Morning Market Update
Stocks that are expected to trade actively in U.S. markets on Friday include: Dell Inc. (NASDAQ:DELL), J. C. Penney Companies, Inc. (NYSE:JCP), Yahoo! Inc. (NASDAQ:YHOO), Kansas City Southern (NYSE:KSU), Dean Foods Co (NYSE:DF), WhiteWave Foods Co (NYSE:WWAV), Nordstrom, Inc. (NYSE:JWN), Northrop Grumman Corporation (NYSE:NOC), Applied Materials, Inc. (NASDAQ:AMAT), Williams Companies, Inc. (NYSE:WMB), Autodesk, Inc. (NASDAQ:ADSK), Compuware Corporation (NASDAQ:CPWR), Electronic Arts Inc. (NASDAQ:EA) and Activision Blizzard, Inc. (NASDAQ:ATVI).
Market Levels
• US: Dow Futures: 15255.00 (0.28%), S&P 500 Futures: 1653.30 (0.32%), NASDAQ Futures: 3006.50 (0.28%)
• Europe: CAC: 3998.92 (0.50%), DAX: 8396.85 (0.32%), FTSE: 6712.72 (0.37%)
• Asia-Pacific: Australia: 5180.80 (0.29%), China: 2282.87 (1.36%), Hong Kong: 23082.68 (0.00%), Japan: 15138.12 (0.67%).
• Metals: Gold: 1374.70 (-0.88%), Silver: 22.44 (-0.97%), Copper: 3.33 (1.17%)
• Energy: Crude Oil: 95.82 (0.69%), Natural Gas: 3.97 (0.89%)
• Commodities: Corn: 6.40 (-1.35%), Soya Bean: 14.30 (1.06%), Wheat: 6.82 (-1.72%)
• Currency: EUR/USD: 1.2829 (-0.41%), GBP/USD: 1.5206 (-0.42%), USD/JPY: 102.5800 (0.31%)
• 10 year US Treasury: 1.884% (0.004)
Market and Economic News Update
U.S. stock-index futures gain: U.S. stock-index futures are pointing to a higher open on Friday, as investors await data on consumer sentiment and leading economic indicators. The University of Michigan and Thomson Reuters consumer sentiment report is expected to rise to 78.0, while the Conference Board’s leading indicators is expected to show a gain of 0.2 percent for April. Minneapolis Federal Reserve President Narayana Kocherlakota’s speech, due at 01:45 P.M. Eastern Time, will be closely watched, after Thursday’s comments by the Fed’s John Williams and Charles Plosser suggested they were both open to reducing bond purchases if the economy continued to improve.
European markets rise: European markets are up in trade, helped by a rally in banking stocks, after UBS AG raised the European banking sector to small overweight from small underweight. The DAX (INDEXDB:DAX) was well on track to close at an all-time, up 0.3 percent at 8396.85. The FTSE 100 (INDEXFTSE:UKX) added 0.4 percent to 6712.72, while the CAC 40 (INDEXEURO:PX1) gained 0.5 percent to 3998.92 points. The euro zone blue-chip ESTX 50 PR.EUR (INDEXSTOXX:SX5E) (Euro Stoxx 50) edged 0.3 percent higher.
Asian markets end higher: Asian stocks closed higher in a light session on Friday, with financial markets in Hong Kong and South Korea closed for public holidays. The NIKKEI 225 (INDEXNIKKEI:NI225) rebounded from lows made earlier in the session to close above the 15,000 mark. The SSE Composite Index (SHA:000001) (Shanghai Composite Index) finished at a seven-week high, helped by a rally in real estate stocks. The S&P/ASX 200 (INDEXASX:XJO) index gained 0.4 percent, as mining stocks reversed their earlier losses after the Australian dollar hit a new 11-month low.
Stocks in News
Dell Inc. (NASDAQ:DELL)
Dell Inc. (NASDAQ:DELL) reported a 79 percent plunge in first quarter profit, as the consumer shift to smart phones and tablets reduced demand for the company’s desktops and laptops. Excluding one-time items, earnings were 21 cents a share, much below the average analysts’ estimate of 35 cents a share. Revenue fell 2 percent to $14.07 billion from $14.42 billion a year ago, also trailing expectations of $13.50 billion. PC and computing unit sales declined 9 percent, while enterprise solutions sales rose 12 percent. Shares were largely unchanged in extended-hours trading.
J. C. Penney Companies, Inc. (NYSE:JCP)
J. C. Penney Companies, Inc. (NYSE:JCP) reported first quarter loss excluding one-time items of $1.31 a share, on revenue of $2.64 billion, missing Wall Street estimates for a loss of 89 cents a share on sales of $2.74 billion. Same-store sales fell 16.6 percent during the period. This is J. C. Penney Companies, Inc. (NYSE:JCP)’s first quarterly report following the ouster of former Chief Executive Ron Johnson.
