Morning Market Update
Stocks that are expected to trade actively in U.S. markets on Friday include: Dell Inc. (NASDAQ:DELL), Intel Corporation (NASDAQ:INTC), Lions Gate Entertainment Corp. (USA) (NYSE:LGF), The Boeing Company (NYSE:BA), Guess?, Inc. (NYSE:GES), American Realty Capital Properties Inc (NASDAQ:ARCP), General Electric Company (NYSE:GE), Palo Alto Networks Inc (NYSE:PANW), American Eagle Outfitters (NYSE:AEO), Krispy Kreme Doughnuts (NYSE:KKD), CVS Caremark Corporation (NYSE:CVS), Express Scripts Holding Company (NASDAQ:ESRX) and Catamaran Corp (USA) (NASDAQ:CTRX).
• US: Dow Futures: 15239.00 (-0.52%), S&P 500 Futures: 1644.90 (-0.53%), NASDAQ Futures: 2996.75 (-0.44%)
• Europe: CAC: 3968.94 (-0.69%), DAX: 8349.51 (-0.61%), FTSE: 6595.54 (-0.93%)
• Asia-Pacific: Australia: 4926.60 (-0.08%), China: 2300.59 (-0.75%), Hong Kong: 22392.16 (-0.41%), Japan: 13774.54 (1.35%).
• Metals: Gold: 1406.50 (-0.35%), Silver: 22.38 (-1.39%), Copper: 3.29 (-0.86%)
• Energy: Crude Oil: 92.88 (-0.78%), Natural Gas: 4.04 (0.52%)
• Commodities: Corn: 5.61 (-0.35%), Soya Bean: 15.07 (-0.47%), Wheat: 6.93 (-0.46%)
• Currency: EUR/USD: 1.2992 (-0.44%), GBP/USD: 1.5224 (-0.05%), USD/JPY: 100.5300 (-0.20%)
• 10 year US Treasury: 2.100% (-0.011)
Market and Economic News Update:
U.S. stock-index futures decline: U.S. stock-index futures are pointing to a lower open on Friday as consumer spending unexpectedly fell in April. U.S. consumer spending fell 0.2 percent in April, the first decline in almost a year, following a 0.1 percent rise in March, the Commerce Department said today. Economists were expecting a gain of 0.1 percent. Also on the economic front, the University of Michigan will report its final reading for consumer sentiment in May at 9:55 A.M. ET. Economists have forecast the index to remain unchanged at 83.7.
European markets in the red: European markets fell in trade following some weak economic data from the region. Euro zone unemployment rose to 12.2 percent in April, up from 12.1 percent in the previous month. In other economic news, German retail sales dropped 0.4 percent in April, missing expectations for a 0.4 percent improvement. The DAX (INDEXDB:DAX) slid 0.6 percent to 8349.51. The FTSE 100 (INDEXFTSE:UKX) lost 0.9 percent, while the CAC 40 (INDEXEURO:PX1) dipped 0.7 percent to 3968.94 points. The euro zone blue-chip ESTX 50 PR.EUR (INDEXSTOXX:SX5E) (Euro Stoxx 50) is down 0.6 percent.
Asian markets end lower; Nikkei jumps over 1 percent: The NIKKEI 225 (INDEXNIKKEI:NI225) gained more than a percent to recover some of yesterday’s steep losses after data showed Japanese industrial production rose 1.7 percent in April from a year earlier. The SSE Composite Index (SHA:000001) (Shanghai Composite Index) gave up gains made earlier in the session to end lower as investors remained caution ahead of China’s official purchasing manager’s index for May, due for release on Saturday. The S&P/ASX 200 (INDEXASX:XJO) index closed 0.1 percent lower, and was the worst regional performer in May, down 4.7 percent.
Stocks in News:
Dell Inc. (NASDAQ:DELL)
The board of Dell Inc. (NASDAQ:DELL) has unanimously recommended that shareholders vote for the $24.4 billion buyout offer led by CEO Michael Dell, saying that it was superior to other strategic options. Dell urged shareholders to accept the offer after no better offer came during the “go-shop” period, according to a SEC filing. Last month, billionaire investor Carl Icahn and Southeastern Asset Management, two of Dell’s largest shareholders, had launched a $21 billion counter offer.
Intel Corporation (NASDAQ:INTC)
Intel Corporation (NASDAQ:INTC) will provide the processor for a new version of Samsung’s Android Galaxy Tablet, Reuters reported early Friday. Samsung will use Intel’s Clover Trail+ mobile chip for its next GALAXY Tab 3 10.1. Samsung has previously used chips designed by UK’s ARM Holdings plc (ADR) (NASDAQ:ARMH) for its best-selling Android devices.
