Futures Higher as Growth Worries Eased. Stocks to Watch: AAPL, DRWI, FAST, FSLR, HPQ, IRM, RT, SWY, TSL
Published on Thursday, 11 October 2012 07:20 Written by Christopher Lynn
New York, October 11th (TradersHuddle.com) – Stock futures were pointing to a higher open as participants were shrugging off Spain’s credit rating downgrade and as global growth worries were easing following interest rate cuts by central banks in Brazil and South Korea.
In Asia, most stocks closed mixed as ongoing concerns over global growth and a downgrade to Spain’s credit rating weighed on sentiment. Weak Forecasts from U.S. companies highlighted the slowdown in Asia and the difficult economic challenges in Europe. The Nikkei fell 0.58% to its lowest level in two months with machine orders falling more than expected, while the Shanghai Composite lost 0.8% after data showing the first monthly decline in eight months for vehicle sales in China pressuring the index as well.
In Europe, markets were trading to the upside, as participants seemed to have shaken off Spain’s downgrade from Standard & Poor’s, as it actually could push a reluctant Spanish government to seek a bailout. The credit rating agency downgraded the country’s credit rating to a notch above junk status, as it also gave the country a negative outlook. German CPI came inline with expectations, while France’s came slightly under. In Greece, officials hope they can settle a deal with the Troika in the next couple of days.
The euro was adding against the Dollar, trading below the $1.29 level. Crude oil was gaining 0.71% to $91.90 per barrel. Also in the energy complex, natural gas was losing 0.26% to $3.484 per MMBtu. Gold was climbing 0.30% $1768.50 an ounce, and silver was gaining 0.34% to $34.23 an ounce; meanwhile copper was advancing 0.65%.
On economic news, at 8:30 am the Labor Department will release its Weekly Jobless Claims Report and the Commerce Department will release Trade Balance data, with September Import and Export prices. At 10:30 am, the Natural Gas Inventory Report will be available and at 11 am the Crude Oil and Distillates Inventory report will be released.
Today’s Stocks to watch: Apple (NASDAQ: AAPL), DragonWave (NASDAQ: DRWI), Fastenal (NASDAQ: FAST), First Solar (NASDAQ: FSLR), Hewlett Packard (NYSE: HPQ), Iron Mountain (NYSE: IRM), Ruby Tuesday (NYSE: RT), Safeway (NYSE: SWY), and Trina Solar (NYSE: TSL).
Apple (NASDAQ: AAPL), the maker of iPads and iPhones, was climbing 0.62% to $644.96 in pre-market, as the stock looks to extend its rebound from the prior session. Apple entered correction territory after breaking below its 50day moving average amid concern that iPhone 5 sales would be impacted by supply disruptions from factory unrest and quality issues at its manufacturing partner Foxconn. Its 50day is currently trading at the $659 area. Research Firm Gartner said that PC shipments continued to slump as consumers continued to flock into tablet computers like Apple’s iPad. The tech giant is scheduled to report its quarterly results on October 25th after the closing bell. On average analysts expect a profit of $8.88 per share on revenue of 36.28 billion.
DragonWave (NASDAQ: DRWI) will be in focus after the stock surged more than 20% in after hours trading after the company reported quarterly results. DragonWave posted a loss of $0.03 per share on revenue that surged 225% from a year ago to $44.9 million versus consensus of $41.9 million. Meanwhile, the company issued inline guidance for the current quarter, saying it sees revenue in the range of $43 to $50 million.
Fastenal (NASDAQ: FAST), the wholesaler and retailer of industrial and construction supplies, will be in focus after the company reported quarterly results and announced that its board of directors boosted its quarterly dividend by 10.5% to $0.21 per share. The company reported earnings of $0.37 per share, inline with consensus, on revenue that climbed 10.4% from a year ago to $802 .6 million.
First Solar (NASDAQ: FSLR), the largest maker of thin film solar modules in the world, will be in focus as well over a hundred Chinese solar companies were hit with steep antidumping duties to enter the U.S. market after the Commerce Department found that they were dumping product in the country at prices 18.3% to 249.99% below fair value.
Hewlett Packard (NYSE: HPQ), the world’s largest PC maker, will be in focus after research firm Gartner said worldwide PC shipments fell sharply in the third quarter, as consumers shifted their available funds to buy more tablets and smartphones. Gartner also estimated that Chinese firm Lenovo outsold HP for the first time in a quarter, making it the world’s largest PC maker. According to the report, PC shipments dropped 8.3% to 87.5 million units with Lenovo shipments growing 9.8% to 13.8 million in the quarter, giving it a market share of 15.7%. Meanwhile, HP's shipments tumbled 16% from last year to 13.6 million, for a share of 15.5%.
Iron Mountain (NYSE: IRM), the records management services provider, will be in focus as the company announced that its Board of Directors declared a special dividend to shareholders in connection to the previously announced plan to convert to a REIT. Iron Mountain will pay the special dividend of $700 million, or about $4.07 per share, on November 21st.
Ruby Tuesday (NYSE: RT), the owner and operator of a specialty casual restaurant chain, will be in focus after shares tumbled 4.7% in after hours trading following an earnings miss on revenue that was inline with consensus. The company said that on its fiscal first quarter it earned $0.05 per share, $0.01 worse than consensus, on revenue that climbed 0.8% from a year ago to $332.9 million. Additionally, Ruby Tuesday estimates that same-restaurant sales for Company-owned restaurants will be in the range of flat to 2.0% for the year, as it issued inline earnings guidance for fiscal 2013.
Safeway (NYSE: SWY), the owner and operator of a grocery store chain, will be in focus as it report quarterly results later this morning. On average analysts expect a profit of $0.42 per share on revenue of $10.24 billion. The lowest earnings estimate is $0.38, while the highest is $0.47 per share.
Trina Solar (NYSE: TSL), the maker of mono and multi-crystalline photovoltaic modules, was actually trading to the upside in pre-market despite the U.S. Commerce Department setting up steep duties on Chinese solar panels. The U.S. government said that Chinese companies were dumping solar cells and panels in the country at prices 18.3% to 249.99% below fair value. In the case of Trina, it received a final 18.32% antidumping duty and a 15.9% countervailing duty. The company in a statement said that it was waiting for the U.S. International Trade Commission approval of the new duties before deciding it would appeal.
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