Morning Market Update
Stocks that are expected to trade actively in U.S. markets on Thursday include: Wal-Mart Stores, Inc. (NYSE:WMT), Cisco Systems, Inc. (NASDAQ:CSCO), Tesla Motors Inc (NASDAQ:TSLA), Kohl’s Corporation (NYSE:KSS), The Dow Chemical Company (NYSE:DOW), The Boeing Company (NYSE:BA), General Electric Company (NYSE:GE), Jack in the Box Inc. (NASDAQ:JACK), Chevron Corporation (NYSE:CVX), Skechers USA Inc (NYSE:SKX), DDR Corp (NYSE:DDR), The Blackstone Group L.P. (NYSE:BX) and Potash Corp./ Saskatchewan (USA) (NYSE:POT).
Market Levels
• US: Dow Futures: 15228.00 (-0.05%), S&P 500 Futures: 1652.80 (-0.09%), NASDAQ Futures: 3004.00 (0.10%)
• Europe: CAC: 3964.79 (-0.44%), DAX: 8358.64 (-0.05%), FTSE: 6697.71 (0.06%)
• Asia-Pacific: Australia: 5165.70 (-0.50%), China: 2251.81 (1.20%), Hong Kong: 23082.68 (0.17%), Japan: 15037.24 (-0.39%).
• Metals: Gold: 1374.50 (-1.55%), Silver: 22.31 (-1.54%), Copper: 3.26 (-0.09%)
• Energy: Crude Oil: 94.24 (-0.06%), Natural Gas: 4.07 (-0.10%)
• Commodities: Corn: 6.49 (-0.31%), Soya Bean: 14.015 (-0.04%), Wheat: 6.96 (-2.39%)
• Currency: EUR/USD: 1.2899 (0.09%), GBP/USD: 1.5262 (0.18%), USD/JPY: 102.3300 (0.08%)
• 10 year US Treasury: 1.907% (-0.028)
Market and Economic News Update
U.S. stock-index futures mostly decline: U.S. stock-index futures are pointing to a lower open on Thursday as data showed jobless claims jumped to a six-week high and housing starts hit a five-month low. Weekly jobless claims increased by 32,000 to a seasonally adjusted 360,000, the Labor Department said today. Economists were expecting a rise to 330,000. Meanwhile, housing starts dropped 16.5 percent in April to a 853,000-unit annual rate, well below what economists had projected. Dell Inc. (NASDAQ:DELL) and J. C. Penney Companies, Inc. (NYSE:JCP) will report quarterly results after the close of trading.
European markets flat: European markets are largely unchanged in trade, as investors took a breather following recent gains. On the economic front, euro zone consumer price inflation dropped 1.2 percent on an annual basis in April, down from 1.7 percent in March, according to official statistics released on Thursday. The DAX (INDEXDB:DAX) and the FTSE 100 (INDEXFTSE:UKX) are flat in trade, while the CAC 40 (INDEXEURO:PX1) fell 0.4 percent to 3964.79 points. The euro zone blue-chip ESTX 50 PR.EUR (INDEXSTOXX:SX5E) (Euro Stoxx 50) lost 0.2 percent.
Asian markets end mixed: Asian stocks closed mixed, with the NIKKEI 225 (INDEXNIKKEI:NI225) finishing above 15,000 after sliding as much as 1 percent during the session, amid a firmer yen. The SSE Composite Index (SHA:000001) (Shanghai Composite Index) rallied more than a percent to close at a one-week high, while the HANG SENG INDEX (INDEXHANGSENG:HIS) added 0.2 percent. The S&P/ASX 200 (INDEXASX:XJO) index closed down 0.5 percent, with mining stocks extending their losses.
Stocks in News
Wal-Mart Stores, Inc. (NYSE:WMT)
Wal-Mart Stores, Inc. (NYSE:WMT)’s fiscal first-quarter earnings rose 1.1 percent, but same-store sales missed expectations, sending shares lower in pre-open session. First quarter profit stood at $1.14 per share, one cent shy of estimates, on revenue of $114.2 billion that also fell short of consensus. The world’s largest retailer forecast current-quarter profit of $1.22 to $1.27 a share, below the $1.29 per-share profit that analysts are expecting.
Cisco Systems, Inc. (NASDAQ:CSCO)
Cisco Systems, Inc. (NASDAQ:CSCO) reported better than expected quarterly profit amid revenue growth at all four of its divisions. Excluding one-time items, third quarter earnings came in at 51 cents a share, edging past expectations for 49 cents a share. Revenue climbed 5 percent to $12.22 billion, also topping estimates of $12.18 billion. For the current quarter, the networking equipment maker expects earnings of between 50 cents a share and 52 cents a share compared to projections of 51 cents a share. Shares soared in early trade.
Tesla Motors Inc (NASDAQ:TSLA)
Tesla Motors Inc (NASDAQ:TSLA) plans to raise as much as $830 million through a stock and debt offering to prepay a loan from the US Department of Energy. The electric car-maker said it will offer 2.7 million shares of its common stock and $450 million in convertible senior notes. CEO and co-founder Elon Musk will personally buy shares worth $100 million as part of this latest fundraising drive. Shares rallied in pre-market trading.
