Morning Market News
Stocks that are expected to trade actively in U.S. markets on Tuesday include: Goldman Sachs Group, Inc. (NYSE:GS), The Coca-Cola Company (NYSE:KO), Johnson & Johnson (NYSE:JNJ), Red Hat, Inc. (NYSE:RHT), BlackRock, Inc. (NYSE:BLK), Sarepta Therapeutics Inc (NASDAQ:SRPT), HCA Holdings Inc (NYSE:HCA), Plains All American Pipeline, L.P. (NYSE:PAA), U.S. Bancorp (NYSE:USB), NetGear, Inc. (NASDAQ:NTGR), Forest Laboratories, Inc. (NYSE:FRX) and Mack Cali Realty Corp (NYSE:CLI).
Market Levels
• US: Dow Futures: 14656.00 (0.99%), S&P 500 Futures: 1557.10 (0.88%), NASDAQ Futures: 2809.75 (0.94%)
• Europe: CAC: 3689.07 (-0.58%), DAX: 7673.48 (-0.51%), FTSE: 6311.88 (-0.50%)
• Asia-Pacific: Australia: 4950.80 (-0.34%), China: 2194.85 (0.59%), Hong Kong: 21672.03 (-0.46%), India: 5688.95 (2.16%), Japan: 13221.44 (-0.41%).
• Metals: Gold: 1387.80 (1.96%), Silver: 23.58 (0.92%), Copper: 3.28 (0.15%)
• Energy: Crude Oil: 88.60 (-0.12%), Natural Gas: 4.14 (0.17%)
• Commodities: Corn: 6.26 (-2.30%), Soya Bean: 13.64 (-1.81%), Wheat: 6.96 (-2.85%)
• Currency: EUR/USD: 1.3144 (0.83%), GBP/USD: 1.5317 (0.21%), USD/JPY: 97.8700 (1.14%)
• 10 year US Treasury: 1.726% (0.045)
Market and Economic News Update
U.S. stock-index futures rise: U.S. stock-index futures are pointing to a higher open on Tuesday, helped by a batch of strong earnings reports and positive March U.S. housing data. Housing starts climbed 7 percent last month to a 1.04 million annual rate, the most since June 2008, the Commerce Department figures showed today in Washington. Economists were expecting a reading of 930,000. In other economic news, Consumer Price Index slipped 0.2 percent in March, compared to a 0.7 percent increase in February.
European markets decline: European markets fell in trade after data showed German investor confidence tumbled in April. The ZEW index fell to 36.3 this month from 48.5 in March. The German DAX (INDEXDB:DAX) dropped 0.5 percent to 7673.48 points, the FTSE 100 (INDEXFTSE:UKX) fell 0.5 percent to 6311.88 and the CAC 40 (INDEXEURO:PX1) slid 0.6 percent to 3689.07 points. The euro zone blue-chip ESTX 50 PR.EUR (INDEXSTOXX:SX5E) (Euro Stoxx 50) was down 0.3 percent.
Asian markets end mixed: Asian markets pared back some of their losses to close mixed on Tuesday, following weak overnight cues from Wall Street. The NIKKEI 225 (INDEXNIKKEI:NI225) fell almost 2 percent soon after open but rebounded from lows to close down 0.41 percent. The HANG SENG INDEX (INDEXHANGSENG:HIS) fell around 0.5 percent, while the SSE Composite Index (SHA:000001) (Shanghai Composite Index) closed up 0.59 percent. The S&P/ASX 200 (INDEXASX:XJO) index lost 0.3 percent, dragged by gold mining stocks. The benchmark Indian 30-share BSE SENSITIVE (INDEXBOM:SENSEX) index was the best performer in the region, jumping 2.1 percent to close at 18744.93 points.
Stocks to Watch
Goldman Sachs Group, Inc. (NYSE:GS)
Goldman Sachs Group, Inc. (NYSE:GS) reported better than expected first quarter profit as it earned more from investment banking. Quarter profit increased to $2.26 billion, or $4.29 a share, from $2.11 billion, or $3.92 a share in the same period last year. Revenue grew to $10.9 billion from $9.95 billion a year earlier. Analysts were expecting Goldman Sachs Group, Inc. (NYSE:GS) to post earnings of $3.90 a share on revenue of $9.67 billion. Investment banking revenue jumped 36 percent to $1.6 billion, while equities revenue dropped 15 percent to $1.9 billion. Net revenues from Goldman Sachs Group, Inc. (NYSE:GS)’s Fixed Income, Currency & Commodity business fell 7 percent to $3.2 billion.
