Stock Futures Higher on ECB Bond Buying Hopes. Stocks to Watch: AET, AAPL, BAC, CME, CVH, FB, LOW, WLK
Published on Monday, 20 August 2012 06:57 Written by Christopher Lynn
New York, August 20th (TradersHuddle.com) – Stock futures were pointing to higher open amid reports that the ECB might be considering yield triggers to purchase sovereign bonds from the troubled euro zone periphery. M&A was present again this Monday, with another deal in the healthcare sector, with Aetna attempting to increase the share of its government business.
In Asia, stocks ended mostly down, as participants digested the recent gains. Investor appetite for risk has risen amid hopes for central bank action around the world, particularly in China, U.S., and Europe. The Nikkei inched 0.09% to hit a three-month closing high, while the Shanghai Composite lost 0.38%. after chatter over further stimulus from China’s central bank eased, with Chinese press changing the tune, expressing in commentary that the central bank will not provide additional easing in the short-term.
In Europe, markets were trading with modest gains amid hopes for action from the ECB, designed to lower borrowing costs in the euro zone periphery. Germany’s Der Spiegel magazine suggested that the ECB would discuss implementing sovereign bond purchases at specific yield triggers.
The euro was losing against the Dollar, trading above the $1.23 level. Crude oil was climbing 0.12% to $96.13 per barrel. Also in the energy complex, natural gas was falling 0.81% to $2.697 per MMBtu. Gold was sliding 0.16% to $1614.70 an ounce, and silver was gaining 0.35% to $28.10 an ounce, meanwhile copper was retreating 0.95%.
Today’s Stocks to watch: Aetna (NYSE: AET), Apple (NASDAQ: AAPL), Bank of America (NYSE: BAC) CME Group (NASDAQ: CME), Coventry Healthcare (NYSE: CVH), Facebook (NASDAQ: FB), Lowe’s (NYSE: LOW), and Westlake Chemical (NYSE: WLK).
Apple (NASDAQ: AAPL), the maker of iPads and iPhones, was climbing 0.60% to $652 in pre-market, trading above its all-time high of $648.19 just posted in the prior session. On Friday the stock jumped 1.9% after Jefferies boosted its target price to $900 from $800 per share, with the firm citing the expected launch of the iTV the next year and the speculation that the iPad mini has gone into production. Apple has benefited from heightened expectations over its short-term product refresh cycle that includes the highly anticipated redesigned iPhone 5.
Bank of America (NYSE: BAC) was climbing 0.5% to $8.04 in pre-market. The stock jumped 3.4% last week, breaking above calculated resistance at $7.90, allowing it to move above $8 per share once again. Bank of America has not traded above $8 per share since early July.
CME Group (NASDAQ: CME), the largest futures exchange operator, will be in focus amid news that the company is in the process of applying to the United Kingdom's Financial Services Authority to create a London-based derivatives exchange. CME Europe will initially begin trading foreign exchange futures products and is expected to launch mid-2013, pending regulatory approval as a recognized investment exchange.
Coventry Healthcare (NYSE: CVH), the Maryland based managed healthcare provider, was surging 18% to $41.25 in pre-market on news that insurer Aetna (NYSE: AET) agreed to acquire the company for $7.3 billion including the assumption of debt. The deal pays Coventry’s shareholders a 20.4% premium from Friday’s closing price, or $42.08 per share, and will allow Aetna to increase the share of its revenue generated from Government business to 30% from 23%. Aetna will pay $27.40 per share in cash and 0.3885 Aetna common shares for each Coventry share.
Facebook (NASDAQ: FB), the social media Company, was climbing 1.21% to $19.28 in pre-market, after it stumbled 12.6% and posted a new all-time low of $19 last week amid the expiration of the first lockup period from its IPO. Last week, an analyst at Morningstar said that Facebook is extremely attractive and that the selloff due to the increase float is a buying opportunity on a stock that its currently trading well below his target price of $32 per share. Facebook went public at $38 per share.
Lowe’s (NYSE: LOW), the second largest home improvement retailer, after its quarterly results were shy of expectations and the company lowered its fiscal 2013 earnings and revenue guidance below consensus. The company earned $0.68 on revenue that fell 2% from a year ago to $14.25 billion versus consensus of $14.49 billion. Comparable store sales for the second quarter decreased 0.4%, while comparable store sales for the domestic business decreased 0.2%.
Westlake Chemical (NYSE: WLK), the vertically integrated manufacturer of basic chemicals, vinyls, polymers and fabricated products, will be in focus after the company increased its quarterly dividend by 150% to $0.1875 per share from $0.07375 per share.
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