Yahoo! Inc. (NASDAQ:YHOO)
Yahoo! Inc. (NASDAQ:YHOO) is in talks to acquire social blogging site Tumblr in a deal worth as much as $1 billion, according to AllThingsD. Tumblr, founded in 2007, allows users to share photos, videos, links and other content, and is said to have 117 million visitors a month. The report claims that Yahoo is looking at Tumblr to attract younger audiences that the company currently lacks.
Kansas City Southern (NYSE:KSU), Dean Foods Co (NYSE:DF), WhiteWave Foods Co (NYSE:WWAV)
Railroad operator Kansas City Southern (NYSE:KSU) will replace Dean Foods Co (NYSE:DF) in the S&P 500, effective after the close of trade on May 23. Dean Foods has spun-off of its organic and soy business as WhiteWave Foods Co (NYSE:WWAV). Dean Foods Co. and WhiteWave Foods Co. will both be added to the S&P MidCap 400 Index. Dean Foods will replace Kansas City Southern, while WhiteWave Foods will take the place of natural gas producer Quicksilver Resources Inc (NYSE:KWK), S&P Dow Jones said in a statement.
Nordstrom, Inc. (NYSE:JWN)
Nordstrom, Inc. (NYSE:JWN) reported weak first quarter results, and lowered its full-year sales outlook, sending shares down more than 3 percent in pre-market trading. The luxury retailer posted earnings of 73 cents a share on revenue of $2.75 billion, trailing estimates of 76 cents a share on sales of $2.81 billion. For the fiscal year, Nordstrom reiterated its earnings guidance of between $3.65 a share and $3.80 a share, but slashed its same-store sales estimate by half a percentage point.
Northrop Grumman Corporation (NYSE:NOC)
Northrop Grumman Corporation (NYSE:NOC) said its board has approved an additional $4 billion in share repurchases, and it plans to buy back 25 percent of its shares by the end of 2015. The latest authorization increased the total buyback program to about $5 billion. The defense contractor said the moves were part of continued efforts to boost shareholder return. Northrop shares were 48 cents higher at $79.50 in pre-market trading.
Applied Materials, Inc. (NASDAQ:AMAT)
Applied Materials, Inc. (NASDAQ:AMAT) swung to a second-quarter loss, hurt by weakness in the solar-panel market. Excluding items, earnings came in at 16 cents a share, 3 cents above the consensus estimate. Sales fell 22 percent to $1.97 billion, but managed to edge past Street expectations for $1.91 billion. The semiconductor company forecast current-quarter profit and sales that may fall short of some analysts’ estimates. Shares fell in pre-open trading.
Williams Companies, Inc. (NYSE:WMB)
Williams Companies, Inc. (NYSE:WMB) raised its quarterly dividend by 4 percent to 35.25 cents a share from 33.88 cents a share. The dividend is payable June 24, to shareholders on record June 7. The energy company also reaffirmed its guidance for 20 percent annual dividend growth in 2013, 2014 and 2015, respectively. Shares gained following the announcements.
Autodesk, Inc. (NASDAQ:ADSK)
Autodesk, Inc. (NASDAQ:ADSK) reported first quarter earnings excluding one-time items of 42 cents a share, on revenue of $570, missing projections for 45 cents a share on sales of $583 million. In addition, the software company provided current-quarter earnings and sales outlook that disappointed analysts. Shares closed Thursday at $39.78, and plunged in early morning trade.
Compuware Corporation (NASDAQ:CPWR)
Compuware Corporation (NASDAQ:CPWR) declared its first quarterly dividend of 12.5 cents a share, sending shares higher in pre-market trading. The dividend is payable May 16, to shareholders of record on June 5. This week saw analysts at Jefferies Group and UBS AG reiterate their “buy” rating on the stock, with a common target price of $12.
Electronic Arts Inc. (NASDAQ:EA), Activision Blizzard, Inc. (NASDAQ:ATVI)
Videogame stocks, including Electronic Arts Inc. (NASDAQ:EA) and Activision Blizzard, Inc. (NASDAQ:ATVI) could be in focus today after market research firm NPD Group said sales of new videogame products in U.S. retail stores fell 25 percent in April to $495.2 million, from $657.5 million in the same period last year. Software sales for current generation consoles dropped 17 percent to $267.8 million, while hardware sales suffered the worst contraction, plunging 42 percent to $109.5 million from $187.8 million, a year earlier.
Economic Calendar for Friday, May 17, 2013:
09:55 A.M. ET: Reuters/Michigan Consumer Sentiment Index (May)
10:00 A.M. ET: Leading Indicator (MoM) (April)
01:45 P.M. ET: Minneapolis Fed President Narayana Kocherlakota speaks.
