Futures Higher Despite Fiscal Cliff Stalled Talks. Stocks to Watch: AAPL, FB, STJ, TLAB, ULTA, YUM, ZNGA
Published on Friday, 30 November 2012 07:23 Written by Christopher Lynn
New York, November 30th (TradersHuddle.com) – Stock futures were pointing to a higher open, joining positive sentiment around the world. Participants seem to dismiss that the Fiscal Cliff negotiations in Washington have stalled and that the debt ceiling debate appears to come sooner and will somewhat be part of the Fiscal Cliff deal if any, as money managers dress up the end of the month.
In Asia, most stocks closed higher, despite signs of little progress in the U.S. over the fiscal cliff negotiations. According to latest statements from the Republican side, the President has failed to offer a serious balanced proposal. The Nikkei gained 0.48% to hit a new seven-month closing high, as a weaker yen supported exporters. Meanwhile, the Shanghai Composite jumped 0.85%, snapping a 4-session losing streak.
In Europe, markets were trading to the upside, as participants seemed to have dismissed that the Fiscal Cliff talks in the U.S. appeared to have stalled. According to the latest reports, lawmakers and the Obama administration are far apart in order to reach compromise on a balance approach to a solution to the fiscal cliff, increasing the risk that the U.S. economy enters a recession in 2013. In the euro zone, the German Parliament approved the fresh bailout for Greece, while ECB President Mario Draghi said that budget tightening across the euro zone could come into effect in early 2013 but predicted a recovery in the second half of the year. The employment figures showed that unemployment hit a record high in the euro zone in October, having little effect in the upside move.
The euro was climbing against the Dollar, trading just above the $1.30 level. Crude oil was adding 0.14% to $88.19 per barrel. Also in the energy complex, natural gas was slumping 0.6% to $3.626 per MMBtu. Gold was gaining 0.19% $1732.70 an ounce, and silver was sliding 0.21% to $34.275 an ounce; meanwhile copper was advancing 0.52%.
On economic news, at 8:30 am October Personal income and consumer spending figures will be released. Also at the same time, PCE-Core Prices data will be available. At 9:45 am, the November reading of Chicago PMI will be released.
Today’s Stocks to watch: Apple (NASDAQ: AAPL), Facebook (NASDAQ: FB), St. Jude Medical (NYSE: STJ), Tellabs (NASDAQ: TLAB), Ulta Salon (NASDAQ: ULTA), Yum Brands (NYSE: YUM), and Zynga, Inc. (NASDAQ: ZNGA).
Apple (NASDAQ: AAPL), the maker of iPads and iPhones, was climbing 0.05% to $589.64 in pre-market, after jumping 1% in the prior session. According to reports, Chinese regulators provided clearance for the iPhone 5 to be sold in China. The new iPhone will make its debut in December, in time to have some effect in the current quarter. The stock is battling calculated resistance at the $590 level, but if broken it will pave the way for a test of the 200day moving average, which is around the low $600s. Last Monday, Citigroup made a trading call and initiated the stock with a Buy rating and a target price of $675.
St. Jude Medical (NYSE: STJ), the maker of cardiovascular devices, like heart valves, advanced near 1% in after hours following the announcement that its board of directors approved a $1 billion share repurchase program. The stock was upgraded to a Neutral at Mizuho.
Tellabs (NASDAQ: TLAB), the voice, data, and video transport and network access systems maker, surged more than 11% in after hours following the announcement of the appointment of Mr. Daniel Kelly as its new CEO and President and a special dividend of $1 per share.
Ulta Salon (NASDAQ: ULTA), the beauty and personal care products retailer, reported earnings that beat consensus on revenue that was inline with consensus. The company also issued inline guidance for the current quarter. Ulta earned $0.59 per share, $0.03 better than consensus, on revenue that jumped 22.4% from a year ago to $503.6 million. The stock was upgraded to Outperform at Wells Fargo.
Yum! Brands (NYSE: YUM), the Pizza Hut, KFC, and Taco Bell restaurant chains owner and operator, tumbled 7% to $69.11 in after hours on reaction to the company reaffirming its 2012 EPS growth forecast, while issuing 2013 earnings growth of at least 10%. Yum Brands said that full year 2012 EPS would be at least $3.24 versus consensus of $3.28.
Zynga, Inc. (NASDAQ: ZNGA), the social game developer of popular games like Farmville and Mafia Wars, was tumbling 9.5% after an 8K filling showed amendment to the agreement between Facebook (NASDAQ: FB) and Zynga. Under the new agreements, Facebook will no longer be prohibited from developing its own games, starting March 31 2013, while Zynga might elect not to use Facebook Payments as a means of payment and/or not to display ads served by Facebook. Shares of Facebook were climbing 0.26% in pre-market. Needham defended Zynga, saying that the changes in the agreement will allow the company to pursue multi-platform goals, while the firm doubts Facebook will develop their own games.
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