Stock Futures Higher ahead of GDP Data. Stocks to Watch: APKT, AMZN, AAPL, CSTR, EXPE, FB, MRK, NEM, SBUX
Published on Friday, 27 July 2012 07:39 Written by Christopher Lynn
New York, July 27th (TradersHuddle.com) – Stock futures were pointing to a higher open amid earnings and ahead of GDP data in the U.S. Reports suggesting a coordinated action between the ECB and the euro zone bailout fund, which follow yesterday’s pledge from ECB President Draghi that the central bank will do whatever it takes to save the euro, were being offset by renewed concerns over political hurdles in the euro zone and dismal economic news out of Spain, with its unemployment rate hitting a staggering 24.6%.
In Asia, stocks gained on response to the pledge made by ECB President Mario Drgahi that the central bank will do whatever it takes to save the euro. Samsung Electronics rallied after reporting record profits for the June quarter on the back of strong sales of its Galaxy S smartphones. The Nikkei jumped 1.5%, boosted by exporters, as the yen weakened versus the euro, while the Shanghai Composite climbed 0.13%, logging a 1.8% loss for the week.
In Europe, markets were turning negative as the ECB pledge rally eased, amid renewed concerns over political hurdles, which could hinder any fresh stimulus measures from the central bank. Participants focused once again in the Spanish economy, as the country released its unemployment figures, showing a staggering 24.6% unemployment rate, and highlighting the challenges ahead for the euro zone.
The euro was falling against the Dollar, trading below the $1.23 level. Crude oil was climbing 0.08% to $89.46 per barrel. Also in the energy complex, natural gas was sliding 0.19% to $3.099 per MMBtu. Gold was adding 0.17% to $1617.90 an ounce, and silver was gaining 0.38% to $27.55 an ounce. Meanwhile, copper was trading flat.
On economic news, at 8:30 am, the Commerce Department will release its first reading for second quarter GDP, while at 9:55 am the University of Michigan will release its final reading on July Consumer Confidence.
Today’s Stocks to watch: Acme Packet (NASDAQ: APKT), Amazon.com (NASDAQ: AMZN), Apple (NASDAQ: AAPL), Coinstar (NASDAQ: CSTR), Expedia (NASDAQ: EXPE), Facebook (NASDAQ: FB), Merck (NYSE: MRK), Newmont Mining (NYSE: NEM), and Starbucks (NASDAQ: SBUX).
Acme Packet (NASDAQ: APKT) will be in focus after plunging more than 14% to $13.82 in after hours on reaction to inline quarterly results and full year guidance that was below consensus. Acme said it earned $0.13 per share on revenues that fell 15.2% from a year ago to $67.6 million. The company lowered its full year earnings and revenue guidance below consensus. Needham cut its target price to $11 from $13, citing slowing growth in the carrier SBC market, intensifying competition, and a potentially limited presence among Tier-1 wireless carriers deploying IMS architectures.
Amazon.com (NASDAQ: AMZN), the largest online retailer, was climbing 0.31% to $220.70 in pre-market despite the company issuing disappointing operating income guidance. Amazon earned $0.01 per share, inline with consensus, on revenues that jumped 29.5% from a year ago to $12.83 billion versus consensus of $12.88 billion. Additionally, the online retailer issued inline revenue guidance for the current quarter, while it results showed the growth of new business is boosting profit margins. The company’s product revenue that includes the core traditional online retailer business grew 25% to $10.79 billion, while its services revenue, which includes its cloud computing business Amazon Web Services surged 57% to $2.04 billion.
Apple (NASDAQ: AAPL), the maker of iPads and iPhones, was climbing 0.37% to $577 in pre-market in pre-market after failing to participate in the prior session rally. Participants were still digesting Tuesday’s big earnings miss and poor guidance for the current quarter, as the tech giant showed that it was not immune to the global economic woes. Reports showed that the iPhone 5 will likely launch in September, while Best Buy started a promotion offering the iPhone 4 at $49.99 with a 2-year service plan commitment, likely as a way to reduce inventories and paving the way for the new and redesign iPhone. Apple faces resistance from its 50day moving average, which is currently set around the $581 area. Yesterday, Hillard Lyons cut its target price on the stock to $735 from $740, while Exane BNP Paribas lowered its price target to $690 from $730.
Coinstar (NASDAQ: CSTR), the owner and operator of the redbox DVD rental kiosks chain, was plunging 13% to $51.50 in pre-market following reaction to its earnings and revenue miss. The company said it earned $1.11 per share, $0.05 worse than consensus, on revenue of $532 million versus consensus of $545 million. Coinstar issued upside earnings and inline revenue guidance for the current quarter, while it raised its full year guidance to inline with consensus. Compass Point lowered its target price on the stock to $60 per share.
Expedia (NASDAQ: EXPE), the owner of Expedia.com and Hotels.com, was surging 12.67% to $51.50 in pre-market after its earnings and revenues handily topped expectations. The company it earned $0.76 per share, $0.05 better than consensus, on revenues that climbed 13.8% from a year ago period to $1.04 billion versus consensus of 990 million.
Facebook (NASDAQ: FB), the social media Company, was tumbling 9.26% to $24.36 in pre-market on concerns over the company growth, as advertising revenue growth slowdown for the quarter. The company delivered it first quarterly results as a public company, with it slightly beating expectations on both the top and bottom line. The social media company earned $0.12 per share, excluding non-recurring compensation charges, $0.01 better than consensus on revenues that jumped 32.3% from a year ago to $1.18 billion versus consensus of $1.15 billion. Shares were logging fresh record lows below $25 per share as participants were disappointed also in the drop in operating margin and the lack of guidance.
Merck (NYSE: MRK), the maker of Singulair and Zocor, was rallying 3.83% to $44.99 in pre-market, trading above its 52-week high of $44.37, on initial reaction to its quarterly results that showed earnings and revenues beating expectations. The pharmaceutical company said it earned $1.05 per share excluding non-recurring items, $0.03 better than consensus, on revenues that climbed 1.3% from a year ago to $12.31 billion versus consensus of $12.16 billion. Additionally, the company reaffirmed its guidance for the full year 2012.
Newmont Mining (NYSE: NEM), the largest gold producer, was tumbling 3.45% to $44.50 in pre-market after its quarterly results missed expectations by a wide margin. Newmont said it earned $0.59 per share, $0.38 worse than consensus, on revenues that fell 6.5% from a year ago to $2.23 billion versus consensus of $2.53 billion. The gold miner reported that attributable gold and copper production of 1.18 million ounces and 38 million pounds, down 3% and 10%, respectively, from the prior year; while attributable gold and copper sales of 1.14 million ounces and 29 million pounds, down 6% and 35%, respectively, from the prior year quarter
Starbucks (NASDAQ: SBUX), the largest coffee shop chain in the world, was plunging 11% to $46.64 in pre-market after its disappointing fiscal third quarter quarterly results and fiscal fourth quarter and fiscal 2013 guidance. The company said it earned $0.43 per share, $0.02 worse than consensus, on revenues that climbed 12.7% from a year ago to $3.3 billion versus consensus of $3.34 billion. The coffee chain lowered fiscal fourth quarter guidance below consensus due to global economic conditions. It also issued downside guidance for fiscal 2013. Robert W. Baird downgraded the stock to a Neutral from Outperform, while cutting its target price to $50 from $65.
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