Morning Market Update
Every morning we put out a report with the latest news in global stock markets, company news, and global economic news. Topics in focus for Tuesday August 21st, 2012 below:
- US: Dow Futures: 13267.00 (0.29%), S&P 500 Futures: 1419.60 (0.35%), NASDAQ Futures: 2792.00 (0.43%)
- Europe: CAC: 3504.58 (0.68%), DAX: 7069.99 (0.51%), FTSE: 5845.10 (0.35%).
- Asia-Pacific: Australia: 4383.40 (0.44%), China: 2118.27 (0.53%), Hong Kong: 20100.09 (-0.02%), India: 5421.00 (1.02%), Japan: 9156.92 (-0.16%).
- Metals: Gold: 1637.80 (0.90%), Silver: 29.16 (2.00%), Copper: 3.45 (2.22%)
- Energy: Crude Oil: 96.99 (1.06%), Natural Gas: 2.83 (1.87%)
- Commodities: Corn: 8.29 (1.98%), Soya Bean: 17.11 (2.29%), Wheat: 9.08 (0.95%)
- Currency: EUR/USD: 1.2458 (0.91%), GBP/USD: 1.5768 (0.36%), USD/JPY: 79.4400 (0.01%)
- 10 year US Treasury: 1.842% (0.037)
Financial and Economic News Update
U.S. stock-index futures rise: U.S. stock-index futures are pointing to a higher open on Tuesday, amid investor optimism that the European Central Bank will act to reduce borrowing costs for debt-ridden euro zone countries. The Dow Jones industrial average, the S&P 500 and the NASDAQ were all trading close to half a percent higher. The Dow and the S&P 500 are on track to hit four-year highs.
European markets trading in the green: European markets are higher in trade today, as investors continued to speculate on an ECB plan to resume bond purchases. The German DAX (INDEXDB:DAX) rose 0.5 percent to 7069.99, the FTSE 100 (INDEXFTSE:UKX) was up 0.4 percent at 5845.10, and the CAC 40 (INDEXEURO:PX1) gained 0.7 percent to 3504.58. The euro zone blue-chip ESTX 50 PR.EUR (INDEXSTOXX:SX5E) (Euro Stoxx 50) was trading 0.6 percent higher.
Asian markets end mostly higher: Asian markets closed mostly higher on Tuesday amid talk of further monetary stimulus in China. Japan’s NIKKEI 225 (INDEXNIKKEI:NI225) closed 0.2 percent lower at 9,156.92 points, falling from a three-month high. The HANG SENG INDEX (INDEXHANGSENG:HSI) closed down 0.02 percent at 20,100.1, while the SSE Composite Index (SHA:000001) (Shanghai Composite Index) closed up 0.5 percent at 2,118.3, its biggest gain since August 9. The S&P/ASX 200 (INDEXASX:XJO) index rose 19.1 points to 4,383.4. The benchmark Indian 30-share BSE SENSITIVE (INDEXBOM:SENSEX) index gained more than 1 percent.
Company News Update
- Best Buy Co., Inc. (NYSE:BBY) reported second quarter adjusted earnings of 20 cents a share, on revenue of $10.55 billion, missing the average analysts’ estimate of earnings of 31 cents per share on revenue of $10.65 billion. Same store sales fell 3.2 percent during the quarter, and the electronics retailer also withdrew its earnings guidance for the year.
- Medical products maker Medtronic, Inc. (NYSE:MDT) posted first quarter earnings excluding certain items of 85 cents per share, on revenue of $4 billion. Analysts were expecting earnings of 85 cents on revenue of $4 billion. The company reiterated its full year profit forecast.
- Shoe retailer DSW Inc. (NYSE:DSW) reported second quarter profit excluding certain items of 66 cents per share, four cents above estimates. Sales for the quarter came in at $512.2 million, also above analysts’ forecasts of $510.9 million.
- · Electronic scoreboard and billboard maker Daktronics, Inc. (NASDAQ:DAKT) said first quarter net income rose to $6.7 million, or 16 cents per share, from $3.4 million, or 8 cents per share, in the year-ago quarter. Revenue increased to $132.9 million from $118.7 million a year earlier.
- Wholesale distributor of technology products Tech Data Corp (NASDAQ:TECD) reported a 31 percent drop in second quarter earnings to $34.46 million or 88 cents per share, from $50.11 million or $1.10 per share last year. Sales declined 8 percent to $5.96 billion from $6.45 billion last year. Analysts were looking for a profit of $1.17 per share on revenue of $5.83 billion.
- Private-equity firm KKR & Co. L.P. (NYSE:KKR) has acquired about 40 percent of privately held Chinese fashion retailer Novo Holdco for $30 million, Reuters reported.
- Citigroup Inc. (NYSE:C) became the first U.S. bank to issue credit cards on its own to customers in China, without co-branding from local financial institutions.
- Medical device company St. Jude Medical, Inc. (NYSE:STJ) could be in focus today after a Wall Street Journal report said that a study conducted by a cardiologist found serious safety issues with its Durata heart device.
- Nordson Corporation (NASDAQ:NDSN), which makes adhesives and industrial coatings, reported an 18 percent rise in third quarter profit, and forecast better than expected current quarter earnings.
