Futures Slightly Higher Ahead of Housing Data. Stocks to Watch: AAPL, CCL, CAT, FB, GOOG, PAYX, OKE, OKS, RHT

Published on Tuesday, 25 September 2012 07:08 Written by Christopher Lynn

New York, September 25^th (TradersHuddle.com) – Stock futures were pointing to a slightly higher open ahead of housing data that is expected to show further gains in the struggling sector. Global growth jitters and uncertainty over the debt crisis in the euro zone periphery continued to weigh on overseas markets, keeping participants in a cautious mood.

In Asia, stocks struggled amid ongoing worries over global growth, following a drop in German business confidence in September and after Caterpillar, the world’s largest maker of earthmoving equipment and global economic bellwether lowered its earnings forecast. Uncertainty over the debt crisis in Greece and Spain, also weighed on investors’ confidence. The Nikkei climbed 0.25%, as participants bid stocks ahead of a dividend deadline. Meanwhile, the Shanghai Composite slid 0.19% after China’s central bank injected a record amount of funds in to the market, slashing expectations of a new cut in banks’ reserve requirements.

In Europe, markets started lower for the session amid the growth jitters, but added to the losses after a weak Spanish bond auction, which showed lower demand for the demand resulting in higher yields. According to reports the ECB and the Bundesbank were searching for lawyers to check the legality of the ECB bond-buying program, as investors were trading cautiously ahead of a meeting between German Chancellor Angela Merkel and ECB President Mario Draghi scheduled for some time on Tuesday in Berlin.

The euro was dropping against the Dollar, trading just below the $1.29 level. Crude oil was climbing 0.49% to $92.38 per barrel. Also in the energy complex, natural gas was gaining 0.32% to $2.846 per MMBtu. Gold was adding 0.10% to $1764.00 an ounce, and silver was climbing 0.34% to $34.10 an ounce; meanwhile copper was advancing 0.52%.

On economic news, at 9 am the July Case Shiller 20-city House Price Index will be available. At 10 am a reading on September Consumer Confidence will be released and the July FHFA Housing Price Index will be available.

Today’s Stocks to watch: Apple (NASDAQ: AAPL), Carnival Corp. (NYSE: CCL), Caterpillar (NYSE: CAT), Facebook (NASDAQ: FB), Google (NASDAQ: GOOG), Paychex (NASDAQ: PAYX), Oneok (NYSE: OKE), Oneok Partners L.P. (NYSE: OKS), and Red Hat (NYSE: RHT).

Apple (NASDAQ: AAPL), the maker of iPads and iPhones, was losing 0.40% to $688 in pre-market, extending its prior session correction of more than 1%. Participants reacted to news that the company sold a record 5 million iPhone 5s and worker riots at one of its manufacturing supplier Foxconn’s factory by selling the stock that had hit an all-time high of $705.07 last week. Rival Google announced that it would start selling its Nexus 7 tablet in Japan, hoping to grab share from Apple’s iPad in that country and according to reports Google has not provided Apple with the Google Maps App, after Apple scratched the Google Maps feature from its new iOS 6, replacing it with its own maps service, which is based on Dutch navigation equipment maker TomTom. Apple’s map service has been highly criticized, as it contains geographical errors and lacks features that made Google Maps so popular.

Carnival Corp. (NYSE: CCL), the cruise ship operator, will be in focus as the company reports its quarterly results later this morning. On average analyst expect a profit of $1.44 per share on revenue of $4.68 billion. The highest earnings estimate is $1.46 per share, while the lowest is $1.41. Last quarter, the company earned $0.20 per share, a 150% upside surprise.

Caterpillar (NYSE: CAT), the world’s largest earthmoving equipment maker, was slumping 2.2% to $88.87 in pre-market after the company cut its earnings forecast due to weak global economic conditions. The company said that it now expects to earn $12 per share in fiscal 2015, lowering its prior forecast of a $15 to $20 per share. Caterpillar said that prices for coal and iron ore have dropped sharply, forcing its customers in the mining sector to rethink expenditures and possibly delay equipment purchases. Additionally, the company cited China’s drive toward a more consumption-based economy, which will limit spending on infrastructure projects, dampening future demand for Caterpillar’s products in the world’s second largest economy.

Facebook (NASDAQ: FB), the social media giant, was gaining 0.96% to $20.99 in pre-market, staging a small rebound from yesterday’s 9% plunge. Gener Munster from Piper Jaffray defended the stock late yesterday, following a bearish article in Barron’s over the weekend that said the stock could likely be worth $15 per share, as the business model is in need of a radical change amid the rapid shift in its user base from computers to mobile platforms. The analyst from Piper Jaffray said the social media giant could still deliver 35% year over year growth, as the company still has three different levers it can pull in terms of monetization. Its firm has an Overweight rating on the stock with a target price of $42 per share.

Google (NASDAQ: GOOG), the owner of the largest Internet search engine in the world, was climbing 0.26% to $751.34 in pre-market, trading above its 52-week high just posted yesterday at $750.04, on news that it has started selling its Nexus 7 tablet in Japan. The stock has outperformed in this quarter, jumping more than 30% and making it the best quarterly performer so far in the NASDAQ 100.

Paychex (NASDAQ: PAYX), the payroll and integrated human resource and employee benefits outsourcing solutions provider, will be in focus after reporting quarterly results that topped earnings expectations on revenues that were inline with consensus. The company reaffirmed its fiscal 2013 net income growth guidance of 5 to 7%, as HRS revenue growth is expected to remain in line with its historical organic experience. In fiscal first quarter, Paychex said it earned $0.42 per share, $0.01 better than consensus, on revenue that climbed 2.7% from a year ago to $578.2 million.

Oneok (NYSE: OKE), the natural gas distributor, will be in focus after it provided a strong outlook. The company said it expects net income to grow 19% in fiscal 2013. Oneok said that it sees net income in the range of $345 to $375 million in 2012 and $405 to $455 million in 2013, as additional projects will be placed into service later this year and it will benefit from greater volumes at Oneok Partners L.P. (NYSE: OKS). The master limited partnership involved in the gathering, storing, and transportation of natural gas also provided a strong earnings growth outlook, saying that it expects to earn $860 million to $910 million in 2012 and $935 million to $1.02 billion in 2013.

Red Hat (NYSE: RHT), the world's leading open source technology solutions provider, will be in focus after slumping 2.7% in after hours following an earnings report that missed earnings expectations on revenue that was inline with consensus. Additionally, the company issued weak guidance, below consensus, for the current quarter. Red Hat said it earned $0.28 per share, excluding non-recurring items, $0.01 worse than consensus, on revenue that climbed 14.7% from a year ago to $322.6 million. Mizuho Securities actually raised its target price on the stock to $65 from $60 following the earnings report.