Stock Futures Lower amid EU Jitters. Stocks to Watch: AAPL, T, GNOM, FB, GM, JPM, LDK, TSLA
Published on Monday, 17 September 2012 07:17 Written by Christopher Lynn
New York, September 17th (TradersHuddle.com) – Stock futures were pointing to a lower open, as the Fed induced rally wanes amid mixed overseas action. European debt crisis jitters returned as Spanish unions rallied against austerity measures and a policymaker at the ECB said that Spain first need to asks for a bailout to be able to qualify for assistance from the central bank. Stocks had surged to new multiyear highs on the back of Ben Bernanke’s announcement of an open-ended stimulus.
In Asia, stocks finished mixed amid commodities like oil, gold and copper trading at multi-month highs, as prices reacted to stimulus announced around the world in the prior two weeks. However, Chinese stocks slumped, underperforming other Asian peers, as property related stocks dragged the Shanghai Composite to a 2% loss. Data showed weaker than expected home sales, suggesting that prior curbs in the sector aim to reduce speculation have started to impact in the traditional peak-selling season. Japan’s market was closed for public holiday.
In Europe, markets were trading lower amid jitters following a rally in Madrid from Spanish workers unions against austerity measures. Both Spanish and Italian bond yields ticked higher after an ECB policymaker reminded Spain that it needs to apply for a bailout package to be able to qualify for the central bank’s bond-buying program.
The euro was losing against the Dollar, but still trading just above the $1.31 level. Crude oil was falling 0.17% to $98.83 per barrel. Also in the energy complex, natural gas was climbing 0.54% to $2.959 per MMBtu. Gold was sliding 0.05% to $1769.30 an ounce, and silver was dropping 0.29% to $34.555 an ounce; meanwhile copper was retreating 0.77%.
On economic news, at 8:30 am the New York Fed will release its Empire State Manufacturing Index.
Today’s Stocks to watch: Apple (NASDAQ: AAPL), AT&T (NYSE: T), Compete Genomics (NASDAQ: GNOM), Facebook (NASDAQ: FB), General Motors (NYSE: GM), JPMorgan (NYSE: JPM), LDK Solar (NYSE: LDK), and Tesla Motors (NASDAQ: TSLA).
Apple (NASDAQ: AAPL), the maker of iPads and iPhones, was climbing 0.46% to $694.45 in pre-market, adding to last week’s gains on news that AT&T sold a record iPhone 5s over the weekend. The second largest wireless carrier in the U.S. said that the iPhone 5 was the fastest-selling iPhone the company has ever offered, confirming Friday’s reports for strong demand in pre-orders. The stock set an all-time high of $696.98, which seems within reach in this session, as it continues to march towards the $700 level. Apple gained 1.6% last week, extending its year to date surge to 70.7%.
AT&T (NYSE: T) will be in focus after it said the iPhone 5 was the fastest-selling iPhone ever on the first weekend it was offered. The stock stumbled more than 2% on Friday after Stifel Nicolaus downgraded the stock to a Hold from Buy, citing recent stock gains and concern that increased sales for the iPhone 5 could result in short-term margin pressure due to the subsidies they incur on each device.
Compete Genomics (NASDAQ: GNOM) would likely see upside after it signed a definitive agreement to merge with BGI-Shenzhen, an international genomics company based in Shenzhen, China. Under the agreement a wholly owned U.S. subsidiary of BGI will launch a tender offer to purchase all outstanding shares of common stock of Complete Genomics for $3.15 per share in cash, an 18% premium from Friday’s closing price and a 54% premium to the $2.04 closing price per share on June 4, 2012, the last trading day prior to Complete Genomics’ announcement that it was undertaking an evaluation of strategic alternatives.
Facebook (NASDAQ: FB), the social media giant, was sliding 0.14% to $21.97 after posting its best trading week since its IPO, rallying more than 15%. The stock received a boost after CEO Mark Zuckerberg gave bullish comments at the Tech Crunch conference regarding the company’s mobile prospects, adding that it’s a good time for employees to double down on the stock. On Friday the Financial Times reported that the social media company was set to roll out its real-time ad-bidding platform. Despite the gains and excitement regarding Facebook’s mobile prospects. Evercore Partners cut its target price last week on concern over Facebook losing share in the mobile segment to Google. The firm reiterated its Equal Weight rating, while cutting its target price to $23 from $34.
General Motors (NYSE: GM), one of the world’s largest automakers, will be in focus after the Wall Street Journal reported that the U.S. Treasury was resisting a GM plan for the company will repurchase 200 million of the roughly 500 million shares the government holds. The Treasury, which holds a 26.5% stake in the carmaker, is not rushing to a sell, as if the whole stake is sold at current prices it would result in a $15 billion loss for the government. The politically charged season makes it less likely for the Treasury to exit its stake, particularly when the President is highlighting the success of the auto bailout, but conveniently leaving out the costs.
JPMorgan (NYSE: JPM) will be in focus, as according to several reports, the lender faces a money-laundering probe by U.S. officials. The regulatory probe appears to be focused on the systems and personnel that JPMorgan uses to safeguard against illicit money flows. According to some reports, which name an unidentified source, JPMorgan faces being hit with a regulatory order by the U.S. Office of the Comptroller of the Currency, which would identify lapses and require the bank to tighten the anti-money laundering systems it uses.
LDK Solar (NYSE: LDK), the maker of multi-crystalline solar wafers, was tumbling 6.45% to $1.16 in pre-market after results missed on both the bottom and top lines and after the company issued downside revenue guidance for the current quarter and full year 2012. LDK reported second quarter GAAP net loss of $2 per share versus consensus of a loss of $1.43. Revenue slumped 53% from a year ago to $235.4 million versus consensus of $237.5 million. For the third quarter, LDK Solar estimates its revenue to be in the range of $220 to $260 million versus consensus of $460 million, and for fiscal 2012, the company estimates its revenue to be in the range of $1 to $1-1.5 billion versus consensus of 1.69 billion.
Tesla Motors (NASDAQ: TSLA), the electric power train automaker, was jumping 6.94% to $30.39 in pre-market after Morgan Stanley upgraded the stock to Overweight from Underweight. The firm boosted it target price to $50 from $45, saying that fears of a slower than expected introduction of Tesla's Model S are overdone.
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