Futures Higher amid Fiscal Cliff Deal Hopes. Stocks to Watch: ARO, AAPL, GES, HD, KR, PIR, TIF, DIS
Published on Thursday, 29 November 2012 07:18 Written by Christopher Lynn
New York, November 29th (TradersHuddle.com) – Stock futures were pointing to a higher open, joining mostly positive sentiment from overseas markets. Hopes that a deal on the Fiscal Cliff could be reached before Christmas helped buoyed demand for risk assets. Speaker Boehner expressed optimism that a deal could be reached that could avoid the estimated $600 billion impact of spending cuts and tax hikes in the U.S. economy.
to a lower opening amid global weakness, as jitters increased over the possibility that the Fiscal Cliff could hit the U.S. economy. In Washington, the debate continues over the best way to cut the deficit and to increase revenue, with little progress being made.
In Asia, most stocks closed higher, as participants turned optimistic over the prospects that U.S. lawmakers will reach a deal to avoid the Fiscal Cliff. The Nikkei rebounded from the prior session slump, climbing nearly 1%, despite data that showed that Japanese retail sales fell 1.2% in October. In China, the Shanghai Composite underperformed, losing 0.51% and posting its fourth straight loss.
In Europe, markets were trading to the upside amid optimism that a deal to avoid the U.S. fiscal Cliff would be reached before Christmas. Miners were among the top performers despite BHP Billiton (NYSE: BHP), the world’s largest natural resources Company, issuing cautious comments over demand amid the global economic crisis.
The euro was climbing against the Dollar, trading above the $1.29 level. Crude oil was jumping 1.27% to $87.59 per barrel. Also in the energy complex, natural gas was slumping 0.71% to $3.774 per MMBtu. Gold was gaining 0.43% $1723.80 an ounce, and silver was adding 0.27% to $33.775 an ounce; meanwhile copper was advancing 0.75%.
On economic news, at 8:30 am the Labor Department will release its Weekly Jobless Claims report, while the Commerce Department will release its second reading on third quarter GDP. At 10 am, October Pending Home Sales figures will be available.
Today’s Stocks to watch: Aeropostale (NYSE: ARO), Apple (NASDAQ: AAPL), Guess (NYSE: GES), Home Depot (NYSE: HD), Kroger (NYSE: KR), Pier 1 Imports (NYSE: PIR), Tiffany & Co. (NYSE: TIF), and Walt Disney (NYSE: DIS).
Abbott Laboratories (NYSE: ABT), the maker of diversified health care products, announced that its board approved the separation of its research based pharmaceutical business, which will be known as AbbVie. The company will distribute all of AbbVie common shares on a special dividend distribution to Abott shareholders at a ratio of 1 share of AbbVie per one share of Abbott.
Aeropostale (NYSE: ARO), the casual apparel retailer, tumbled more than 7% to $13.05 in after hours following the release of its quarterly results and downside earnings guidance for the current quarter. The retailer earned $0.31 per share, excluding non-recurring items, $0.02 better than consensus, on revenues that climbed 1.6% from a year ago to $605.9 million versus consensus of $601.5 million. Comparable sales, including the e-commerce channel, for fiscal third quarter decreased 1% compared to a 7% decrease last year.
Apple (NASDAQ: AAPL), the maker of iPads and iPhones, was climbing 0.54% to $586.08 in pre-market amid some optimism over a possible deal on the Fiscal Cliff. Some believe that if the deal seems less possible at one point, stocks with big year to date gains could be hit. Apple, despite the selloff from its all-time high of $705.07, has still a very respectable gain year to date of nearly 44%. The stock broke above both its 20day and 200day exponential moving average in the prior sessions and it now faces calculated resistance at $590.42 and further resistance at its 50day moving average, currently trading around the $622 area. Last Monday, Citigroup made a trading call and initiated the stock with a Buy rating and a target price of $675.
Guess? (NYSE: GES), the denim and cotton casual clothing maker and retailer, jumped 4.5% in after hours after the company missed earnings expectations but beat consensus on the top line, while issuing inline guidance for the current quarter and declaring a special dividend of $1.20 per share. Guess earned $0.43 per share, $0.01 worse than consensus, on revenue that fell 2.2% from a year ago to $628.8 million versus consensus of $621.7 million. The special dividend will be paid on December 28th to shareholders of record on December 21st.
Home Depot (NYSE: HD), the biggest home improvement retailer, will be in the session after Jim Cramer identified the stock, since its up 50% year to date, as one that might be hit the hardest if it becomes clear that politicians in Washington failed to get a deal done to avert the dreaded fiscal Cliff. The Mad Money host grew pessimistic over the prospects for a deal as both sides increased partisanship bickering.
Kroger (NYSE: KR), the owner and operator of a supermarket and convenience stores chains, as the company report will report its quarterly results later this morning. On average analysts expect a profit of $0.43 per share on revenue of $21.65 billion. The highest earnings estimate is $0.48 per share, while the lowest is $0.41. Last quarter, Kroger earned $0.51 per share, beating earnings expectations by 4.1%.
Pier 1 Imports (NYSE: PIR), the decorative home furnishings and gifts retailer, said that it sees third quarter EPS inline with estimates and revenue above consensus, while reporting that third quarter comparable store sales jumped 7.9% compared with a gain of 7% in the same period last year. Pier 1 said that excluding impacts from Hurricane Sandy, sales would have increased 9% for the quarter.
Tiffany & Co. (NYSE: TIF), the fine jewelry maker and luxury retailer, was tumbling 12% in pre-market on early reaction to quarterly results that missed consensus and after the retailer cut fiscal 2013 earnings guidance below consensus. Tiffany earned $0.49 per share, $0.14 below consensus, on revenue of $853 million versus consensus of $858 million. The company expects EPS on fiscal 2013 in a range of $3.20 to $3.40 versus consensus of $3.59.
Walt Disney (NYSE: DIS), the world’s largest media company, will be in focus after announcing that its Board of Directors approved an increase to its annual cash dividend by 25% to $0.75 per share, payable on December 28th to shareholders of record on December 10th.
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