- The board of integrated equipment services company, H&E Equipment Services, Inc. (NASDAQ:HEES) has approved a one time special cash dividend of $7 a share, payable September 19 to stockholders of record as of September 5.
- Clinical-stage biotechnology company ImmunoCellular Therapeutics Ltd (NYSEAMEX:IMUC) said Manish Singh has resigned as president and chief executive.
- Health products retailer GNC Holdings Inc (NYSE:GNC) was trading 1.5 percent higher in pre-market trading after analysts at Barclays Capital initiated coverage of the stock with an “overweight” rating.
- Engineering conglomerate Siemens AG (ADR) (NYSE:SI) (ETR:SIE) (FRA:SIE) is mulling over plans to cut thousands of jobs amid the economic uncertainty in Europe, German daily Boersen-Zeitung said, without disclosing its sources.
- Miners were among the biggest gainers in London after a report from Chinese state-run Xinhua news agency said Beijing was planning new economic stimulus measures for the second half of the year. Kazakhmys plc (LON:KAZ) jumped 2.7 percent and Vedanta Resources plc (LON:VED) climbed 3 percent. Eurasian Natural Resources Corporation (LON:ENRC) rose 2 percent, while Anglo American plc (LON:AAL) picked up 2.6 percent. Antofagasta plc (LON:ANTO) added 2 percent, as Rio Tinto plc (ADR) (NYSE:RIO) (LON:RIO) (ASX:RIO) edged up 2 percent. BHP Billiton Limited (ADR) (NYSE:BHP) (ASX:BHP) (LON:BLT) was up 1.6 percent.
- Commodities trader Glencore International Plc (LON:GLEN) reported an 8 percent drop in first half net profit to 1.8 billion euros ($2.27 billion), while revenue increased 17 percent to $108 billion, from $92 billion in the first half a year ago.
- British bank Barclays PLC (ADR) (NYSE:BCS) (LON:BARC) is in talks with South Africa’s Absa Group Ltd. to merge majority of their African operations and complete a plan started seven years ago.
- Swedish appliance maker AB Electrolux (STO:ELUX-B) has made a bid to acquire unlisted South Korean home appliance maker Daewoo Electronics, Reuters reported.
- Deutsche Telekom AG (ETR:DTE) (FRA:DTE) and France Telecom SA (ADR) (NYSE:FTE) (EPA:FTE)’s U.K. mobile-phone venture, Everything Everywhere Limited, has received approval from industry regulator to run faster data services on its current airwaves.
- China’s largest offshore oil and gas company, CNOOC Limited (ADR) (NYSE:CEO) (HKG:0883) reported a 19 percent decline in first half net profit to 31.87 billion yuan ($5 billion), or 0.71 yuan a share, from 39.34 billion yuan, or 0.88 yuan, a year earlier. Analysts were expecting a profit of 35.07 billion yuan. The Beijing-based company slashed its dividend by 40 percent to set aside capital for its $15.1 billion acquisition of Canadian energy firm Nexen Inc. (NYSE:NXY) (TSE:NXY).
- Struggling TV maker Sharp Corporation (TYO:6753) ended 2.9 percent higher after Japanese daily Yomiuri Shimbun reported that the company was planning to cut 8,000 jobs or 15 percent of its global workforce, including 3,000 from the sale of its two television assembly plants to Taiwanese partner Hon Hai Precision Industry Co., Ltd. (TPE:2317).
- Bankrupt Japanese chipmaker Elpida Memory Inc (TYO:6665), which has agreed to be acquired by U.S. rival Micron Technology, Inc. (NASDAQ:MU) will get 280 billion yen ($3.5 billion) in support from the U.S. company, according to a document issued by Micron.
- India’s largest carmaker, Maruti Suzuki India Ltd (NSE:MARUTI) (BOM:532500), resumed production of cars at a north-India factory, a month after a lockout was declared following a deadly riot in which one senior company official was killed and 100 others injured.
- Asia Pacific Breweries Ltd. (SGX:A46) soared in Singapore trading after Dutch brewer Heineken N.V. (AMS:HEIA) raised its offer for the maker of Tiger Beer from S$50 a share to S$53 a share.
- Japan Tobacco Inc (TYO:2914), the world’s third largest publicly traded tobacco company, dropped 1.7 percent after the Wall Street Journal said that the European Union’s anti-fraud office is investigating whether a sale of cigarettes by a Swiss-based unit of Japan Tobacco to a firm linked to the Makhlouf family, cousins of Syrian president Bashar al-Assad, violated European sanctions against Syria.
- Australian engineering company Monadelphous Group Limited (ASX:MND) reported a better than expected 45 percent increase in full-year net profit to 137.3 million Australian dollars, from 95.1 million Australian dollars, a year earlier.
Economic Calendar for Tuesday, August 21, 2012:
07:45 A.M. ET: ICSC-Goldman Store Sales (Week ending Saturday, August 18, 2012)
08:45 A.M. ET: Atlanta Federal Reserve Bank President Dennis Lockhart speaks.
08:55 A.M. ET: Redbook (Week ending Saturday, August 18, 2012)
11:30 A.M. ET: 4-Week Bill Auction
11:30 A.M. ET: 52-Week Bill Auction