Lions Gate Entertainment Corp. (USA) (NYSE:LGF)
Lions Gate Entertainment Corp. (USA) (NYSE:LGF) posted better than expected fourth quarter profit amid strong home-video sales of its “Twilight” movie series. Excluding one-time items, earnings stood at 51 cents a share, 7 cents above the average analysts’ estimate. Revenue jumped 22 percent to $785.7 million, also topping expectations for $753 million. Shares soared in pre-market trading.
The Boeing Company (NYSE:BA)
The Boeing Company (NYSE:BA) has secured an order for 60 737 MAX aircrafts from British tour operator TUI Travel PLC (LON:TT). The deal is worth $6.1 billion at list prices, and the jets are expected to be delivered between January 2018 and March 2023. The 737 MAX is Boeing’s latest narrow-body plane and directly competes with the A320neo made by European rival Airbus.
Guess?, Inc. (NYSE:GES)
Guess?, Inc. (NYSE:GES) posted higher than expected first quarter profit, helped by strong sales in Asia. The apparel retailer earned 14 cents per share, excluding certain items, easily beating the consensus estimate of 8 cents per share. Sales fell 5 percent to $549 million, in line with expectations. For the current quarter, the company forecast earnings of 34 cents to 38 cents per share, on sales of $620 million to $635 million. Analysts were projecting per-share earnings of 36 cents on revenue of $618 million. Share rallied in pre-market trading.
American Realty Capital Properties Inc (NASDAQ:ARCP), General Electric Company (NYSE:GE)
American Realty Capital Properties Inc (NASDAQ:ARCP) has agreed to buy an $807 million restaurant portfolio from GE Capital. The portfolio of 471 net lease properties consists mainly of assets leased to operators of restaurants such as IHOP, Jack in the Box, Burger King and Wendy’s. The real estate investment trust said the deal should help diversify its net-lease portfolio. Shares of American Realty Capital were inactive in pre-market trading.
Palo Alto Networks Inc (NYSE:PANW)
Security software maker Palo Alto Networks Inc (NYSE:PANW) earned 6 cents per share, excluding items, for its third quarter, a penny above the consensus estimates. Revenue came in at $101.3 million, missing estimates of $103.5 million. In addition, the company forecast weaker than expected current quarter results, sending shares lower in early morning trade.
American Eagle Outfitters (NYSE:AEO)
American Eagle Outfitters (NYSE:AEO) increased its quarterly dividend by 14 percent to 12.5 cents a share, payable on July 12 to shareholders of record as of July 1. The just-declared dividend was the apparel retailer’s 36th consecutive quarterly payout. Shares were largely unchanged in early-hours trading.
Krispy Kreme Doughnuts (NYSE:KKD)
Krispy Kreme Doughnuts (NYSE:KKD) posted better than expected first quarter results, and raised its outlook for the year, sending shares higher in pre-open session. Excluding certain items, earnings came in at 20 cents a share, 4 cents above the average analysts’ estimate. Revenue rose 11 percent to $120.6 million, also topping expectations of $117 million. In addition, the doughnut chain forecast full-year adjusted earnings of between 59 cents and 63 cents per share, up from 53 cents to 57 cents per share it had projected earlier.
CVS Caremark Corporation (NYSE:CVS), Express Scripts Holding Company (NASDAQ:ESRX), Catamaran Corp (USA) (NASDAQ:CTRX)
Wells Fargo has begun coverage of CVS Caremark Corporation (NYSE:CVS) with an “outperform” rating. Analyst Peter Costa said CVS was better placed to face the rapid changes undergoing the retail pharma sector. The brokerage also initiated coverage of Express Scripts Holding Company (NASDAQ:ESRX) and Catamaran Corp (USA) (NASDAQ:CTRX) with a “market perform” recommendation. Shares of all three companies were largely unchanged in pre-market trading.
Economic Calendar for Friday, May 31, 2013:
08:30 A.M. ET: Personal Spending (April)
08:30 A.M. ET: Personal Income (MoM) (April)
08:45 A.M. ET: Cleveland Fed President Sandra Pianalto speaks.
09:45 A.M. ET: Chicago Purchasing Managers’ Index (May)
09:55 A.M. ET: Reuters/Michigan Consumer Sentiment Index (May)
03:00 P.M. ET: Farm Prices