Kohl’s Corporation (NYSE:KSS)
Kohl’s Corporation (NYSE:KSS) reported better than expected quarterly profit amid higher margins, sending shares higher in pre-market trading. The department store chain earned 66 cents per share for the first quarter, ten cents above the consensus estimate, while revenues fell short of projections. For the current quarter, the company expects to earn between $1.00 and $1.08 per share, and forecast total sales growth of 1 to 3 percent, compared to expectations for per-share profit of $1.05, on revenue growth of 3 percent.
The Dow Chemical Company (NYSE:DOW)
The Dow Chemical Company (NYSE:DOW) has been ordered by a federal judge in Kansas City to pay $1.2 billion in a urethane price-fixing case. In a class action lawsuit started in 2005, Dow is accused of conspiring with BASF SE (ETR:BAS) (FRA:BAS), Huntsman International LLC and Lyondell Chemical Co. to fix prices of urethane in violation of federal law. Except Dow, all other defendants settled without admitting any wrongdoing.
The Boeing Company (NYSE:BA), General Electric Company (NYSE:GE)
The Boeing Company (NYSE:BA) and General Electric Company (NYSE:GE) have told airlines to inspect and possibly replace the engines on some Boeing 777 long-range jumbo jets because of a potential engine-manufacturing defect. The 777 jets are equipped with GE engines, and the problem may affect about 118 gearboxes manufactured between September 2012 and March 2013, the companies said on Wednesday.
Jack in the Box Inc. (NASDAQ:JACK)
Fast food chain Jack in the Box Inc. (NASDAQ:JACK) reported second quarter profit of 29 cents a share on sales of $356 million, trailing expectations for 31 cents a share on revenue of $359 million. In addition, the company forecast full-year earnings of between $1.55 a share and $1.65 a share, in line with estimates of $1.61 a share. Shares slipped in pre-open session.
Chevron Corporation (NYSE:CVX)
Chevron Corporation (NYSE:CVX) has reached an agreement with Argentine energy company YPF SA (ADR) (NYSE:YPF) on the commercial terms and conditions of its $1.5 billion investment in the Vaca Muerta shale formation. The joint pilot program will include the drilling of about 132 non-conventional oil wells over the next 12 months, YPF said. Chevron is the first major foreign oil company to partner YPF since it was re-nationalized last year.
Skechers USA Inc (NYSE:SKX)
Skechers USA Inc (NYSE:SKX) swung to a first quarter profit, helped by strong demand for its performance footwear. The company posted earnings of 13 cents a share, trailing expectations by a nickel a share, on revenue of $452 million that easily beat estimates of $444 million. In addition, the shoe company said third quarter growth should be “significantly stronger” than the current quarter, sending shares higher in early-hours trading.
DDR Corp (NYSE:DDR), The Blackstone Group L.P. (NYSE:BX)
Real estate investment trust DDR Corp (NYSE:DDR) will buy The Blackstone Group L.P. (NYSE:BX)’s stake in a portfolio of shopping centers operated under a joint venture between the two companies for $1.46 billion. Under the proposed deal, expected to close in the fourth quarter, DDR will acquire Blackstone Real Estate Partners VII’s 95 percent equity ownership in 30 of the 44 shopping centers.
Potash Corp./ Saskatchewan (USA) (NYSE:POT)
Potash Corp./ Saskatchewan (USA) (NYSE:POT) has raised its quarterly cash dividend by 25 percent to 35 cents per share, payable on August 2, to shareholders of record as of July 12. The fertilizer company will return cash to shareholders as it winds down a 10-year expansion of its Canadian potash mines. Shares closed Wednesday up 0.7 percent at $43.38 in New York trading.
Economic Calendar for Thursday, May 16, 2013:
07:45 A.M. ET: Boston Federal Reserve Bank President Eric Rosengren speaks.
08:30 A.M. ET: Initial Jobless Claims (Week ending Friday, May 10)
08:30 A.M. ET: Continuing Jobless Claims (Week ending Friday, May 04)
08:30 A.M. ET: Housing Starts (MoM) (April)
08:30 A.M. ET: Building Permits (MoM) (April)
08:30 A.M. ET: Consumer Price Index (MoM) (April)
08:30 A.M. ET: Consumer Price Index (YoY) (April)
08:30 A.M. ET: Consumer Price Index ex-Food & Energy (MoM) (April)
08:30 A.M. ET: Consumer Price Index ex-Food & Energy (YoY) (April)
09:00 A.M. ET: Dallas Federal Reserve Bank President Richard Fisher speaks.
10:00 A.M. ET: Philadelphia Fed Manufacturing Survey (May)
10:30 A.M. ET: EIA Natural Gas Report (Week ending Friday, May 10)
02:30 P.M. ET: San Francisco Fed President John Williams speaks.
04:30 P.M. ET: Fed Balance Sheet
04:30 P.M. ET: Money Supply
