 from $99.99 with a 2-year contract, as sales have been slow, and as Nokia took a further hit when Microsoft said current phones would be unable to run its new Windows 8 software, rendering them obsolete. MKM Partners slashed its target price on the stock to $1.50 from $2.
Visa (NYSE: V), the retail electronic payments network operator, was jumping 2.97% to $127.77, while rival MasterCard (NYSE: MA) was rallying 3.82% to $446 in pre-market, on reaction to the news from late Friday that the credit card companies had resolved litigation with U.S. merchants. The potential settlement is viewed as less onerous than expected for credit card companies and payment networks, according to FBR Capital. The firm said that the monetary penalty of $6.1 billion, was at the low end of the $6 to 12 billion estimates frequently cited in news articles. With regard to credit card issuers, the estimated financial impact of the interchange reduction, $1.2 billion, is less than the firm expected, resulting in estimated negative EPS impacts of 0-2% among the largest Visa and MasterCard credit card issuers.
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