Morning Market Update
Stocks that are expected to trade actively in U.S. markets on Thursday include: Accenture Plc (NYSE:ACN), IntercontinentalExchange Inc (NYSE:ICE), NYSE Euronext (NYSE:NYX), Bed Bath & Beyond Inc. (NASDAQ:BBBY), Darden Restaurants, Inc. (NYSE:DRI), Jabil Circuit, Inc. (NYSE:JBL), American Railcar Industries, Inc. (NASDAQ:ARII), Greenbrier Companies Inc (NYSE:GBX), Arris Group, Inc. (NASDAQ:ARRS), Paychex, Inc. (NASDAQ:PAYX), SandRidge Energy Inc. (NYSE:SD), KB Home (NYSE:KBH), Amicus Therapeutics, Inc. (NASDAQ:FOLD) and Allscripts Healthcare Solutions Inc (NASDAQ:MDRX).
Market Levels
• US: Dow Futures: 13212.00 (-0.05%), S&P 500 Futures: 1433.50 (0.03%), NASDAQ Futures: 2698.50 (0.20%)
• Europe: CAC: 3669.75 (0.14%), DAX: 7668.27 (0.00%), FTSE: 5967.11 (0.09%)
• Asia-Pacific: Australia: 4634.10 (0.35%), China: 2168.35 (0.28%), Hong Kong: 22659.78 (0.16%), India: 5916.40 (-0.22%), Japan: 10039.33 (-1.21%).
• Metals: Gold: 1659.70 (-0.48%), Silver: 30.78 (-1.10%), Copper: 3.54 (-1.71%)
• Energy: Crude Oil: 89.78 (-0.22%), Natural Gas: 3.39 (2.14%)
• Commodities: Corn: 6.93 (-2.39%), Soya Bean: 14.19 (-1.88%), Wheat: 7.90 (-0.68%)
• Currency: EUR/USD: 1.3289 (0.47%), GBP/USD: 1.6286 (0.24%), USD/JPY: 84.2900 (-0.14%)
• 10 year US Treasury: 1.789% (-0.012)
Market and Economic News Update
U.S. stock-index futures mixed: U.S. stock-index futures are pointing to a mixed open on Thursday despite a better-than-expected GDP report. The U.S. economy grew faster than initially estimated during the third quarter of 2012, expanding at a 3.1 percent annual rate, the Commerce Department said today. Economists had expected a reading of 2.8 percent. Meanwhile, weekly jobless claims increased 17,000 to a seasonally adjusted 361,000 in the week ended December 15, according to the Labor Department. Economists had expected a reading of 357,000.
European markets gain: European markets rebounded in trade following strong U.S. GDP data. The German DAX (INDEXDB:DAX) was flat at 7668.27, the FTSE 100 (INDEXFTSE:UKX) added 0.1 percent to 5967.11 and the CAC 40 (INDEXEURO:PX1) gained 0.2 percent to 3669.75 points. The euro zone blue-chip ESTX 50 PR.EUR (INDEXSTOXX:SX5E) (Euro Stoxx 50) was up 0.2 percent
Asian markets end mixed: Asian markets closed mixed on Thursday amid concerns about the looming U.S. “fiscal cliff” deadline. The NIKKEI 225 (INDEXNIKKEI:NI225) shed 1.2 percent to 10,039.33. The HANG SENG INDEX (INDEXHANGSENG:HIS) closed 0.2 percent higher at 22,659.8, while the SSE Composite Index (SHA:000001) (Shanghai Composite Index) gained 0.3 percent. The S&P/ASX 200 (INDEXASX:XJO) index closed up 0.3 percent to 4,634.6 points. The benchmark Indian 30-share BSE SENSITIVE (INDEXBOM:SENSEX) index finished 0.1 percent lower.
Stocks to Watch
Accenture Plc (NYSE:ACN)
IT services and consulting company Accenture Plc (NYSE:ACN) posted first quarter earnings of $1.06 a share, edging past expectations by 2 cents a share. Revenue gained 2.1 percent to $7.22 billion, trailing estimates. Consulting revenue was flat for the period at $3.96 billion, while outsourcing revenue jumped 13 percent to $3.26 billion. Accenture Plc (NYSE:ACN) provided current-quarter revenue guidance that was in the lower-end of expectations. Accenture Plc (NYSE:ACN) shares were down 5.3 percent at $66.70.
