Morning Market Update
Stocks that are expected to trade actively in U.S. markets on Wednesday include: Hewlett-Packard Company (NYSE:HPQ), Zynga Inc (NASDAQ:ZNGA), Zipcar Inc (NASDAQ:ZIP), Avis Budget Group Inc. (NASDAQ:CAR), ArcelorMittal (ADR) (NYSE:MT), Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B), Wynn Resorts, Limited (NASDAQ:WYNN), Las Vegas Sands Corp. (NYSE:LVS), MGM Resorts International (NYSE:MGM), Salix Pharmaceuticals, Ltd. (NASDAQ:SLXP) and The Middleby Corporation (NASDAQ:MIDD).
Market Levels
• US: Dow Futures: 13246.00 (1.68%), S&P 500 Futures: 1446.10 (1.83%), NASDAQ Futures: 2697.75 (1.91%)
• Europe: CAC: 3723.30 (2.21%), DAX: 7774.90 (2.09%), FTSE: 6035.21 (2.28%)
• Asia-Pacific: Australia: 4705.90 (1.23%), China: 2269.13 (0.00%), Hong Kong: 23311.98 (2.81%), India: 5993.25 (0.71%), Japan: 10395.18 (0.00%).
• Metals: Gold: 1689.20 (0.80%), Silver: 31.40 (3.86%), Copper: 3.73 (2.25%)
• Energy: Crude Oil: 93.45 (1.78%), Natural Gas: 3.32 (-0.90%)
• Commodities: Corn: 6.99 (0.97%), Soya Bean: 14.09 (-0.51%), Wheat: 7.79 (0.19%)
• Currency: EUR/USD: 1.3252 (0.36%), GBP/USD: 1.6299 (0.31%), USD/JPY: 87.0900 (0.45%)
• 10 year US Treasury: 1.837% (0.080)
Market and Economic News Update
U.S. stock-index futures rise: U.S. stock-index futures are pointing to a higher open on Wednesday after U.S. lawmakers, late Tuesday, finally approved a bill to avert the “fiscal cliff.” The U.S. House of Representatives passed legislation that prevented most impending tax increases and postponed spending cuts by two months, but raised the tax rate on individuals earning more than $400,000 and married couples earning over $450,000.
European markets rally: European markets jumped in trade today, with the German DAX (INDEXDB:DAX) up 2.1 percent to 7774.90 points, the FTSE 100 (INDEXFTSE:UKX) added 2.3 percent to 6035.21 and the CAC 40 (INDEXEURO:PX1) gained 2.2 percent to 3723.30 points. The euro zone blue-chip ESTX 50 PR.EUR (INDEXSTOXX:SX5E) (Euro Stoxx 50) soared 2.5 percent on Wednesday.
Asian markets end higher: Asian markets closed higher on Wednesday after the U.S. House of Representatives voted in favor of legislation to end the “fiscal cliff” crisis. The HANG SENG INDEX (INDEXHANGSENG:HIS) ended up 2.9 percent at 23,312 points, its highest closing since June 2011. The S&P/ASX 200 (INDEXASX:XJO) index rallied 1.3 percent higher to 4,708.6 points. The benchmark Indian 30-share BSE SENSITIVE (INDEXBOM:SENSEX) index finished up 0.6 percent. The NIKKEI 225 (INDEXNIKKEI:NI225) and the SSE Composite Index (SHA:000001) (Shanghai Composite Index) were closed on Wednesday for the New Year’s holiday.
Stocks to Watch
Hewlett-Packard Company (NYSE:HPQ)
Hewlett-Packard Company (NYSE:HPQ) said it is evaluating the performance of its business divisions and assets with the view to potentially remove any that do not meet its objectives, according to a U.S. Securities and Exchange Commission filing. “We also continue to evaluate the potential disposition of assets and businesses that may no longer help us meet our objectives,” Chief Executive Officer Meg Whitman said in a December 27 10-K filing. Hewlett-Packard Company (NYSE:HPQ) has been plagued with declining sales and other issues over the past year, including an $8.8 billion write-down of the acquired software company Autonomy Corp in November. Shares of Hewlett-Packard Company (NYSE:HPQ) jumped 3 percent in early trade.
Zynga Inc (NASDAQ:ZNGA)
Social games publisher Zynga Inc (NASDAQ:ZNGA) has shut down at least 11 of its videogame properties, including its well-known “PetVille” and “Mafia Wars 2? games, as part of an ongoing cost-cutting program. Zynga Inc (NASDAQ:ZNGA) had said in October it would shut down 13 underperforming titles to re-allocate resources and reduce costs. Zynga Inc (NASDAQ:ZNGA) is trying to shift focus to capture growth in mobile games, and has also applied for a preliminary application to run real-money gambling games in Nevada. Zynga Inc (NASDAQ:ZNGA) shares were up 2 percent at $2.41 in pre-market trading.
