Stock Futures Higher on ECB Hopes. Stocks to Watch: ANF, AAPL, CVX, DD, FSLR, K, MON, SNE, RIG

Published on Thursday, 02 August 2012 07:37 Written by Christopher Lynn

New York, August 2^nd (TradersHuddle.com) – Stock futures were pointing to a higher open, as participants were expecting that the ECB will signal bold actions that will help tackle the debt crisis in the region, which will prevent the euro from collapsing. Participants hopes were running high after the Fed disappointed investors by not introducing new stimulus measures, but just acknowledging economic activity slowdown in the first half of the year.

In Asia, most stocks fell amid uncertainty from the ECB policy statement and after the Fed held steady, not providing any new stimulus measures. The Nikkei advanced 0.13%, as hopes for ECB action offered support, while the Shanghai Composite lost 0.57%. Shares in Shanghai suffered their third loss in four sessions, as property stocks dragged the index lower after a report speculated that there could be new curbs in the sector to reduce property speculation.

In Europe, markets were trading higher ahead of the end of the ECB meeting and after the Bank of England left rates and asset purchase program unchanged as expected Markets around the world had rallied in the prior sessions on speculation the central bank will deliver bold actions to tackle the debt crisis in the region. A good Spanish debt auction and better than expected U.K. construction PMI have helped sentiment ahead of the ECB news.

The euro was climbing against the Dollar, trading above the $1.22 level. Crude oil was gaining 0.63% to $89.47 per barrel. Also in the energy complex, natural gas was losing 0.79% to $3.146 per MMBtu. Gold was adding 0.02% to $1604 an ounce, and silver was dropping 0.09% to $27.51 an ounce, meanwhile copper was retreating 0.15%.

On economic news, at 8:30 am the Labor Department will release its weekly jobless claims report and at 10 am June factory orders figures will be available.

Today’s Stocks to watch: Apple (NASDAQ: AAPL), Abercrombie & Fitch (NYSE: ANF), Chevron (NYSE: CVX), DuPont (NYSE: DD), First Solar (NASDAQ: FSLR), Kellogg (NYSE: K), Monsanto (NYSE: MON), Sony (NYSE: SNE), and Transocean (NYSE: RIG).

Abercrombie & Fitch (NYSE: ANF), the specialty-clothing retailer, was tumbling 16% to $28.55, trading below its 52-week low of $29.51, after it disappointed investors with poor guidance and falling sales figures. Abercrombie issued downside guidance for fiscal second quarter, saying that it sees EPS in a range of $0.15 to $0.18 versus consensus of $33. The retailer sees revenues of $951 million, below consensus of $1.01 billion. For fiscal 2013, the company lowered its guidance to earnings of $2.50 to $2.75 per share from a prior guidance of $3.5o to $3.75 per share. Abercrombie said comparable sales were down 5% in domestic stores, while international same store sales tumbled 26% internationally. The retailer cited challenging macroeconomic conditions, particularly in Europe, but also increasingly in the U.S. Robert W. Baird downgraded the stock to a Neutral from Outperform, slashing its target price to $33 from $55. The firm cited expectations for further weakness particularly in Europe.

Apple (NASDAQ: AAPL), the maker of iPads and iPhones, was climbing 0.33% to $608.80 in pre-market as the trial over Samsung copying designs from the iPhone and the iPad will continue tomorrow in a California Federal court. The iPhone maker said that its asking a Federal judge to impose sanctions to Samsung over a statement released on July 31^st, which was designed to convey to jurors, through the media, showing that the company had some designs for a smartphone prior to the iPhone, rebutting Apple’s central allegations that the South Korean company copied the iPhone and the iPad designs. Apple seeks $2.5 billion in damages. Yesterday, Jim Cramer on its Mad Money show said that Apple’s recent rebound might not be only from the talk of the new iPhone 5 launch, but also from the guidance that Cirrus Logic presented. Cirrus said that it expects a 70% jump in revenue from the prior quarter, with Cramer saying that its likely attributed to a gigantic iPhone build using Cirrus Logic’s next generation technology, which includes the highest quality audio chips that use the least amount of power. The stock has all but erased all of its losses from the big earnings miss next month and it’s trading in anticipation of the iPhone 5 and iPad mini launch.

Chevron (NYSE: CVX), the U.S. second largest energy producer, and Transocean (NYSE: RIG), the largest offshore drilling contractor in the world, will be in focus after a Brazilian court ordered both companies to suspend all oil production and transport operations in Brazil while prosecutors investigate a November oil spill. The decision, which will likely be appealed, is part of the efforts from Brazilian special prosecutors to get Chevron and Transocean to pay as much as $20 billion for the spill at Frade, which was about 1000 times smaller than the 2010 BP Macondo spill in the Gulf of Mexico. The court injuction has the potential to shut down up to 10% of oil production in South America, as other oil companies, like Petrobras, working with Transocean will be impacted. If the court decision is upheld, Transocean stands to lose $3.5 million a day in lease fees from its 10 Brazilian rigs.

First Solar (NASDAQ: FSLR), the largest maker of thin film solar modules in the world, was surging 24.32% to $18.40 after reporting quarterly results that beat on the top line and providing upside revenue guidance for the full year. The company said it reported a profit of $1.27 per share, which might not be comparable to consensus of $0.92 per share, on revenues that jumped 79.5% from a year ago to $957 million versus consensus of $822.19 million. The stock was upgraded to Outperform from Neutral at Robert W. Baird, with the firm raising its target price to $30 from 25. The firm noted that pipeline execution remains strong and that the company’s balance sheet is much better than competitors.

Kellogg (NYSE: K), the maker of Frosted Flakes cereal, will be in focus, as the company will be reporting its quarterly results later this morning. On average analysts expect a profit of $0.84 per share on revenues of $3.38 billion. The highest earnings estimate is $0.87 per share, while the lowest of $0.81.

Monsanto (NYSE: MON), the agricultural business company, will be in focus after a Federal Court jury finds in favor of Monsanto in a Patent Case awarding $1 billion in damages. Monsanto won a patent infringement trial in the U.S. District Court against DuPont Pioneer. The trial had centered on DuPont's unauthorized use of Monsanto's patented Roundup Ready technology. The jury said that DuPont (NYSE: DD) and DuPont Pioneer had willfully infringed Monsanto's patented Roundup Ready technology when it tried to patch the problems with DuPont's own Optimum GAT technology that had failed in earlier development. DuPont said that it strongly disagrees with the verdict and expects to appeal at the earliest possible opportunity. 

Sony (NYSE: SNE), the consumer electronics Company maker of the Playstation and Bravia TVs, was tumbling 4.45% to $11.60 in pre-market after the Japanese company reported weak results that missed on revenue expectations, while lowering its guidance for fiscal 2013. The company said that its results and guidance reflect a decrease in consumer electronics products demand.