Stock Futures Boosted by Earnings. Stocks to Watch: AXP, AAPL, COF, EBAY, IBM, MS, QCOM, TRV, VZ
Published on Thursday, 19 July 2012 07:26 Written by Christopher Lynn
New York, July 19th (TradersHuddle.com) – Stock futures were pointing to a higher open on a busy earnings-reporting morning amid positive performance in overseas markets. A batch of strong corporate results eased fears that the global slowdown will impact profits, boosting investors’ confidence.
In Asia, stocks jumped following a string of positive corporate results in the U.S., particularly in the tech sector. The positive reports helped eased fears that the global economic slowdown will impact corporate profits. The Nikkei jumped 0.8%, helped by increased confidence in technology shares, while the Shanghai Composite climbed 0.73%, logging its third straight gain. Rumors that China’s central bank will cut reserve ratio requirements also lend support to the upside move.
In Europe, markets were trading higher, hitting an 11-month high, following upbeat earnings reports in both the U.S. and Europe. Companies such as Electrolux were rallying nearly 5% after its earnings topped consensus despite forecasting slightly lower demand in the region. A weak Spanish medium term auction brought the markets off their peaks as the auction bucked the recent trends, seeing higher yields.
The euro was climbing against the Dollar, trading just above the $1.23 level. Crude oil was jumping 1% to $90.83 per barrel. Also in the energy complex, natural gas was dropping 0.30% to $2.964 per MMBtu. Gold was climbing 0.76% to $1582.70 an ounce, and silver was jumping 0.98% to $27.36 an ounce. Meanwhile, copper was advancing 0.88%.
On economic news, at 8:30 am, the labor Department will release its weekly jobless claims report. At 10 am, June Existing Home Sales data and the reading in the Philadelphia Fed index will be available; at the same time, June Leading Economic Indicators will be released.
Today’s Stocks to watch: American Express (NYSE: AXP), Apple (NASDAQ: AAPL), Capital One (NYSE: COF), eBay (NASDAQ: EBAY), International Business Machines (NYSE: IBM), Morgan Stanley (NYSE: MS), Qualcomm (NASDAQ: QCOM), Travelers (NYSE: TRV), and Verizon (NYSE: VZ).
American Express (NYSE: AXP), the credit card issuer, will be in focus after its earnings beat expectations on revenues that were below consensus. The company said it earned $1.15 per share, $0.05 better than consensus, on revenues that climbed 4.6% from a year ago to $7.96 billion versus consensus of $8.08 billion. FBR Capital lowered its target price to $60 from $65, citing weaker performance in the U.S. and International card segments. The stock was downgraded to a Neutral at Guggenheim.
Apple (NASDAQ: AAPL), the maker of iPads and iPhones, was climbing 0.60% to $609.90 in pre-market, amid the strength in the broad market helped by the positive earnings trend in technology. The stock has been trading in a tight trading range, as participants hold their ammunition ahead of the company’s highly expected earnings report scheduled for July 24th after the closing bell. On average analysts expect a profit of $10.38 per share on revenue of $37.34 billion. 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. Separately, a British judge instructed Apple to run advertisement saying that Samsung did not copy its design for the iPad. The judge had ruled last week that Samsung did not infringe Apple's designs because its Galaxy Tab tablets were not "as cool" as the U.S. company's iPad.
Capital One (NYSE: COF), the diversified bank and credit card issuer, will be in focus after reporting results of $0.16 per share, including multiple non recurring items, on revenues that jumped 26.6% from a year ago to $5.05 billion versus consensus of $5.21 billion. Additionally, the company received a fine of $210 million, the first enforcement action by the recently created Consumer Financial Protection Bureau. The agency fined Capital One over credit card marketing, saying call-center representatives misled consumers into paying for extra credit card products.
eBay (NASDAQ: EBAY), the owner of paypal and operator of an auction marketplace, was rallying 7% to $43.35 in pre-market, following positive reaction to its earnings report, which showed that the Paypal momentum continued. The company’s report topped expectations, while it provided mixed guidance for the third quarter, with earnings above consensus and revenues slightly below it. eBay also reaffirmed its full year revenue and EPS guidance. The company said it earned $0.56 per share, $0.01 better than consensus, on revenues that jumped 23.1% to $3.4 billion. Management said that it was particularly pleased with eBay Marketplaces, which delivered its strongest organic growth in gross merchandise volume, excluding vehicles, since 2006, while mobile continues to be a game changer.
International Business Machines (NYSE: IBM), the IT solutions and consulting services provider, was gaining 2.6% to $193.18 in pre-market, after the company topped earnings expectations on revenue that missed consensus. Also, IBM issued upside earnings guidance for the full year. The company said it earned $3.51 per share, excluding non-recurring items, $0.08 better than consensus, on revenues that fell 3.3% from a year ago to $25.78 billion.
Morgan Stanley (NYSE: MS), the operator of a global securities business, was slumping $2.64% to $13.62 in pre-market on initial reaction to its quarterly results. The company said it earned $0.28 per share, including DVA, $0.05 worse than consensus, on revenues of $6.95 billion versus consensus of $7.52 billion.
Qualcomm (NASDAQ: QCOM), the maker of integrated CDMA chipsets for wireless products, was jumping 4.4% to $58.51 in pre-market on reaction to the company’s earnings report and as it cut the outlook for the current quarter, but saying that it sees a strong December. Qualcomm said it earned $0.85 per share, $0.01 worse than consensus, on revenues that jumped 27.8% from a year ago to $4.63 billion, slightly below consensus of $4.68 billion. The company issued downside guidance for fiscal fourth quarter and fiscal 2012. Additionally, Qualcomm said its chip shipments in the quarter came in below estimates, but they believe it is a pause ahead of key launches during the holiday season.
Travelers (NYSE: TRV), the property and casualty insurer, will be in focus after it missed earnings expectations on revenues that were above consensus. The company said it earned $1.26 per share, $0.11 worse than consensus, on revenues that fell 0.5% from a year ago to $6.36 billion.
Verizon (NYSE: VZ), the owner of the largest wireless network with more subscribers in the U.S., was jumping 2% in pre-market ahead of the company’s earnings report. The company is expected to show a healthy increase in net income. Verizon also might update on how customers are reacting to the introduction of the Share Everything plan, which provides unlimited calling and shares a pool of data among up to 10 devices. Rival AT&T is following Verizon’s lead and will introduce a new type of family plan that will significantly raise its fees for data services, such as mobile Internet. The AT&T plan will be an option rather than a requirement for new customers.
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