The Coca-Cola Company (NYSE:KO)
The Coca-Cola Company (NYSE:KO)’s first quarter earnings per share came in at 39 cents, down 13 percent from the year-ago period and below the average analysts’ estimates of 45 cents per share. Revenue fell 1 percent to $11.04 billion compared to the consensus estimate of $11.05 billion. The Coca-Cola Company (NYSE:KO) reported a 4 percent worldwide volume growth in the first quarter, with 3 percent growth in Coca-Cola Americas and 5 percent growth in Coca-Cola International. Shares of The Coca-Cola Company (NYSE:KO) soared following the results.
Johnson & Johnson (NYSE:JNJ)
Johnson & Johnson (NYSE:JNJ) reported strong first-quarter earnings, as increasing sales of newer drug, including the prostate cancer drug Zytiga and stroke prevention treatment Xarelto, offset weak sales of its treatments for heart-burn and attention deficit disorder. Profit fell to $3.50 billion, or $1.22 a share, from $3.91 billion, or $1.41 a share a year earlier. Sales jumped 8.5 percent to $17.5 billion. Earnings excluding one-time items stood at $1.44 a share, topping the average analysts’ estimate by 5 cents. Johnson & Johnson (NYSE:JNJ) jumped 1.5 percent to $82.93 in early New York trading.
Red Hat, Inc. (NYSE:RHT)
Software company Red Hat, Inc. (NYSE:RHT) has announced a $300 million share repurchase program, sending shares higher in extended-hours trading. The new program replaces the previous $300 million repurchase program, which was used to buy 5.9 million shares over a period of 13 months. The buyback will be funded using Red Hat, Inc. (NYSE:RHT)’s working capital. Red Hat, Inc. (NYSE:RHT) had approximately 193 million outstanding shares as of February 28, 2013.
BlackRock, Inc. (NYSE:BLK)
BlackRock, Inc. (NYSE:BLK) said first-quarter profit grew 10 percent as the world’s biggest money manager reported more assets under management while its exchange-traded funds drew client cash. Profit increased to $632 million, or $3.62 per share, from $572 million, or $3.14 per share, in the year-ago period. Excluding one-time items, BlackRock, Inc. (NYSE:BLK) reported earnings of $3.65 per share, 7 cents above the average analysts’ estimate. Revenue rose 8.9 percent to $2.45 billion, also higher than expectations for $2.43 billion. Total assets under management stood at $3.936 trillion at the end of the first quarter, compared to $3.684 trillion a year earlier and $3.792 trillion in the fourth quarter of last year. BlackRock, Inc. (NYSE:BLK) said customers added $33.7 billion to equity offerings, while $9 billion was added to multi-asset class and $1.5 billion to core alternatives.
Sarepta Therapeutics Inc (NASDAQ:SRPT)
Sarepta Therapeutics Inc (NASDAQ:SRPT) said the U.S. Food and Drug Administration has asked for additional information on its eteplirsen drug to treat Duchenne muscular dystrophy. Sarepta Therapeutics Inc (NASDAQ:SRPT) said the regulator sought more information to consider an early approval. The FDA also requested Sarepta Therapeutics Inc (NASDAQ:SRPT) provide a detailed discussion of all clinical outcomes related to the drug study. Sarepta Therapeutics Inc (NASDAQ:SRPT) shares fell 9 percent in early morning trade after closing at $39.24 on the NASDAQ on Monday.
HCA Holdings Inc (NYSE:HCA)
For-profit hospital operator HCA Holdings Inc (NYSE:HCA) said it expects to post sales of $8.44 billion in the first quarter, versus Street expectations for $8.68 billion. HCA Holdings Inc (NYSE:HCA) said admissions growth slowed during the quarter, with most of the weakness occurring in the second half of the three-month period. HCA Holdings Inc (NYSE:HCA) said inpatient admissions fell compared to last year, while outpatient volumes were lower than expected. Shares of HCA Holdings Inc (NYSE:HCA) declined in New York pre-market trading.
