Stock Futures Struggle amid Earnings and Bernanke. Stocks to Watch: AAPL, BAC, BHP, BLK, CSX, EMC, SWK, VMW, YHOO
Published on Wednesday, 18 July 2012 07:10 Written by Christopher Lynn
New York, July 18th (TradersHuddle.com) – Stock futures were pointing to a lower open amid a flurry of earnings reports, including Bank of America. Participants continued to digest the gloomy tone from Bernanke’s testimony before the Senate Banking Committee and the lack of a clear indication of further stimulus. The Fed Chairman will return to Capitol Hill later this morning to provide testimony now before the House Financial Service Committee.
In Asia, stocks struggled after the Fed Chairman Ben Bernanke offered a gloomy economic outlook for the U.S. economy, while failing to provide a clear signal of additional stimulus measures. However, hopes for further easing policy, as participants see the worsening economic conditions as the trigger for policy measures from the Fed helped limit losses. The Nikkei slipped 0.32%, while the Shanghai Composite climbed 0.37%. Data showed another year on year dip in Chinese home prices.
In Europe, markets were trading higher, as participants reacted to a batch of strong earnings. Earnings season in Europe geared up this morning after Credit Suisse released its second quarter results a week early, which showed a net profit of 788 million francs. The Swiss banking giant was the top performer in the banking sector after it also moved to bolster its capital base. The Bank of England released its minutes from its last meeting, which showed two dissenters in the increase of its asset purchase program.
The euro was losing against the Dollar, trading below the $1.23 level. Crude oil was falling 0.40% to $88.86 per barrel. Also in the energy complex, natural gas was dropping 0.54% to $2.781 per MMBtu. Gold was losing 0.78% to $1577.10 an ounce, and silver was slumping 0.90% to $27.07 an ounce. Meanwhile, copper was advancing 0.23%.
On economic news, at 8:30 am, June housing starts and building permits will be released. At 10 am, the Fed Chairman Ben Bernanke will initiate testimony before a U.S. House of Representatives Committee. At 10:30 am, the Energy Department will release its weekly inventory report on crude oil and distillates and at 2 pm, the Fed will release its Beige Book.
Today’s Stocks to watch: Apple (NASDAQ: AAPL), Bank of America (NYSE: BAC), BHP Billiton (NYSE: BHP), BlackRock (NYSE: BLK), CSX Corp. (NYSE: CSX), EMC Corp. (NYSE: EMC), Stanley Black & Decker (NYSE: SWK), VMware (NYSE: VMW), and Yahoo! (NASDAQ: YHOO).
Apple (NASDAQ: AAPL), the maker of iPads and iPhones, was sliding 0.25% to $605.40 in pre-market, as the stock enters a holding pattern ahead of its highly expected earnings report scheduled for July 24th after the closing bell. On average analysts expect a profit of $10.45 per share. Apple has been trading also amid increased reports and signals that the iPhone 5 launch is fast approaching with several reports indicating that production in China has already began. 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.
Bank of America (NYSE: BAC) was jumping 1.26% to $8.02 in pre-market on early reaction to its quarterly results. Participants were digesting the lender’s earnings report. The Charlotte, NC based bank said it earned $0.19 per share, $0.05 better than consensus, on revenues of $22.2 billion, which were shy of consensus of $23.2 billion.
BHP Billiton (NYSE: BHP), the world’s largest natural resource company, was falling 0.88% to $62.76 amid demand concerns and despite the company providing a positive operational update. BHP Billiton posted record quarterly iron ore production and forecast a 5% rise in Australian iron ore output in fiscal 2013.
BlackRock (NYSE: BLK), the provider of diversified investment management services to institutional clients and to retail investors, will be in focus after the company reported earnings that beat expectations on revenues that were shy of consensus. BlackRock earned $3.10 per share, excluding non-recurring items, $0.07 better than consensus, on revenues that fell 5% from a year ago period to $2.23 billion.
CSX Corp. (NYSE: CSX), the provider of rail, intermodal and domestic container shipping, will be in focus after jumping more than 1% in after hours, following positive quarterly results. The company earned $0.49 per share, $0.02 better than consensus, on revenues that were flat from a year ago at $3.02 billion. The second quarter volume fell 0.4%, which was offset by an increase of 0.2% in pricing.
EMC Corp. (NYSE: EMC), the provider of enterprise storage systems, software, networks, and services, will be in focus after nearly 7% in after hours following mixed guidance and management changes news. The company sees second quarter EPS at $0.39 versus consensus of $0.40 on revenues of $5.31 billion versus consensus of $5.30. EMC said that for the full year it continues to expect to achieve its full-year 2012 goals of $22 billion in revenue and non-GAAP EPS of $1.70. David Goulden, Executive Vice President and CFO, has been appointed President and COO of EMC Corporation, Pat Gelsinger, EMC President and COO of Information Infrastructure Products, has been appointed CEO of VMware (VMW), while Paul Maritz, VMware's present CEO, is joining EMC as Chief Strategist.
Stanley Black & Decker (NYSE: SWK), the maker of power tools, will be in focus in the session. The company missed earnings expectations by $0.21 per share on revenues that were below consensus, while it lowered its EPS guidance for full year 2012 below consensus. Additionally, the company announced that its Board of Directors approved a 20% increase in its quarterly dividend to $0.49 per share and a new $1.2 billion share repurchase program.
VMware (NYSE: VMW), the provider of virtualization software solutions, will be in focus after rallying nearly 8% to $86.69 in after hours following positive reactions to news of a CEO change and upside guidance for second quarter revenue. Second quarter revenue is now expected at $1.123 billion versus consensus of $1.114. For the full year, the company expects revenue of $4.54 to $4.635 billion versus consensus of $4.59 billion. VMware announced that Pat Gelsinger, currently president and COO will succeed Paul Maritz as CEO effective September 1st.
Yahoo! (NASDAQ: YHOO), the Internet media company that owns the second largest search engine, will be in focus after sliding 0.32% in after hours. The company released its quarterly results after the closing bell and after announcing that long-time Google executive Marissa Mayer will be its new CEO. The company earned $0.27 per share, excluding non-recurring items, $0.01 better than consensus. Revenues climbed 0.5% from a year ago to $1.08 billion, which was slightly shy of consensus.
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