Morning Market Update

update

Every morning we put out a report with the latest news in global stock markets, company news, and global economic news. Monday the 20th of August 2012 highlights below:

Market Levels

 

?      US: Dow Futures: 13229.00 (-0.14%), S&P 500 Futures: 1413.80 (-0.10%), NASDAQ Futures: 2779.00 (0.11%)

?      Europe: CAC: 3478.68 (-0.28%), DAX: 7040.72 (-0.00%), FTSE: 5829.46 (-0.39%).

?      Asia-Pacific: Australia: 4364.30 (-0.13%), China: 2106.96 (-0.38%), Hong Kong: 20104.27 (-0.06%), India: 5366.30 (0.00%), Japan: 9171.16 (0.09%).

?       Metals: Gold: 1613.30 (-0.38%), Silver: 27.90 (-0.36%), Copper: 3.36 (-1.81%)

?       Energy: Crude Oil: 95.98 (-0.03%), Natural Gas: 2.76 (1.32%)

?       Commodities: Corn: 8.11 (0.03%), Soya Bean: 16.56 (1.34%), Wheat: 8.92 (1.42%)

?       Currency: EUR/USD: 1.2304 (-0.25%), GBP/USD: 1.5695 (-0.01%), USD/JPY: 79.4600 (-0.13%)

?       10 year US Treasury: 1.816% (0.009)

 

Financial and Economic News Update

 

U.S. stock-index futures mixed: U.S. stock-index futures are pointing to a mixed open on Monday, following six weeks of gains, amid investor concerns that European leaders will fail to get a grip on the region’s debt crisis. On the economic front, the Federal Reserve Bank of Chicago said its National Activity Index rose to -0.13 in July, from -0.34 in June. The Dow Jones industrial average, the S&P 500 and the NASDAQ were alltrading close to the flat-line.

 

European markets trading in the red: European markets are lower in trade today, after the German central bank, the Bundesbank, criticized an ECB plan to resume bond purchases. The German DAX (INDEXDB:DAX) trading largely unchanged at 7040.72, the FTSE 100 (INDEXFTSE:UKX) was down 0.4 percent at 5829.46, and the CAC 40 (INDEXEURO:PX1) declined 0.3 percent to 3478.68. The euro zone blue-chip ESTX 50 PR.EUR (INDEXSTOXX:SX5E) (Euro Stoxx 50) was trading 0.1 percent higher.

Asian markets end mostly lower: Asian markets closed mostly lower on Monday amid concern that China won’t ease monetary policy despite the slowdown in economic growth. Japan’s NIKKEI 225 (INDEXNIKKEI:NI225) closed 0.1 percent higher at 9,171.16 points, helped by a weaker yen. The HANG SENG INDEX (INDEXHANGSENG:HSI) closed down 0.1 percent at 20,104.3, ahead of a week full of earnings, while the SSE Composite Index (SHA:000001) (Shanghai Composite Index) ended down 0.4 percent at 2,106.95. The S&P/ASX 200 (INDEXASX:XJO) index fell 0.1 percent to 4,364.3. The benchmark Indian 30-share BSE SENSITIVE (INDEXBOM:SENSEX) index was closed for Eid celebrations.

Company News Update

 

U.S.

 

?      Lowe’s Companies, Inc. (NYSE:LOW), the second-largest U.S. home-improvement chain, reported a 10 percent drop in second-quarter earnings to $747 million, or 64 cents per share, from $830 million, or 64 cents per share, a year earlier. Analysts were expecting a profit of 70 cents a share. Revenue declined 2 percent to $14.25 billion, also trailing estimates of $14.44 billion. Revenue at stores open at least a year fell 0.4 percent in the quarter. Lowe’s Companies, Inc. (NYSE:LOW) also lowered its full-year earnings and revenue outlook.

?      Health insurer Aetna Inc. (NYSE:AET) has agreed to buy rival Coventry Health Care, Inc. (NYSE:CVH) for $5.6 billion in cash and stock. Aetna Inc. (NYSE:AET) will pay $42.08 for each share of Coventry stock, including $27.30 in cash and 0.3885 Aetna share for each Coventry share held.

?      Corinthian Colleges Inc (NASDAQ:COCO) reported fourth quarter earnings per share of 10 cents that fell short of analysts’ estimate of 11 cents per share. Revenue declined 6.4 percent to $394.8 million from the year-ago quarter, also missing estimates of $433.3 million.

?      Camelot Information Systems Inc (ADR) (NYSE:CIS) soared more than 8 percent in pre-market trading after reporting second quarter financial results and reiterating its full-year revenue projections.

?      Google Inc (NASDAQ:GOOG)’s Motorola Mobility unit has filed a new lawsuit against Apple Inc. (NASDAQ:AAPL), accusing that the iPhone, iPad, and iPod Touch infringed seven of its patents.

?      Buyout talks between struggling electronics retailer Best Buy Co., Inc. (NYSE:BBY) and founder Richard Schulze have broken down after the company said Schulze had rejected its due diligence offer. Separately, Best Buy Co., Inc. (NYSE:BBY) has named Hubert Joly as its new chief executive and president. Joly is the former head of privately held hospitality company Carlson.

?      Mobile accessories maker Zagg Inc (NASDAQ:ZAGG) said Robert Pedersen has stepped down as chief executive and chairman. Chief Operating Officer Randall Hales has been named as an interim replacement.

