Morning Market Update
- US: Dow Futures: 12857.00 (-1.01%), S&P 500 Futures: 1361.90 (-0.97%), NASDAQ Futures: 2651.50 (-0.85%)
- Europe: CAC: 3118.04 (-2.21%), DAX: 6557.90 (-2.85%), FTSE: 5672.93 (-1.72%).
- Asia-Pacific: Australia: 4352.40 (-0.32%), China: 2388.59 (-0.76%), Hong Kong: 20624.39 (-1.87%), India: 5200.60 (-1.71%), Japan: 9542.17 (-0.20%).
- Metals: Gold: 1625.70 (-1.04%), Silver: 30.84 (-2.56%), Copper: 3.61 (-2.33%)
- Energy: Crude Oil: 102.77 (-1.07%), Natural Gas: 1.93 (0.16%)
- Commodities: Corn: 6.04 (-1.72%), Soya Bean: 13.52 (1.64%), Wheat: 6.24 (-0.71%)
- Currency: Euro (€) / US Dollar ($) (EURUSD): 1.3126 (-0.70%), British Pound Sterling (UK£) / US Dollar ($) (GBPUSD): 1.6099 (-0.15%), US Dollar ($) / Japanese Yen (¥) (USDJPY): 81.0900 (-0.54%)
- 10 year US Treasury: 1.928% (-0.035)
Financial and Economic News Update
U.S. stock-index futures tumble: U.S. stock index futures are pointing to a sharply lower open amid growing concerns of political instability in Europe and signs of a slowdown in the Chinese economy. The Dow Jones industrial average, S&P 500 and NASDAQ futures were all trading around a percent lower.
European markets trading lower: European markets fell sharply on Monday, with banks and basic resource stocks declining the most, as negative global economic data prompted investors to secure recent gains. The German DAX (INDEXDB:DAX) lost 2.85 percent to 6557.90, the FTSE 100 (INDEXFTSE:UKX) was 1.72 percent lower at 5672.93, and the CAC 40 (INDEXEURO:PX1) was down 2.21 percent at 3118.04. The euro zone blue-chip ESTX 50 PR.EUR (INDEXSTOXX:SX5E) (Euro Stoxx 50) slumped 2.32 percent.
German manufacturing shrinks: Germany’s manufacturing sector contracted in April at the fastest pace in nearly three years, denting hopes it can propel growth in the troubled euro zone. Markit’s manufacturing Purchasing Mangers Index (PMI) declined by 2.1 points to a seasonally adjusted 46.3 in April from a reading of 48.4 in March.
Asian markets end lower: Asian markets ended lower on Monday after data showed that Chinese manufacturing activity continued to shrink in April. The NIKKEI 225 (INDEXNIKKEI:NI225) lost 0.2 percent to 9542.17, while the Shanghai Composite Index (SHA:000001) fell 0.8 percent to 2388.59. The HANG SENG INDEX (INDEXHANGSENG:HSI) was the worst performer in the region, ending down 1.8 percent at 20,624.4. The S&P/ASX 200 (INDEXASX:XJO) index finished down 14.1 points at 4,352.4.
China PMI improves to 49.1: An initial measure of China’s manufacturing activity showed China’s factories stabilized in April, but the data indicate the government may adopt more policies to stimulate economic growth. The HSBC Flash Purchasing Managers Index stood at 49.1 in April from a final reading of 48.3 in March.
Company News Update
- Xerox Corporation (NYSE:XRX) said first-quarter net income attributable to the company fell 4.3 percent to $269 million, or 19 cents per share, from $281 million last year, with total revenue at $5.5 billion, up 1 percent from a year earlier.
- Kellogg Company (NYSE:K) reduced its full-year earnings forecast, after first quarter sales fell 1.3 percent. The world’s largest cereal company expects to have 2012 profit of $3.18 to $3.30 per share.
- Diversified industrial manufacturer Eaton Corporation (NYSE:ETN) reported a better-than-expected first quarter profit and raised its full-year forecast for the second time this year.
