Futures Higher after 2-Day Sharp Selloff. Stocks to Watch: AAPL, FWLT, GRPN, JCP, KYAK, MCP, NVDA, PCLN, DIS
Published on Friday, 09 November 2012 07:23 Written by Christopher Lynn
New York, November 9th (TradersHuddle.com) – Stock futures were pointing to a higher open, despite weakness in overseas markets, after a sharp two-day post election selloff. Worries over the looming fiscal cliff have weighed on sentiment; many predict that the impacts from the potential tax increases and cuts in government spending could push the economy back into a recession.
In Asia, stocks fell amid worries over the risk of a new recession in the U.S. as the so-called fiscal cliff looms. Greece also weighed on sentiment once again, as doubts increased over the ability of providing a workable bailout for the country. The losses came despite positive Chinese data. Annual consumer inflation in the world’s second largest economy eased to 1.7% in October, opening an opportunity for policymakers to tweak monetary policy to shore up growth. The Shanghai Composite slid 0.12%, while the Nikkei lost 0.9%, closing at a four-week low.
In Europe, markets were trading to the downside as uncertainty over a new bailout deal for Greece and some disappointing earnings reports weighed on sentiment. Ongoing concerns that the fiscal cliff in the U.S. could trigger a recession and depress even more global growth were adding pressure to any attempt to move to the upside.
The euro was falling against the Dollar, trading just above the $1.27 level. Crude oil was losing 0.41% to $84.74 per barrel. Also in the energy complex, natural gas was tumbling 1.44% to $3.556 per MMBtu. Gold was adding 0.25% $1730.40 an ounce, and silver was sliding 0.28% to $32.15 an ounce; meanwhile copper was retreating 1.17%.
On economic data, at 8:30 October Export and Import Prices data will be available and at 9:55 am the preliminary ready of November’s University of Michigan Consumer Sentiment will be released. At 10 am, September Wholesale Inventories figures will be available.
Today’s Stocks to watch: Apple (NASDAQ: AAPL), Foster Wheeler (NASDAQ: FWLT), Groupon (NASDAQ: GRPN), JC Penny (NYSE: JCP), Kayak (NASDAQ: KYAK), Molycorp (NYSE: MCP), NVIDIA (NASDAQ: NVDA), Priceline.com (NASDAQ: PCLN), and Walt Disney (NYSE: DIS).
Apple (NASDAQ: AAPL), the maker of iPads and iPhones, was sliding 0.14% to $537.00 in pre-market, as the stock continues to be under heavy selling pressure momentum, amid the lack of news. Buyers seemed to have disappeared after the stock broke below its 200day moving average. Many investors will likely begin to go back into the Apple bandwagon as the stock stabilizes and starts making an attempt to move back to the upside. There is some speculation that the stock was seeing particularly strong selling from investors that hold considerable gains in the stock amid the looming fiscal cliff, which could jack up capital gains taxes. Fundamentally, nothing has really changed for the company in the past week despite the more than 20% drop since its all-time high of $705.07.
Foster Wheeler (NASDAQ: FWLT), the global construction and engineering services provider, will be in focus after reporting mixed quarterly results. The company said it earned $0.56 per share, excluding non-recurring items, $0.12 better than consensus, on revenue that fell 29.1% from a year ago to $803 million versus consensus of $1.07 billion.
Groupon (NASDAQ: GRPN), the daily deals site, was plunging 14.8% to $3.34 in pre-market, trading below its all-time low of $3.68, on negative reaction to its quarterly results and inline revenue guidance for the current quarter. Groupon said that on a GAAP basis it was net of breakeven, $0.01 better than consensus, on revenue that jumped 32.2% from a year ago to $568.6 million versus consensus of $592.06 million. The company said that North American revenues surged 81% on a year over year basis, driven by growth in sale of products for which Groupon is the merchant of record.
JC Penny (NYSE: JCP), the department store operator, was plunging 11.7% to $19.15 in pre-market on initial reaction to its quarterly results. The retailer reported a huge loss of $0.93 per share, excluding items and restructuring charges, $0.93 worse than expected. Revenue fell 26.6% from a year ago to $2.93 billion versus consensus of $3.29 billion.
Kayak (NASDAQ: KYAK), the owner of the online travel comparison and management site, was surging 22.71% to $38.09 in pre-market on news that Priceline.com (NASDAQ: PCLN) had agreed to acquire the company for $40 per share. The company reported earnings yesterday, in which it beat on both the bottom line and top line. Priceline will pay $1.8 billion in cash and stock, a 29% premium over Thursday’s closing price.
Molycorp (NYSE: MCP), the owner of the biggest rare earth reserves in North America, was jumping 7% to $9.30 in pre-market after the company reported a smaller loss than expected on revenue that was short of consensus. Molycorp said it lost $0.05 per share, excluding non-recurring items, $0.08 better than consensus, on revenue that surged 48.9% from a year ago to $205.6 million versus consensus of $247.6 million. The company said that several of its customers continue to deplete large volumes of inventories and its now seeing signs they are coming back into the market. Molycorp added that Chinese output continues to be significantly reduced, as the government enforces tougher environmental regulations and curbs illegal mining.
NVIDIA (NASDAQ: NVDA), the world leader in visual computing technologies, will be in focus after climbing more than 1% in after hours following early reaction to its quarterly results and weak revenue guidance for the current quarter. The company said it earned $0.39 per share, $0.03 better than consensus, on revenue that jumped 12.9% from a year ago to $1.2 billion versus consensus of $1.19 billion. Third quarter gross margin climbed to a record 53.1%, above prior guidance.
Walt Disney (NYSE: DIS), the world’s largest media company, will be in focus after losing more than 2% in afterhours following initial reaction to mixed quarterly results. The media company reported a profit of $0.68 per share, inline with consensus, on revenue that climbed 3.4% from a year ago to $10.78 billion, shy of consensus of $10.91 billion. Disney reported that media networks revenue climbed 4%, while parks and resorts increased 10%, but revenue at its studio fell 8%.