Futures Higher ahead of the Fed and Jobs. Stocks to Watch: AAPL, CECO, CMCSA, COST, GM, HOG, MA, NOK, WYNN
Published on Wednesday, 01 August 2012 07:18 Written by Christopher Lynn
New York, August 1st (TradersHuddle.com) – Stock futures were pointing to a higher open amid another busy earnings-reporting morning and ahead of the latest figures in private employment in the U.S. The Fed will wrap its two-day meeting later today, while the ECB meeting on Thursday will be the sole focus before Friday’s key employment report.
In Asia, action was mixed after weak Chinese manufacturing data weighed on sentiment and as hopes for bold action from central banks faded somewhat. Chinese official factory purchasing managers’ index fell to 50.1 in July from 50.2 in June, a new eight month low. The reading was barely above 50, showing slight expansion in the month, but was below the 50.3 reading that was widely expected. The Shanghai Composite actually climbed nearly 1%, outperforming other Asian markets after comments from the country’s securities regulator encouraging companies with strong capital to buy back shares. In Japan, the Nikkei lost 0.61% impacted by the weak Chinese data and by poor earnings reports.
In Europe, markets were paring earlier gains on renewed doubts over the ECB delivering strong and decisive action to tackle the debt crisis. Participants turned jittery worrying that the Fed and the ECB might disappoint after the market had rally significantly on hopes for bold action to boost both economic growth and provide solutions for the deep debt crisis impacting the euro zone periphery. PMI data for July in the region showed declines from June readings and continued to showed contraction. German PMI fell to 43, while France to 43.4 and the euro zone PMI to 44.
The euro was climbing against the Dollar, trading above the $1.23 level. Crude oil was gaining 0.09% to $88.14 per barrel. Also in the energy complex, natural gas was losing 0.53% to $3.192 per MMBtu. Gold was adding 0.09% to $1611.90 an ounce, and silver was dropping 0.28% to $27.835 an ounce.
On economic news, at 8:15 am, payroll firm ADP will release its July Private Employment Report. At 9 am, the Final Markit Manufacturing PMI reading will be released and at 10 am, the July ISM Index and construction spending data will be available. At 10:30 am, the Energy Department will release its weekly report on crude oil and distillates inventories. Finally, at 2:15 pm, participants will receive the FOMC rate decision and policy statement.
Throughout the day, retailers and automakers will report their sales for July.
Today’s Stocks to watch: Apple (NASDAQ: AAPL), Career Education Corp. (NASDAQ: CECO), Comcast (NASDAQ: CMCSA), Costco Wholesale (NASDAQ: COST), General Motors (NYSE: GM), Harley Davidson (NYSE: HOG), MasterCard (NYSE: MA), Nokia (NYSE: NOK), and Wynn Resorts (NASDAQ: WYNN).
Apple (NASDAQ: AAPL), the maker of iPads and iPhones, was climbing 0.37% to $613 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. Yesterday, the first day of testimony at the trial in which Apple accuses Samsung of producing knockoffs of its iPhone and iPad products included Apple designer Christopher Stringer, who wrapped its testimony saying that he and his co-workers surmounted numerous engineering problems such as working with the products' glass faces in producing both products over a number of years. He added that he was upset when he saw Samsung's Galaxy products entered the market. The trial resumes Friday with the testimony of Apple senior vice president for marketing Philip Schiller. In the patent case, U.S. District Judge Lucy Koh last month ordered Samsung to pull its Galaxy 10.1 computer tablet from the U.S. market pending the outcome of the patent trial. However, she barred Apple attorneys from telling jurors about this ban.
Career Education Corp. (NASDAQ: CECO), the operator of postsecondary education schools, will be in focus after plunging nearly 19% to a new 52-week low in after hours. The company posted a massive loss in its second quarter, making it the latest to report poor performance in a space that faces a tougher operating environment. Career Education missed both on the top and bottom lines, saying that it lost $0.18 per share, excluding non-recurring items, $0.17 worse than consensus, on revenues that tumbled 23.9% from a year ago to $369 million.
Comcast (NASDAQ: CMCSA), the cable services provider and owner of NBC Universal, will be in focus and likely probe its 52-week high of $32.78 after it reported earnings that beat expectations on revenues that were inline with consensus. The Company said it earned $0.50 per share, $0.02 better than consensus, on revenues that climbed 6.1% from a year ago to $15.2 billion. Cable revenue increased 6.0% to $9.9 billion, driven by an 8.9% increase in High-Speed Internet revenue, a 34.2% increase in Business Services revenue and a 2.8% increase in Video revenue. During the second quarter of 2012, Comcast paid dividends totaling $438 million and repurchased 25.8 million shares for $750 million.
Costco Wholesale (NASDAQ: COST), the owner and operator of wholesale membership warehouses, will be in focus after announcing that same store sales for July climbed 5% from a year ago thanks to strong domestic performance. Declining gasoline prices for the four-week period and foreign currencies exchange impact had a negative impact on comparable sales in July, with domestic sales jumping 7%, while International sales were flat. Excluding the effects from gasoline prices and FX, sales jumped 7%, with domestic sales gaining 8% and International 7%. The retailer said that net sales for the month of July totaled 7.25 billion, an 8% increase from last year.
General Motors (NYSE: GM), one of the world’s largest automakers, will be in focus, along with other automakers, as they report their July sales figures. Total light motor vehicles sales in the U.S. rebounded in June to an annual rate of 14.1 million, thanks to strength in domestic produced cars (North America), which jumped 5.5% and in domestic light trucks, up 3.6 percent, for combined domestic units of 11.1 million annualized versus 10.6 million in May. For July consensus calls for 14 million units, with domestic vehicle sales reaching 11 million.
Harley Davidson (NYSE: HOG), the motorcycle maker, will be in focus after the company reported quarterly results that beat on the bottom line but missed on the top line. Harley Davidson said it earned $1.07 per share, $0.02 better than consensus, on revenues that jumped 17.1% from a year ago to $1.57 billion versus consensus of $1.63 billion. The company continues to expect to ship 245,000 to 250,000 motorcycles to dealers and distributors worldwide in 2012, a 5 to 7% increase from 2011.
MasterCard (NYSE: MA), the global payment solutions company, will be in focus as the company is scheduled to report its quarterly results later this morning. On average analysts expect a profit of $5.58 per share on revenues of $1.88 billion. The highest earnings estimate is $5.82, while the lowest is $5.36.
Nokia (NYSE: NOK), the struggling mobile phone maker, was surging 14% in pre-market on top of the 11% jump in the prior session. Shares were surging on heavy trading volumes amid speculation that Chinese PC maker Lenovo might have shown interest in the company.
Wynn Resorts (NASDAQ: WYNN), the luxury casino operator, will be in focus after the Macau Gaming Inspection and Coordination Bureau reported that July gross gaming revenue increased 1.5% from a year ago to 24.6 billion patacas. Macau gaming revenue is now up 16.8% year to date. Wynn generated about 72% of second quarter net revenues and 79% of adjusted EBITDA in Macau.
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