IntercontinentalExchange Inc (NYSE:ICE), NYSE Euronext (NYSE:NYX)
U.S. commodity-trading powerhouse IntercontinentalExchange Inc (NYSE:ICE) will buy transatlantic peer NYSE Euronext (NYSE:NYX) for about $8.2 billion in cash and stock. The deal values NYSE Euronext (NYSE:NYX) at about $33.12 a share, a 37.7 percent premium to its Wednesday closing price. Post the transaction, NYSE Euronext (NYSE:NYX) shareholders would own approximately 36 percent of IntercontinentalExchange Inc (NYSE:ICE) shares. NYSE Euronext (NYSE:NYX) shares jumped 36 percent in pre-market trading, while IntercontinentalExchange Inc (NYSE:ICE) shares rose 2.1 percent.
Bed Bath & Beyond Inc. (NASDAQ:BBBY)
Bed Bath & Beyond Inc. (NASDAQ:BBBY) posted third quarter earnings of $1.03 a share, edging past analysts’ expectations by a penny a share. Revenue increased 15 percent to $2.7 billion, falling short of estimates for $2.74 billion. Same-store sales grew 1.7 percent, compared with 4.1 percent in the year-ago period. Bed Bath & Beyond Inc. (NASDAQ:BBBY) provided current-quarter earnings guidance that missed Street forecasts. Separately, the retailer announced that executive vice president Stephen Gillett will leave. Bed Bath & Beyond Inc. (NASDAQ:BBBY) shares fell 5.4 percent to $57.02 in pre-market trading.
Darden Restaurants, Inc. (NYSE:DRI)
Darden Restaurants, Inc. (NYSE:DRI) reported second quarter quarterly and revenue that were in line with analysts’ expectations. Earnings excluding items stood at $33.6 million, or 26 cents a share, while revenue came in at $1.96 billion. For fiscal 2013, Darden Restaurants, Inc. (NYSE:DRI) said it expects earnings of $3.29 to $3.49, compared with analysts’ estimates of $3.42 a share. Shares of Darden Restaurants, Inc. (NYSE:DRI) were inactive prior to the opening bell.
Jabil Circuit, Inc. (NYSE:JBL)
Jabil Circuit, Inc. (NYSE:JBL) reported first quarter earnings excluding certain items of 61 cents a share, on sales of $4.6 billion, beating Street estimates of 56 cents a share on revenue of $4.41 billion. Gross margin for the period narrowed to 7.6 percent from 7.9 percent. Jabil Circuit, Inc. (NYSE:JBL) provided current-quarter earnings guidance that fell slightly short of expectations. The company now expects core earnings of 50 cents to 58 cents a share on revenue of $4.3 billion to $4.5 billion, compared to analysts’ projections of a profit of 59 cents a share and $4.38 billion in revenue. Shares of Jabil Circuit, Inc. (NYSE:JBL) climbed in early trading.
American Railcar Industries, Inc. (NASDAQ:ARII)
American Railcar Industries, Inc. (NASDAQ:ARII), controlled by billionaire investor Carl Icahn, said it is willing to raise its offer for Greenbrier Companies Inc (NYSE:GBX) after the rival railcar maker rejected an earlier $488 million buyout offer, Reuters reported. American Railcar Industries, Inc. (NASDAQ:ARII) said it could increase its offer by 10 percent to $22 per share, valuing Greenbrier Companies Inc (NYSE:GBX) at $597 million. American Railcar Industries, Inc. (NASDAQ:ARII)’s shares were flat on the NASDAQ, while Greenbrier Companies Inc (NYSE:GBX)’s fell 4 percent New York Stock Exchange.
Arris Group, Inc. (NASDAQ:ARRS)
Arris Group, Inc. (NASDAQ:ARRS) has agreed to acquire Motorola Mobility’s home business from Google Inc (NASDAQ:GOOG) for $2.35 billion in cash and stock. Arris Group, Inc. (NASDAQ:ARRS) will pay about $2.05 billion in cash and about $300 million in newly issued shares that will give Google Inc (NASDAQ:GOOG) an ownership stake of about 15.7 percent. The deal closing is expected to close by the second quarter. Arris Group, Inc. (NASDAQ:ARRS)’ stock surged $2.46 to $17 in pre-market trading, while Google’s stock was trading modestly higher.