- Amazon.com, Inc. (NASDAQ:AMZN) has started shipping its electronic-reader Kindle Touch 3G to customers in 175 countries and territories around the world, seven days earlier than previously announced, the Seattle-based company said in a statement.
- SunTrust Banks, Inc. (NYSE:STI), the eighth- largest U.S. lender by deposits, reported first quarter net profit of $245 million, or 46 cents a share, topping analysts’ estimates.
- Minneapolis-based investment bank and asset manager Piper Jaffray Companies (NYSE:PJC) will cut 2 to 3 percent of its workforce as part of an effort to reduce costs.
- MGIC Investment Corp. (NYSE:MTG), the Milwaukee-based mortgage insurer, posted first-quarter net loss of $19.6 million or $0.10 per share, narrower than the loss per share of $0.46, which analysts were expecting.
- Beam Inc (NYSE:BEAM) agreed to acquire Pinnacle vodka and rum brand Calico Jack from White Rock Distilleries Inc for $605 million in cash.
- According to media reports, Amylin Pharmaceuticals, Inc. (NASDAQ:AMLN) is seeking a potential buyer after rejecting a $3.5 billion takeover offer from Bristol- Myers Squibb Co. (NYSE:BMY).
- Vodafone Group plc (LON:VOD) (NASDAQ:VOD) has agreed to acquire British telecom operator Cable & Wireless Worldwide PLC (LON:CW) for 1.04 billion pounds ($1.7 billion) in cash, adding a U.K. fixed-line network to support its mobile operation.
- SABMiller plc (LON:SAB), the world’s second- largest brewer by volume, said Alan Clark, currently managing director of SABMiller Europe, will succeed long-standing Chief Executive Officer Graham Mackay, next year.
- AstraZeneca plc (LON:AZN) is set to acquire U.S.-based Ardea Biosciences, Inc. (NASDAQ:RDEA) in a $1.26 billion deal, which should help the Anglo-Swedish pharmaceutical group bolster its thin pipeline of new medicines.
- World’s biggest food company, Nestle SA, agreed to buy Pfizer Inc. (NYSE:PFE)’s infant nutrition unit for $11.9 billion, a move that should help the Swiss food group expand its business in emerging markets.
- Dutch electronics maker, Koninklijke Philips Electronics NV (AMS:PHIA), reported a better than expected first quarter earnings due to higher sales and gains on divestment. Net profit stood at 248 million euros ($327 million), up 80 percent from a year earlier.
- Spain’s third-biggest bank, Bankia SA’s, Chief Executive Officer Francisco Verdu, said the banks’ bad loans ratio will continue to increase, but expects it to peak later this year.
· An explosion occurred at an industrial adhesives plant operated by Japanese chemical manufacturer Mitsui Chemicals, Inc. (TYO:4183) in Yamaguchi prefecture, killing an employee and injuring 22 others yesterday· Nippon Yusen Kabushiki Kaisha (TYO:9101), Japan’s largest shipping line by sales, reported a wider-than-expected full-year net loss of 73 billion yen, due to a slowdown in logistics business.
Tokyo Steel Manufacturing Co. Ltd. (TYO:5423) lowered its annual dividend following an operating loss of 11.3 billion yen ($138.47 million) in the year ended March 31, due to higher production costs.
According to news reports, French food giant Groupe Danone SA (EPA:BN), is in talks with Japanese drink maker Yakult Honsha Co., Ltd. (TYO:2267), to increase its equity stake in the company to 28 percent from 20 percent
· Alibaba.com Limited (HKG:1688), China’s largest listed e-commerce company, reported a 25 percent drop in first quarter profit at 339.2 million yuan ($53.8 million), the lowest quarterly profit in two years.
China Mobile Ltd. (HKG:0941), the world’s biggest phone carrier by users, said first-quarter profit rose 3.5 percent to 27.8 billion yuan ($4.4 billion), lower than what analysts were expecting.
Australian drug development company Biota Holdings Ltd. (ASX:BTA) has agreed to merge with US-based Nabi Biopharmaceuticals (NASDAQ:NABI) to create a $250 million group, which will be headquartered in the USA.