Stock Futures Higher ahead of the Fed. Stocks to Watch: APC, AAPL, ADM, BP, COH, DNDN, HUM, PFE, STX
Published on Tuesday, 31 July 2012 08:08 Written by Christopher Lynn
New York, July 31st (TradersHuddle.com) – Stock futures were pointing to a higher open amid a busy earnings-reporting morning. Investors remained cautious as the Fed starts its two-day meeting and ahead of the ECB meeting later in the week. The market has rallied since last week on expectations both central banks will be able to provide additional stimulus measures to boost growth and tackle the debt crisis in the euro zone.
In Asia, most stocks climbed as the hopes for further stimulus from the ECB and the Fed kept an underlying bid in Asian markets. The Nikkei climbed 0.7%, but still logged its worst July performance in five years. The Index received a boost from Cannon, announcing another stock repurchase program and by Mitsubishi Electric reporting better than expected earnings. In China, the Shanghai Composite fell 0.3%, logging a 5.5% drop in July, as economic slowdown worries continued to weigh on performance. After the close, Chinese President Hu Jintao reiterated that China will maintain a prudent monetary policy and a proactive fiscal policy, hinting at an increase to fiscal and monetary policy support in back half of year, while Premier Wen commented that there could be further tax cuts.
In Europe, markets were somewhat resilient, trading mixed as the ECB rally faded amid weak earnings from major players like UBS, Deutsche Bank, and BP. Participants were also somewhat reluctant to commit to a direction, amid the lack of clear evidence that the European Central Bank will be able to meet expectations and deliver strong measures to tackle the crisis. German July unemployment came in at 6.8%, the same rate than in June, while the euro zone unemployment moved lower to 11.2%.
The euro was climbing against the Dollar, trading below the $1.23 level. Crude oil was gaining 0.37% to $90.11 per barrel. Also in the energy complex, natural gas was losing 0.37% to $3.202 per MMBtu. Gold was adding 0.30% to $1624.60 an ounce, and silver was jumping 0.86% to $28.275 an ounce. Meanwhile, copper was advancing 0.93%.
On economic news, at 8:30 am June Personal income and spending will be released. At 8:45 am, July Chicago PMI will be released and at 9 am, the May Case-Schiller S&P 20-city Home price index will be available. July Consumer Confidence will be released at 10 am.
Today’s Stocks to watch: Anadarko Petroleum (NYSE: APC), Apple (NASDAQ: AAPL), Archer-Daniels Midland (NYSE: ADM), BP (NYSE: BP), Coach (NYSE: COH), Dendreon (NASDAQ: DNDN) Humana (NYSE: HUM), Pfizer (NYSE: PFE), and Seagate Technology (NASDAQ: STX).
Anadarko Petroleum (NYSE: APC) will be in focus after the independent oil and natural gas producer swung to a loss, as it recorded a $978 million charge on its coalbed methane properties because of low natural gas prices. However, Anadarko reported adjusted earnings that beat expectations on revenues that fell short of consensus. The company said that for its second quarter it earned $0.85 per share, $0.07 better than consensus, on revenues that fell 12.4% from a year ago to $3.22 billion amid a drop in energy prices. Output for the oil and gas producer hit a record of 68 million barrels of oil equivalent, prompting the company to raise its full-year guidance.
Apple (NASDAQ: AAPL), the maker of iPads and iPhones, was climbing 0.77% to $599.69 in pre-market adding to its prior session jump amid speculation the company is gearing up to unveil its new iPhone 5 along with the iPad mini on September 12th. According to reports, Apple might also introduce a revamped iPod nano. The stock was also moving to the upside, as the patent infringement case in a California Federal Court is set to start with opening statements from Apple and Samsung after the Jury was selected yesterday. Both smartphone and tablet rivals are set to face off over control of the lucrative U.S. market. Apple filed a lawsuit last year against Samsung, alleging that the South Korean Company violated its patents and made illegal knockoffs of its popular iPhone and iPad products.
Archer-Daniels Midland (NYSE: ADM), the agricultural products processor, will be in focus as the company is scheduled to report its quarterly earnings later this morning. On average analysts expect a profit of $0.60 per share on revenues of $21.75 billion.
BP (NYSE: BP), the U.K. energy giant, was falling 3.3% to $40.43 in pre-market amid negative reaction to its earnings report. The company reported a loss for the quarter of $1.385 billion on a replacement cost basis after taking a $4.8 billion charge in the second quarter, made against the declining value of U.S. refineries and U.S. shale gas assets, amid a slump in natural gas prices, and for the suspension of its Liberty project in Alaska. Adjusted for the non-recurring items, profit was $3.685 billion, below expectations of about $4.8 billion. BP said that the underlying results were depressed by weaker oil and U.S. natural gas prices, coupled with reduction in output due to extensive planned maintenance, particularly in the Gulf of Mexico. Additionally, the company BP said it had lower income from its Russian joint venture, TNK-BP, in which management failed to negotiate a $1 billion special dividend payout that was rejected by directors of a consortium of billionaires who co-own the Anglo-Russian oil venture.
Coach (NYSE: COH), the leading American designer and maker of luxury lifestyle handbags and accessories, will be in focus as the company will be reporting its earnings ahead of the open. On average analysts expect a profit of $0.85 per share on revenues of $1.20 billion.
Dendreon (NASDAQ: DNDN) will be in focus after plunging more than 19% in after hours to $4.98, which is below its 52-week low of $5.69. The stock reacted poorly after the company missed earnings expectation on revenues that were below consensus. Dendreon reported a loss of $0.61 per share, ex-items, $0.04 worse than consensus, on revenues that surged 66% from a year ago to $80 million. The company remains confident on long-term prospects for Provenge, while announcing a strategic restructuring plan that accelerate the path to profitability and future growth, as it intends to save the company $150 million. The stock was downgraded to a Hold from Buy at Deutsche Bank
Humana (NYSE: HUM), the managed healthcare provider, will be in focus after plunging nearly 9% in after hours to $64.30, below its 52-week low of $65.20, on reaction to its quarterly results and weak guidance. The company said it earned $2.16 per share, including $0.18 in expenses related to a litigation settlement, versus consensus of $2.21 per share. Revenues climbed 4.5% from a year ago to $9.70 billion, below consensus of $9.83 billion. Humana issued downside guidance for the current quarter and full 2012.
Pfizer (NYSE: PFE), the world’s largest pharmaceutical company, was jumping 1.35% to $24.03 after its quarterly results. The company said it earned $0.62 per share, $0.08 better than consensus, on revenues of $15.06 billion, above consensus of $14.91 billion. Pfizer reaffirmed its 2012 guidance, seeing EPS on a range of $2.14 to $2.24 versus consensus of $2.21.
Seagate Technology (NASDAQ: STX), the maker of hard drives and storage solutions, was tumbling more than 7% in pre-market to $28.10, following negative reaction to its quarterly results. The company missed on both the top and bottom lines, saying that it earned $2.41 per share, $0.12 worse than consensus, on revenues that surged 56.8% from a year ago to $4.48 billion. Seagate also announced that it would increase its quarterly dividend by 28% to $0.32 per share, while saying that it sees fiscal 2013 EPS growth of at least 25%, which was better than consensus of 18%.
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