Futures Higher amid Central Bank Action Hopes. Stocks to Watch: AAPL, CF, CHK, C, ELN, EMR, FB, MGM, SIRI
Published on Tuesday, 07 August 2012 06:54 Written by Christopher Lynn
New York, August 7th (TradersHuddle.com) – Stock futures were pointing to a higher open amid some mixed action in overseas markets. Participants pushed stocks to three-month highs on the back of the better than expected jobs report last week and as optimism grew that the ECB will ultimately act with swift measures that will help stabilize debt markets in the euro zone.
In Asia, stocks gained as hopes for policy action from the ECB that will tackle the debt crisis in Europe, coupled with expectations that China will adopt stimulus measures to boost growth maintained an underlying bid in markets around the region. The Nikkei gained 0.88%, extending its prior session rally, as steelmakers received a boost from news that U.S. AK Steel (NYSE: AKS) announced a price increase in its products. Meanwhile, the Shanghai Composite climbed 0.13%, logging its third straight session advance and closing at its highest level in two weeks.
In Europe, most markets were trading higher after erasing earlier losses amid increased optimism that the ECB will step up and buy Italian and Spanish debt sometime next month. Italy’s GDP reading for the second quarter, despite contracting 0.7%, came slightly ahead of expectations, while the FTSE in the U.K. was underperforming weighed down by a drop in the country’s industrial production in July and by poor performance from Standard Chartered, plunging 15%, on news that it completed unlawful transactions with Iran.
The euro was flat against the Dollar, trading above the $1.24 level. Crude oil was climbing 0.23% to $92.41 per barrel. Also in the energy complex, natural gas was losing 0.41% to $2.896 per MMBtu. Gold was adding 0.17% to $1615.70 an ounce, and silver was gaining 0.22% to $27.925 an ounce, meanwhile copper was advancing 0.68%.
On economic news, at 3 pm June consumer credit data will be released.
Today’s Stocks to watch: Apple (NASDAQ: AAPL), CF Industries (NYSE: CF), Chesapeake Energy (NYSE: CHK), Citigroup (NYSE: C), Elan (NYSE: ELN), Emerson (NYSE: EMR), Facebook (NASDAQ: FB), MGM Resorts (NYSE: MGM), and Sirius XM Radio (NASDAQ: SIRI).
Apple (NASDAQ: AAPL), the maker of iPads and iPhones, was climbing 0.3% to $624.40 in pre-market, after closing above its 3-½ month high resistance at $620. The stock continues to trade on high expectations over its near term product refresh cycle that includes the new iPhone 5, a potential iPad mini in the fall, and a potential iTV sometime next year. There is also increased chatter in the market about Apple making a play in the social media area, perhaps making an investment or a joint venture. According to reports, Apple and rival Google have submitted bids in the patent auction by Eastman Kodak, scheduled for August 8th.
CF Industries (NYSE: CF), the North American manufacturer and distributor of agricultural fertilizers, will be in focus after gaining 2% in after hours following positive reaction to its earnings report. The company reported earnings that topped expectations on revenues that missed consensus. CF said that for its second quarter it earned $8.71 per share, excluding non-recurring items, $0.05 better than consensus, on revenues that fell 3.7% from a year ago to $1.74 billion from $1.92 billion. The company Nitrogen sold 3.5 million tons of ammonia, granular urea, urea ammonium nitrate solutions, ammonium nitrate and other nitrogen products during the quarter compared to 3.8 million tons in the same period a year ago 2011. While, its Phosphate segment sold 493,000 tons of products in the quarter compared to 538,000 tons in the second quarter of 2011.
Chesapeake Energy (NYSE: CHK), the natural gas and oil producer, will be in focus after jumping nearly 3% to $18.22 in after hours on positive reaction to its quarterly results. The company missed earnings expectations, but beat revenue consensus. Chesapeake said it earned $0.06 per share, $0.03 worse than consensus, on revenues that climbed 2.1% from a year ago to $3.39 billion versus consensus of $2.42 billion.
Citigroup (NYSE: C), the diversified financial services firm, will be in focus after Barclays said that the lender might need to take a charge of nearly $6 billion this quarter to account for a markdown in the valuation of the retail brokerage business it owns with Morgan Stanley. Citi said last month that Morgan Stanley estimates that Morgan Stanley Smith Barney is worth less than half, as much Citigroup believes it is. The disagreement in valuation came as Morgan Stanley tried to buy another 14% of the joint venture, beyond the 51% it already owns. According to the report, the third largest bank in the U.S. said the value of the business is $22 billion, while Morgan Stanley said its $9 billion.
Elan (NYSE: ELN), the neuroscience-based biotechnology company, will be in focus after tumbling more than 12% to $11.25 in after hours. Partner Johnson & Johnson (NYSE: JNJ) announced discontinuation of Phase 3 development of bapineuzumab IV in mild to moderate Alzheimer's disease after Pfizer announced that co-primary clinical endpoints, change in cognitive and functional performance compared to placebo, were not met in the Janssen Alzheimer Immunotherapy R&D LLC led Phase 3 trial.
Emerson (NYSE: EMR), the electric motor maker, will be in focus after its earnings topped expectations on revenues that were below consensus. The company also lowered its full year guidance to reflect weaker environment and current currency exchange rates. Emerson said it earned $1.04 per share, $0.04 better than consensus, on revenues that climbed 3.1% from a year ago to $6.48 billion versus consensus of $6.6 billion. Underlying sales grew 6%, as currency translation deducted 3%, with the U.S. up 6%, Asia up 9%, and Europe unchanged from the prior year.
Facebook (NASDAQ: FB), the social media Company, was gaining 0.37% to $22 in pre-market, extending its rebound from its all-time low of $19.82. The stock had been a free fall after its quarterly results and lack of guidance, spurred concerns over the business model and the company’s ability to monetize its rapidly growing mobile platform. But, last Friday, the better than expected results from LinkedIn and a bullish report from Standpoint Research, which stated that the social network giant will be able to raise advertising revenue, helped change momentum.
MGM Resorts (NYSE: MGM), the hospitality and gaming Company owner of properties like the Bellagio and MGM Grand in Las Vegas, NV, will be in focus as it reports earnings later this morning. On average analysts expect a loss of $0.14 per share on revenues of $2.35 billion. The lowest earnings estimate is a loss of $0.21, while the highest is a loss of $0.08.
Sirius XM Radio (NASDAQ: SIRI), the satellite radio provider, will be in focus after the company reports its quarterly results later this morning. On average analysts expect a profit of $0.02 per share on revenues of $834.4 million. The lowest earnings estimate is a $0.01, while the highest is of $0.02. Sirius XMadded over 1 million net subscribers in the first half of 2012. At June 30, 2012, the company had over 22.9 million subscribers.
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