?      Groupon Inc (NASDAQ:GRPN) fell 1 percent in pre-market trading after The Wall Street Journal reported that some early backers of the daily deals company, including Silicon Valley veteran Marc Andreessen, have sold large portions of their stock.

?      Phoenix-based Western Alliance Bancorporation (NYSE:WAL), the parent company of Bank of Nevada, has agreed to acquire Western Liberty Bancorp (NASDAQ:WLBC) for $55 million.

?      Consulting firm Towers Watson & Co (NYSE:TW) has raised its quarterly dividend by 15 percent to 11.5 cents a share.

?      The board of skin health solutions provider, PhotoMedex, Inc. (NASDAQ:PHMD) has approved a new $25 million share repurchase program.

?      Analysts at Robert W. Baird have began coverage on Mexican restaurant operator, Chuy’s Holdings Inc (NASDAQ:CHUY) with an “outperform” rating and a price target of $24.

?      Bank of America has reiterated its “buy” rating on shares of data center services provider, Equinix Inc (NASDAQ:EQIX).

 

Europe

 

?       U.S. federal and state prosecutors are investigating German lender Deutsche Bank AG (USA) (NYSE:DB) (ETR:DBK) (FRA:DBK) and several other global banks over accusations of funneling billions of dollars through their branches in New York to Iran, Sudan and other sanctioned nations, the New York Times reported on Saturday.

?       CME Group Inc (NASDAQ:CME), the world’s largest futures exchange operator, has applied to the UK’s Financial Services Authority to create a London-based derivatives exchange.

?       London-listed platinum miner Lonmin Plc (LON:LMI) slid for a sixth day on Monday, as the company told workers to return to work or face dismissal, after rivalry between unions led to violence that left 44 people dead in a week.

?       British alcoholic beverages company Diageo plc (ADR) (NYSE:DEO) (LON:DGE) is close to a deal to buy the Jose Cuervo tequila brand from Mexico’s Beckmann family for about $3 billion, the Sunday Times reported.

?       G4S plc (LON:GFS) rose 0.5 percent in London following a report by the Financial Times that the British security firm would pull out of Pakistan amid a government crackdown on foreign security companies.

?       Four groups have placed bids for German electric utility RWE AG (ETR:RWE) (FRA:RWE)’s Czech gas transmission system operator Net4Gas, a Czech weekly magazine reported. Net4Gas, which operates a 2,500 km-long gas pipeline, could be worth about 1.4 billion euros ($1.7 billion).

?       French alcoholic-beverage giant Pernod Ricard SA (EPA:RI) said Patrick Ricard, its chairman and son of the company founder, died on Friday at the age of 67.

?       AstraZeneca plc (ADR) (NYSE:AZN) (LON:AZN) is down 0.7 percent in London after analysts at J.P. Morgan Cazenove lowered the drug maker to “underweight” from “neutral.”

 

Asia-Pacific

 

?       BlueScope Steel Limited (ASX:BSL), Australia’s largest steelmaker posted full-year net loss of 1.04 billion Australian dollars ($1.09 billion), compared to a loss of 1.05 billion Australian dollars in 2011, as it restructured its struggling business over the past year to cope with low steel prices and a high Australian dollar. Analysts were expecting a net loss of around 812 million Australian dollars.

?       China Pacific Insurance (Group) Co., Ltd (HKG:2601) (SHA:601601), the country’s third-largest insurer, fell 1.2 percent in Hong Kong after reporting a 55 percent drop in first-half profit from a year earlier, as investment income fell and growth in premium income slowed.

?       Australian shopping centre operator Westfield Group (ASX:WDC) is planning to cut up to 10 percent of its workforce, or about 400 employees, the Australian newspaper reported on Monday.

?       Japan’s struggling TV maker Sharp Corporation (TYO:6753) fell 5.4 percent after the Mainichi Shimbun newspaper reported the company may slash 10,000 jobs, or about 20 percent of its workforce, without citing sources.

?       Mainland property developer China Resources Land Limited (HKG:1109) gave up gains made earlier in the day to end 0.8 percent lower, despite reporting favorable first half earnings after markets closed on Friday.

?       Japanese construction equipment maker Komatsu Ltd (TYO:6301) slipped 1.3 percent after analysts at Merrill Lynch downgraded the stock to “neutral” from “buy.” Rival Hitachi Construction MachineryCo., Ltd. (TYO:6305) was also lowered by Merrill Lynch to “underperform” from “neutral.”

?       Tingyi (Cayman Islands) Holding Corp. (HKG:0322), China’s largest instant noodle maker, rose 5 percent after reporting a 24 percent rise in first half net profit to $284.42 million, from $229.03 million a year earlier.

?       Commonwealth Bank of Australia (ASX:CBA), the country’s biggest bank, and telecom operator Telstra Corporation Limited (ASX:TLS) ended significantly lower in Sydney as the firms started to trade ex-dividend. Commonwealth Bank, which paid a dividend of 1.97 Australian dollars, was down 2.7 percent, while Telstra, which paid a 0.14 Australian dollar dividend, was down 5.1 percent.

?       Japanese energy major JX Holdings, Inc. (TYO:5020) shed 1.9 percent after analysts at MUFJ Morgan Stanley cut the stock to “neutral” from “outperform.”

 

Economic Calendar for Monday, August 20, 2012:

 

08:30 A.M. ET:    Chicago Fed National Activity Index (July)

11:00 A.M. ET:    4-Week Bill Announcement

11:30 A.M. ET:    3-Month Bill Auction

11:30 A.M. ET:    6-Month Bill Auction