Morning Market News
Stocks that are expected to trade actively in U.S. markets on Wednesday include: Bank of America Corp (NYSE:BAC), Intel Corporation (NASDAQ:INTC), Yahoo! Inc. (NASDAQ:YHOO), Liberty Global Inc. (NASDAQ:LBTYA), CSX Corporation (NYSE:CSX), The Procter & Gamble Company (NYSE:PG), Amgen, Inc. (NASDAQ:AMGN), Mattel, Inc. (NASDAQ:MAT), News Corp (NASDAQ:NWSA), Quest Diagnostics Inc (NYSE:DGX), Johnson & Johnson (NYSE:JNJ), Discover Financial Services (NYSE:DFS) and Cirrus Logic, Inc. (NASDAQ:CRUS).
• US: Dow Futures: 14600.00 (-0.58%), S&P 500 Futures: 1557.60 (-0.71%), NASDAQ Futures: 2806.50 (-0.76%)
• Europe: CAC: 3633.98 (-1.43%), DAX: 7553.34 (-1.71%), FTSE: 6269.90 (-0.55%)
• Asia-Pacific: Australia: 5004.60 (1.09%), China: 2193.80 (-0.05%), Hong Kong: 21569.67 (-0.47%), India: 5688.70 (0.00%), Japan: 13382.89 (1.21%).
• Metals: Gold: 1383.50 (-0.28%), Silver: 23.22 (-1.75%), Copper: 3.19 (-3.60%)
• Energy: Crude Oil: 87.40 (-1.49%), Natural Gas: 4.23 (1.78%)
• Commodities: Corn: 6.39 (2.31%), Soya Bean: 13.75 (1.18%), Wheat: 7.03 (1.22%)
• Currency: EUR/USD: 1.3137 (-0.30%), GBP/USD: 1.5251 (-0.72%), USD/JPY: 97.9800 (0.45%)
• 10 year US Treasury: 1.709% (-0.015)
Market and Economic News Update
U.S. stock-index futures fall: U.S. stock-index futures are pointing to a lower open on Wednesday, following disappointing earnings from Bank of America Corp (NYSE:BAC), and concerns about slowing growth in China. In economic news, the Federal Reserve’s April edition of its Beige Book, a survey of regional economies, will be out at 2 P.M. ET. Data for crude oil inventories for the previous week will be released by the Energy Department at 10:30 A.M. ET. American Express Company (NYSE:AXP) and eBay Inc (NASDAQ:EBAY) are due to report quarterly numbers after the close.
European markets decline: European markets fell in trade and were on track for a fourth straight day of losses amid speculation of a sovereign downgrade for Germany. The German DAX (INDEXDB:DAX) was the biggest laggard across the region, dropping 1.7 percent to 7553.34 points. The FTSE 100 (INDEXFTSE:UKX) fell 0.6 percent to 6269.90 and the CAC 40 (INDEXEURO:PX1) slid 1.4 percent to 3633.98 points. The euro zone blue-chip ESTX 50 PR.EUR (INDEXSTOXX:SX5E) (Euro Stoxx 50) was down 1.4 percent.
Asian markets end mixed: Asian markets closed mixed on Wednesday amid worries about the strength of the economic recovery in China. The NIKKEI 225 (INDEXNIKKEI:NI225) rebounded after a three-day losing streak as the yen weakened. The HANG SENG INDEX (INDEXHANGSENG:HIS) and the SSE Composite Index (SHA:000001) (Shanghai Composite Index) dropped in trade today. The S&P/ASX 200 (INDEXASX:XJO) index posted its biggest gain in seven sessions and closed above the key psychological level of 5,000. The benchmark Indian 30-share BSE SENSITIVE (INDEXBOM:SENSEX) index ended the session on a flat note.
Stocks to Watch
Bank of America Corp (NYSE:BAC)
Bank of America Corp (NYSE:BAC) earned 20 cents per share for the first quarter, 2 cents below the consensus estimate, while revenue was slightly above analysts’ projections. Quarterly profits quadrupled from a year earlier, but most of it was due to cost cuts and less money set aside to cover bad loans, leaving the Street unimpressed. Revenue and profit from the consumer banking division dipped from a year earlier, while mortgage banking income also dropped. Shares of Bank of America Corp (NYSE:BAC) fell as much as 3 percent before the bell on Wednesday.
Intel Corporation (NASDAQ:INTC)
Intel Corporation (NASDAQ:INTC) reported first quarter earnings of 40 cents a share on revenue of $12.58 billion, falling slightly short of expectations for 41 cents a share on revenue of $12.59 billion. Intel Corporation (NASDAQ:INTC) said that improving demand for server chips offset a slump in the personal-computer market. For the current-quarter, the company expects revenue largely in line with Street estimates. Intel Corporation (NASDAQ:INTC) CEO Paul Otellini will retire next month, and the chipmaker is yet to name his replacement. Shares fell in pre-market trading.
Yahoo! Inc. (NASDAQ:YHOO)
Yahoo! Inc. (NASDAQ:YHOO) posted first quarter earnings excluding one-time items of 38 cents a share, on revenue of $1.07 billion, against forecasts for 24 cents a share on sales of $1.10 billion. Revenue from display ads fell 11 percent, while search advertising revenue increased 6 percent year over year. Meanwhile, Yahoo! Inc. (NASDAQ:YHOO) forecast current-quarter revenue below estimates. Shares have rallied since CEO Marissa Mayer took over nine months ago, but retreated as much as 5.1 percent in early trading following the quarterly numbers.