Paychex, Inc. (NASDAQ:PAYX)
Payroll and human resource service company Paychex, Inc. (NASDAQ:PAYX) said fiscal second-quarter earnings rose 5.3 percent to $147.9 million, or 41 cents a share, from $140.4 million, or 39 cents a share, a year earlier. Revenue edged 4.3 percent higher to $569.4 million. Analysts had projected a per-share profit of 41 cents on revenue of $573 million. Payroll-service sales, which account for the bulk of Paychex, Inc. (NASDAQ:PAYX)’s revenue, increased about 1.4 percent, while human-resources revenue gained 12 percent. Shares of Paychex, Inc. (NASDAQ:PAYX) were inactive in early trade.
SandRidge Energy Inc. (NYSE:SD)
Oil and natural gas exploration company SandRidge Energy Inc. (NYSE:SD) will sell its Permian Basin properties in west Texas to Sheridan Production Partners for $2.6 billion in cash. The deal is expected to close in the first quarter of 2013, and SandRidge Energy Inc. (NYSE:SD) plans to use proceeds to lower debt and fund drilling at its Mississippian Lime fields in Oklahoma and Kansas. SandRidge Energy Inc. (NYSE:SD)’s shares jumped in morning trade.
KB Home (NYSE:KBH)
KB Home (NYSE:KBH) reported better than expected fourth-quarter earnings and revenue, as orders jumped for the third straight quarter. For the period ended November 30, KB Home (NYSE:KBH) earned $7.7 million, or 10 cents per share, compared with $13.9 million, or 18 cents per share, in the year-ago period. Revenue rose 21 percent to $578.2 million. Analysts were expecting the homebuilder to earn 6 cents per share on revenue of $562.9 million. Net orders increased 4 percent to 1,557, while the average selling price jumped 14 percent to $270,700. KB Home (NYSE:KBH)’s full-year loss narrowed to $59 million, or 76 cents per share, from $178.8 million, or $2.32 per share, a year earlier, while revenue gained 18 percent to $1.56 billion from $1.32 billion.
Amicus Therapeutics, Inc. (NASDAQ:FOLD)
Amicus Therapeutics, Inc. (NASDAQ:FOLD) said its experimental treatment for Fabry disease, a rare, inherited disorder, failed in a clinical trial. Amicus Therapeutics, Inc. (NASDAQ:FOLD), which was developing the drug with GlaxoSmithKline Plc, said six-month results from a late-stage study of migalastat missed the primary endpoint. Fabry disease affects about 5,000 to 10,000 people globally and is caused by the human body’s inability to produce an enzyme that helps breaks down fat. Shares of Amicus Therapeutics, Inc. (NASDAQ:FOLD) plunged in early trade.
Allscripts Healthcare Solutions Inc (NASDAQ:MDRX)
Allscripts Healthcare Solutions Inc (NASDAQ:MDRX) said CEO Glen Tullman will step down and will be replaced by board member Paul Black. Allscripts Healthcare Solutions Inc (NASDAQ:MDRX) also ended a review of its strategic alternatives, which sent its stock tumbling more than percent in pre-market trading. The healthcare IT company’s shares had surged in November after it said it was considering a sale of the company. Allscripts Healthcare Solutions Inc (NASDAQ:MDRX) had received bids from private equity firms Carlyle Group LP, Blackstone Group LP and TPG Capital LP. “The board conducted a thorough and rigorous review of strategic alternatives,” Allscripts Healthcare Solutions Inc (NASDAQ:MDRX)’s Chairman of the Board Dennis Chookaszian said in a statement. “The board concluded, however, that the best course at this time is to develop Allscripts’ long-term potential under the direction of our new management team.”
Economic Calendar for Thursday, December 20, 2012:
08:30 A.M. ET: Gross Domestic Product Annualized (Q3)
08:30 A.M. ET: Gross Domestic Purchases Price Index (Q3)
08:30 A.M. ET: Initial Jobless Claims (December 15)
08:30 A.M. ET: Continuing Jobless Claims (December 8)
08:30 A.M. ET: Personal Consumption Expenditures Prices (QoQ) (Q3)
08:30 A.M. ET: Core Personal Consumption Expenditures (QoQ) (Q3)
10:00 A.M. ET: Existing Home Sales Change (November)
10:00 A.M. ET: Existing Home Sales (MoM) (November)
10:00 A.M. ET: Philadelphia Fed Manufacturing Survey (December)
10:00 A.M. ET: CB Leading Indicator (MoM) (November)
10:30 A.M. ET: EIA Natural Gas Report (Week ending Friday, December 14)
01:00 P.M. ET: 5-Year TIPS Auction
