Stock Futures Lower as Euro Zone Woes Weigh. Stocks to Watch: AAPL, T, BIDU, DD, SAP, TXN, UA, UPS, UTX
Published on Tuesday, 24 July 2012 07:21 Written by Christopher Lynn
New York, July 24th (TradersHuddle.com) – Stock futures were pointing to a lower open on a busy earnings reporting day, as European worries continued to exert pressure on sentiment, despite an improvement in Chinese manufacturing. Moody’s put Germany, the Netherlands, and Luxembourg on negative credit watch, while Spanish yields continued to raise fears that the country will not be able to meet its financial obligations without a full sovereign bailout.
In Asia, stocks struggled after the prior session slump amid ongoing concerns over Spain’s ability to handle its financial obligations, particularly after its borrowing costs surged on fears that it would need a full bailout. However, sentiment improved slightly after the preliminary results of the HSBC China purchasing managers' index showed that it hit its highest level since February, thanks to advances in manufacturing output. The Shanghai Composite slid 0.2%, while the Nikkei fell 0.24%, near its 6-month low.
In Europe, markets were attempting a small come back from earlier losses, following the steep declines in the prior session. The high borrowing costs at Spain, a weaker than expected Germany PMI, and Moody’s cutting Germany’s rating outlook were offsetting the improvement showed in Chinese manufacturing data.
The euro was losing against the Dollar, trading below the $1.21 level. Crude oil was climbing 0.32% to $88.42 per barrel. Also in the energy complex, natural gas was sliding 0.61% to $3.098 per MMBtu. Gold was falling 0.24% to $1573.60 an ounce, and silver was slumping 0.41% to $26.93 an ounce. Meanwhile, copper was retreating 0.30%.
On economic news, at 8:45 am, Fed Chairman Ben Bernanke will give a speech and at 9 am, the July Flash Manufacturing Index will be released.
Today’s Stocks to watch: Apple (NASDAQ: AAPL), AT&T (NYSE: T), Baidu.com (NASDAQ: BIDU), DuPont (NYSE: DD), SAP (NYSE: SAP), Texas Instruments (NASDAQ: TXN), Under Armour (NYSE: UA), United Parcel Services (NYSE: UPS), and United Technologies (NYSE: UTX).
Apple (NASDAQ: AAPL), the maker of iPads and iPhones, was adding 0.08% to $604.30 in pre-market, as participants wait for the company’s quarterly results due out after the closing bell. On average analysts expect a profit of $10.38 per share on revenue of $37.34 billion. Separately, according to reports, Apple and Samsung executives disagreed last week on the value of each other’s patents at settlement conference call, which was part of the court directed mediation process ahead of the start of the patent trial in San Jose, CA federal court.
AT&T (NYSE: T), the owner of the second wireless network in the U.S., will be in focus as it reports its quarterly results later this morning. On average analysts expect a profit of $0.63 per share on revenues of $31.70 billion. The highest earnings estimate is $0.65 per share. Last week, the company announced that it would introduce shared wireless data plans, following its rival Verizon.
Baidu.com (NASDAQ: BIDU), the largest Chinese Internet search engine, was rallying 6.44% to $114 in pre-market on reaction to earnings beat and inline revenue guidance for the quarter. The company earned $1.24 per share, $0.13 better than consensus, on revenues that surged 62.4% from a year ago to $858 million, largely inline with consensus of $855.9 million.
DuPont (NYSE: DD), the life sciences company and third largest U.S. chemical maker, was falling 0.43% to $48.50 in pre-market on initial reaction to its quarterly results. DuPont posted earnings that beat expectations on revenues that were shy of consensus, while reaffirming its full year EPS guidance at the low end of range. The company said it earned $1.48 per share, excluding non-recurring items, $0.02 better than consensus, on revenues that climbed 7.2% from a year ago to $11.01 billion. DuPont reaffirmed guidance, seeing EPS for the year towards the lower end of the range of $4.20 to $4.40 versus consensus of $4.26, due to uncertainties associated with macros and currency as well as a higher tax rate related to earnings mix.
SAP (NYSE: SAP), the provider of business management software, was climbing 0.82% to $60.56 after the company reported earnings of 0.55 euros per share on revenues that jumped 18.1% from a year ago to 3.9 billion euros, slightly above consensus. SAP expects full-year 2012 non-IFRS software and software-related service revenue to increase in a range of 10-12% at constant currencies. This includes a contribution of up to 2 percentage points from the recently acquired SuccessFactors' business.
Texas Instruments (NASDAQ: TXN), the maker of digital signal processing (DSP) and microcontroller (MCU) semiconductors, will be in focus after the company’s quarterly results topped earnings expectations on revenues that were inline with consensus, but issued downside earnings and revenue guidance for the current quarter. The company said it earned $0.44 per share, excluding non-recurring items, $0.04 better than the consensus, on revenues that fell 3.6% from a year ago to $3.34 billion. For the current quarter, Texas Instruments sees EPS in a range of $0.41 to $0.49 versus consensus of $0.50 and revenues in a range of $3.21 to $3.47 billion versus consensus of $3.55 billion.
Under Armour (NYSE: UA), the performance apparel, footwear and accessories maker, was jumping 3.8% to $50.23 on initial reaction to its quarterly results. The company posted earnings that were better than expected on revenues that were above consensus, while it slightly raised full year guidance. Under Armour said it earned $0.06 per share, $0.01 better than consensus, on revenues that jumped 26.8% from a year ago to $369.5 million.
United Parcel Services (NYSE: UPS), the package delivery and Logistics Company, will be in focus as it reports its quarterly results later this morning. On average analysts expect a profit of $1.17 per share on revenues of $13.70 billion. The highest earnings estimate is $1.19 per share, while the lowest is $1.11.
United Technologies (NYSE: UTX), the maker of Otis elevators and Carrier air conditioning systems, will be in focus amid a Reuters report stating that the Carlyle Group and BC Partners Ltd have teamed up and are in advanced discussions to acquire United Technologies industrial businesses. The deal that could value the pump and compressor businesses within United Tech's Hamilton Sundstrand subsidiary at more than $3.5 billion could come in the near future. The Hamilton Sundstrand industrial businesses unit is one of the three units the company put on the selling block to raise funds for its $16.5 billion acquisition of Goodrich Corporation.
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