Liberty Global Inc. (NASDAQ:LBTYA)
Liberty Global Inc. (NASDAQ:LBTYA) is preparing a takeover offer for German cable provider Kabel Deutschland Holding AG (ETR:KD8) (FRA:KD8), according to a Reuters report. Liberty Global Inc. (NASDAQ:LBTYA) and Kabel Deutschland, both declined to comment on the report. Telecom major Vodafone Group Plc (ADR) (NASDAQ:VOD) is also reportedly interested in buying the company. Shares in Liberty Global Inc. (NASDAQ:LBTYA) were inactive in early New York trading.
CSX Corporation (NYSE:CSX)
CSX Corporation (NYSE:CSX) reported better than expected first quarter earnings and revenue as the railroad company reduced its expenses amid a decline in coal revenue. CSX Corporation (NYSE:CSX) earned $459 million, or 45 cents a share, in the quarter ended March 29, on revenue of nearly $3 billion, topping expectations for 40 cents a share on revenue of $2.92 billion. In addition, the company raised its quarterly dividend by 7 percent to 15 cents a share and authorized a $1 billion share buyback program. Shares are down more than a percent following the report.
The Procter & Gamble Company (NYSE:PG)
The Procter & Gamble Company (NYSE:PG) is seeking to increase the time it will take to pay suppliers by as much as 30 days, The Wall Street Journal reported late yesterday. The Procter & Gamble Company (NYSE:PG) is planning to pay its bills in 75 days from the average of 45 days it takes currently, a move that could free up to $2 billion in cash, the newspaper reported citing people familiar with the matter.
Amgen, Inc. (NASDAQ:AMGN)
Amgen, Inc. (NASDAQ:AMGN) has agreed to pay $24.9 million to settle allegations that it violated the False Claims Act, the U.S. Department of Justice announced late yesterday. The Justice Department had alleged that Amgen, Inc. (NASDAQ:AMGN) paid kickbacks to long-term care pharmacy providers, Omnicare Inc, Kindred Healthcare Inc and PharMerica Corp, in exchange for switching Medicare and Medicaid patients to its anemia drug Aranesp. Shares slipped in extended-hours trading, and were inactive in the pre-market session.
Mattel, Inc. (NASDAQ:MAT)
Toymaker Mattel, Inc. (NASDAQ:MAT) reported higher first-quarter profit amid a double-digit rise in American Girl doll sales. Quarterly profit rose to $38.5 million, or 11 cents a share, from $7.8 million, or 2 cents a share, in the year-ago period. Net sales increased 7.2 percent to $995.6 million. Analysts had projected per-share earnings of 9 cents on revenue of $986 million. Shares closed yesterday at $42.98 and were up in pre-market trading.
News Corp (NASDAQ:NWSA)
News Corp (NASDAQ:NWSA) has announced that 21st Century Fox will be the name of the soon-to-be-reconstituted film and television company, reversing an earlier decision to call the business Fox Group. Rupert Murdoch will be the chairman and chief executive officer of the new company, which will include Fox News, Fox Broadcasting and its Hollywood television and movie studio. News Corp (NASDAQ:NWSA) is expected to complete the spin-off in early July.
Quest Diagnostics Inc (NYSE:DGX)
Medical lab operator Quest Diagnostics Inc (NYSE:DGX) earned 89 cents per share for the first quarter, well short of the average analysts’ estimate of $1.03 per share. Revenue came in at $1.78 billion, trailing expectations for $1.86 billion. Quest Diagnostics Inc (NYSE:DGX) is currently executing a $500 million restructuring program to restore growth at a time when consumers are cutting back on doctor visits due to the slowdown in the economy.
Johnson & Johnson (NYSE:JNJ)
Johnson & Johnson (NYSE:JNJ) received favorable ruling from an Illinois jury in a product liability case involving ASR hip implants made by the company’s DePuy Orthopedics unit. In March, a Los Angeles jury awarded $8.3 million after it found that the design of the ASR XL hip implant was defective. Industry analysts believe that the ASR-related suits would ultimately cost Johnson & Johnson (NYSE:JNJ) billions of dollars to resolve.
Discover Financial Services (NYSE:DFS)
Credit card company Discover Financial Services (NYSE:DFS) raised its quarterly dividend by 43 percent to 20 cents a share from 14 cents a share. The dividend will be payable on May 23 to shareholders of record on May 9. Shares of Discover Financial Services (NYSE:DFS) closed Tuesday at $43.01, and were down in pre-market trading.
Cirrus Logic, Inc. (NASDAQ:CRUS)
Cirrus Logic, Inc. (NASDAQ:CRUS) shares tumbled in early morning trade after the chip maker said it expects to record a significant inventory reserve charge in the fourth quarter and that its profit margins for the period will be lower than forecasts. Cirrus Logic, Inc. (NASDAQ:CRUS) gave a preliminary estimate of fiscal fourth-quarter revenue of $206.9 million, below analysts’ expectations for $210 million.
Economic Calendar for Wednesday, April 17, 2013:
07:00 A.M. ET: MBA Purchase Applications (Week ending Friday, April 12)
09:00 A.M. ET: Federal Reserve Gov. Jeremy Stein speaks.
09:00 A.M. ET: St. Louis Federal Reserve Bank President James Bullard speaks.
10:30 A.M. ET: EIA Petroleum Status Report (Week ending Friday, April 12)
12:00 P.M. ET: Boston Federal Reserve Bank President Eric Rosengren speaks.
02:00 P.M. ET: Fed’s Beige Book