Zipcar Inc (NASDAQ:ZIP), Avis Budget Group Inc. (NASDAQ:CAR)
Instant car rental firm Zipcar Inc (NASDAQ:ZIP) is being acquired by Avis Budget Group Inc. (NASDAQ:CAR) for $500 million. Avis Budget Group Inc. (NASDAQ:CAR) has offered $12.25 per share in cash, a nearly 50 percent premium over Monday’s close for Zipcar Inc (NASDAQ:ZIP) shareholders. The deal is expected to close in the spring of 2013. Shares of Zipcar Inc (NASDAQ:ZIP) were trading slightly below the offer price in morning trade, while Avis Budget Group Inc. (NASDAQ:CAR) gained 2 percent.
ArcelorMittal (ADR) (NYSE:MT)
ArcelorMittal (ADR) (NYSE:MT) will sell a $1.1 billion stake in a Canadian iron ore mine operator to a consortium that includes Posco of South Korea and China Steel Corporation of Taiwan. Posco and its partners agreed to acquire a 15 percent stake in ArcelorMittal Mines Canada Inc. The transaction will be settled in the first and second quarters of 2013, ArcelorMittal (ADR) (NYSE:MT) said in a statement. ArcelorMittal (ADR) (NYSE:MT), the world’s largest steelmaker, is suffering from a sharp fall of demand for steel in Europe, and has cut its dividend and sold assets to help reduce $23.2 billion of debt.
Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B)
Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B)’s agricultural-products unit CTB Inc. has acquired Martin Industries Corp. for an undisclosed amount. Martin Industries and its subsidiaries make farm equipments like bucket elevators and grain conveyors. The acquisition will help CTB “offer its customers and dealers a complete grain preservation package,” Chief Executive Officer Victor Mancinelli said in a statement. Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B) shares were up 1 percent before the opening bell.
Wynn Resorts, Limited (NASDAQ:WYNN), Las Vegas Sands Corp. (NYSE:LVS), MGM Resorts International (NYSE:MGM)
Wynn Resorts, Limited (NASDAQ:WYNN), Las Vegas Sands Corp. (NYSE:LVS), MGM Resorts International (NYSE:MGM) are likely to be in focus in Wednesday trading after data showed casino revenues in Macau rose 13.5 percent in 2012 to a record $38 billion. December revenue also hit a monthly record of $3.5 billion.
Salix Pharmaceuticals, Ltd. (NASDAQ:SLXP)
The U.S. Food and Drug Administration has approved Salix Pharmaceuticals, Ltd. (NASDAQ:SLXP)’s Fulyzaq, the first anti-diarrheal drug for HIV/AIDS patients. The agency approved Salix Pharmaceuticals, Ltd. (NASDAQ:SLXP)’s application to sell Fulyzaq to HIV/AIDS patients whose diarrhea is not caused by an infection from a virus, bacteria, or parasite. Diarrhea is a common reason why HIV/AIDS patients stop or switch antiretroviral therapies. Salix Pharmaceuticals, Ltd. (NASDAQ:SLXP) has seen its revenue jump in recent quarters, helped by sales of antibiotic Xifaxan. Shares of Salix Pharmaceuticals, Ltd. (NASDAQ:SLXP) added 4 percent in early morning trade.
The Middleby Corporation (NASDAQ:MIDD)
Commercial cooking equipment maker The Middleby Corporation (NASDAQ:MIDD) has acquired Viking Range Corp. for $380 million in cash, as part of a move to expand in the residential sector. Viking Range, which has annual sales of about $200 million, makes products for use in residential cooking. The Middleby Corporation (NASDAQ:MIDD) has posted quarterly revenue growth for more than two years, and last month reported strong third-quarter earnings and sales. The Middleby Corporation (NASDAQ:MIDD) will hold a conference call on Wednesday to discuss the deal. The Middleby Corporation (NASDAQ:MIDD) shares were largely unchanged in pre-market trading.
Economic Calendar for Wednesday, January 02, 2013:
07:45 A.M. ET: ICSC-Goldman Store Sales (Week ending Friday, December 29, 2012)
08:55 A.M. ET: Redbook Index (MoM) (December 23)
08:55 A.M. ET: Redbook Index (YoY) (December 23)
08:55 A.M. ET: Markit Manufacturing PMI (December)
10:00 A.M. ET: Construction Spending (MoM) (November)
10:00 A.M. ET: ISM Manufacturing PMI (December)
10:00 A.M. ET: ISM Prices Paid (December)
11:30 A.M. ET: 4-Week Bill Auction
01:00 P.M. ET: 3-Month Bill Auction
01:00 P.M. ET: 6-Month Bill Auction
02:00 P.M. ET: FOMC Minutes