Plains All American Pipeline, L.P. (NYSE:PAA)
Plains All American Pipeline, L.P. (NYSE:PAA) said it is building a new 310-mile pipeline to transport West Texas’ Permian Basin crude to refineries in the Houston area. The pipeline, called the Cactus pipeline is expected to be completed by the first quarter of 2015. Plains All American Pipeline, L.P. (NYSE:PAA) expects the project to cost between $350 million and $375 million. Shares of Plains All American Pipeline, L.P. (NYSE:PAA) were flat in early trade.
U.S. Bancorp (NYSE:USB)
U.S. Bancorp (NYSE:USB)’s first-quarter net income increased to $1.43 billion, or 73 cents per share, from $1.34 billion, or 67 cents per share, in the same period last year. Revenue fell to $4.87 billion, from $4.93 billion a year earlier. Analysts were expecting U.S. Bancorp (NYSE:USB) to report per-share earnings of 73 cents a share on revenue of $5.04 billion. The country’s largest regional lender said a year-over-year reduction in non-interest expense and a lower provision for credit losses drove quarterly earnings higher. U.S. Bancorp (NYSE:USB) shares were inactive in pre-market dealings.
NetGear, Inc. (NASDAQ:NTGR)
NetGear, Inc. (NASDAQ:NTGR) slashed its first quarter earnings and revenue outlook citing lower-than-planned shipments of its new ReadyNas products. The networking equipment vendor now expects to earn between 45 cents and 50 cents a share on revenue of $290 million to $295 million, lower than analysts’ expectations for 59 cents a share on sales of $300 million. NetGear, Inc. (NASDAQ:NTGR) will report quarterly numbers on April 25. NetGear, Inc. (NASDAQ:NTGR) shares tumbled in extended-hours trading, after closing the regular session at $30.88.
Forest Laboratories, Inc. (NYSE:FRX)
Forest Laboratories, Inc. (NYSE:FRX) and Spanish pharmaceutical company Almirall announced positive results for a phase-3 clinical trial of its new inhaler known as Genuair. The Genuair inhaler delivers fixed dose combinations of alclidinium bromide and formoterol fumarate to treat chronic obstructive pulmonary disease. The companies said they would file a new drug application if further results proved similarly positive. Forest Laboratories, Inc. (NYSE:FRX) closed at $36.11 on Monday, and were inactive in pre-market trade.
Mack Cali Realty Corp (NYSE:CLI)
Real estate investment trust Mack Cali Realty Corp (NYSE:CLI) said it will cut its second quarter dividend by 33 percent to 30 cents a share from 45 cents a share. The move will help Mack Cali Realty Corp (NYSE:CLI) save about $13.2 million a quarter. Mack Cali Realty Corp (NYSE:CLI) owns 270 office properties and 9 residential properties, all in the Northeast. Shares fell $2.14, or 7.6 percent, to $26.25 in early morning trade.
Economic Calendar for Tuesday, April 16, 2013:
07:45 A.M. ET: ICSC-Goldman Store Sales (Week ending Saturday, April 13)
08:30 A.M. ET: Consumer Price Index (YoY) (March)
08:30 A.M. ET: Consumer Price Index (MoM) (March)
08:30 A.M. ET: Consumer Price Index Ex Food & Energy (YoY) (March)
08:30 A.M. ET: Consumer Price Index Ex Food & Energy (MoM) (March)
08:30 A.M. ET: Housing Starts (MoM) (March)
08:30 A.M. ET: Building Permits (MoM) (March)
08:55 A.M. ET: Redbook index (YoY) (April 7)
08:55 A.M. ET: Redbook index (MoM) (April 7)
09:55 A.M. ET: Industrial Production (MoM) (March)
09:55 A.M. ET: Capacity Utilization (March)
11:30 A.M. ET: 4-Week Bill Auction
12:00 P.M. ET: Federal Reserve Governor Elizabeth Duke speaks.
01:00 P.M. ET: Minneapolis Fed President Narayana Kocherlakota speaks.
03:00 P.M. ET: Federal Reserve Vice Chair Janet Yellen speaks.
