Stock Futures Higher on Fed Hopes. Stocks to Watch: AAPL, BIG, BA, FB, GES, HPQ, HRL, PSUN, CRM
Published on Thursday, 23 August 2012 07:04 Written by Christopher Lynn
New York, August 23rd (TradersHuddle.com) – Stock futures were pointing to a higher open after the latest FOMC meeting minutes released yesterday showed further monetary stimulus was likely, as policymakers appeared dissatisfied with the outlook for the world’s largest economy. The easing hopes helped overseas markets to move to the upside, while data in China showing its factory output dropping to its lowest level in 9 months capped the gains.
In Asia, stocks gained after the FOMC meeting minutes showed that the Fed left the impression that the Fed was closer to announcing additional easing to boost the sluggish U.S. economy. However, the upside move was capped after the HSBC Flash China manufacturing purchasing managers index fell in August to its lowest level since November, as new export orders slumped and inventories rose. The Shanghai Composite gained 0.3%, while the Nikkei gained 0.5%, hitting a three-month closing high.
In Europe, markets were trading to the upside after the Fed appeared closer to implement a third round of quantitative easing. The Fed hopes were outweighing concerns over the euro zone debt crisis, while better than expected PMI readings in France and Germany also provided some level of support for the move.
The euro was gaining against the Dollar, trading above the $1.25 level. Crude oil was climbing 0.79% to $98.03 per barrel. Also in the energy complex, natural gas was gaining 0.32% to $2.835 per MMBtu. Gold was adding 1.5% to $1662.80 an ounce, and silver was rallying 2.94% to $30.425 an ounce, meanwhile copper was advancing 1.24%.
On economic data, at 8:30 am, the Labor Department will release its Weekly Jobless Claims report and at 9:00 am the preliminary reading for the Markit Manufacturing PMI will be available. At 10 am, July New Home Sales figures will be released and at 10:30 am natural gas inventories data will be available.
Today’s Stocks to watch: Apple (NASDAQ: AAPL), Big Lots (NYSE: BIG), Boeing (NYSE: BA), Facebook (NASDAQ: FB), Guess? (NYSE: GES), Hewlett Packard (NYSE: HPQ), Hormel Foods (NYSE: HRL), Pacific Sunwear of California (NASDAQ: PSUN), and Salesforce.com (NYSE: CRM).
Apple (NASDAQ: AAPL), the maker of iPads and iPhones, was climbing 0.55% to $672.54 in pre-market, after it posted a new all-time closing high of $668.87 in the prior session. The stock was boosted by Needham raising its target price to $750 from $620. Apple logged a new all-time high of $674.88 earlier this week amid heightened expectations for its short-term product refresh cycle that includes the released of the redesigned iPhone 5 in September. Apple has gained more than 16% since the company’s big earnings miss on July 24th.
Big Lots (NYSE: BIG), the closeout retailer, will be in focus after the company missed earnings and revenue expectations and lowered its fiscal 2013 EPS guidance below consensus. Big Lots said it earned $0.36 per share, $0.05 worse than consensus, on revenue that climbed 4.4% from a year ago to $1.22 billion, slightly below consensus of $1.24 billion. The company lowered its fiscal 2013 EPS guidance, as it expects U.S. comparable store sales decline in the low single digit range and a total U.S. sales increase in the range of 3% to 4%.
Boeing (NYSE: BA), the world’s second largest commercial aircraft maker, will be in focus amid news that Quantas was cancelling orders for 35 787 Dreamliners after it posted its first loss since the airline was privatize 17 years ago. The decision to cut spending commitments came after the Australian airline swung to a loss amid an increase in jet fuel price. The order is valued at $8.5 billion at Boeing’s list prices.
Facebook (NASDAQ: FB), the social media Company, was gaining 0.98% to $19.63 in pre-market, after it jumped nearly 1.5% in the prior session, rebounding from the recent bout of selling following the first expiration of the lockup period from its IPO, allowing early investors to sell their shares. Last week, early investor and board member Peter Thiel sold 22 million shares of the social media company, which is the majority of its stake. Separately, the Federal Trade Commission has closed its nonpublic investigation of Facebook's proposed acquisition of Instagram without taking any action.
Guess? (NYSE: GES), the denim and cotton casual clothing maker and retailer, will be in focus after plunging more than 16% to $28.09 in afterhours, following reaction to its quarterly results and weak outlook. The company earned $0.49 per share, $0.01 worse than consensus, on revenue that fell 6.2% from a year ago to $635.4 million versus consensus of $630.49 million. Guess said that its second quarter operating margin was 9%, which was below its prior guidance of 10 to 10.5%. The retailer issued downside guidance for the current quarter and lowered its fiscal 2013 guidance, as it sees fiscal 2013 comps declining mid to high single digits.
Hewlett Packard (NYSE: HPQ), the world’s largest PC maker, was tumbling 5.4% to $18.17 in early reaction to its quarterly results, guidance and commentary from the earnings conference call. The company posted earnings that were inline with its preannouncement on revenue that was shy of consensus. The tech giant lowered its fiscal 2012 earnings guidance to inline with consensus. HP earned $1 per share, excluding non-recurring items, $0.02 better than consensus, on revenues that fell 4.9% from a year ago to $29.67 billion versus consensus of $30.19 billion. Management was very cautious about the global macroeconomic environment throughout the conference call, describing Brazil’s performance as medium to mixed and China’s as not as strong as we would have liked.
Hormel Foods (NYSE: HRL), the maker of canned meats like Spam, will be in focus after reporting quarterly result that were inline with consensus. Also, the company reaffirmed its 2012 EPS earnings guidance. Hormel earned $0.41 per share on revenue that climbed 5.1% from a year ago to $2.01 billion. The company expects that increased grain costs will present a challenge in the future quarters, but cited that the strength of its balanced business model and the vibrancy of its branded, value-added portfolio to help support earnings and sales growth.
Pacific Sunwear of California (NASDAQ: PSUN) will be in focus after the stock surged 9% to $2.37 in afterhours on reaction to quarterly results that topped expectations and inline guidance for the current quarter. The company reported a loss of $0.08 per share, $0.04 better than consensus, on revenue that climbed 5.0% from a year ago to $210.9 million versus consensus of $203.1 million. The retailer said that comparable store sales climbed 5% in the second quarter.
Salesforce.com (NYSE: CRM), the provider of Internet based customer relationship management software, will be in focus as participants wait for its earnings report, which is scheduled for after the closing bell. On average analysts expect a profit of $0.39 per share on revenue of $728.32 million. The highest earnings estimate is $0.40 per share, while the lowest is $0.37. Last quarter, the company earned $0.37 per share, beating expectations by 8.8%. Yesterday, Oppenheimer said that it expects favorable second quarter results from the company after its checks suggest Salesforce experienced positive trends in the last 3 months.
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