Morning Market Update
Stocks that are expected to trade actively in U.S. markets on Wednesday include: Yum! Brands, Inc. (NYSE:YUM), Sprint Nextel Corporation (NYSE:S), DISH Network Corp (NASDAQ:DISH), Pfizer Inc. (NYSE:PFE), Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA), Ulta Salon, Cosmetics & Fragrance, Inc. (NASDAQ:ULTA), Rambus Inc. (NASDAQ:RMBS), Oxford Industries, Inc. (NYSE:OXM), Walgreen Company (NYSE:WAG), Cooper Tire & Rubber Company (NYSE:CTB), Liberty Global Inc. (NASDAQ:LBTYA) (NASDAQ:LBTYB) and Prudential Financial Inc (NYSE:PRU).
• US: Dow Futures: 15216.00 (0.52%), S&P 500 Futures: 1634.20 (0.44%), NASDAQ Futures: 2978.00 (0.49%)
• Europe: CAC: 3827.62 (0.45%), DAX: 8209.52 (-0.16%), FTSE: 6346.41 (0.10%)
• Asia-Pacific: Australia: 4724.50 (-0.69%), China: 2210.90 (0.00%), Hong Kong: 21354.66 (0.00%), Japan: 13289.32 (-0.21%).
• Metals: Gold: 1376.30 (-0.05%), Silver: 21.69 (0.20%), Copper: 3.22 (0.69%)
• Energy: Crude Oil: 95.44 (0.06%), Natural Gas: 3.74 (0.54%)
• Commodities: Corn: 5.48 (0.36%), Soya Bean: 13.26 (0.91%), Wheat: 6.92 (1.09%)
• Currency: EUR/USD: 1.3269 (-0.33%), GBP/USD: 1.5649 (0.02%), USD/JPY: 96.5800 (0.57%)
• 10 year US Treasury: 2.181% (-0.003)
Market and Economic News Update:
U.S. stock-index futures rise: U.S. stock-index futures are pointing to a higher open as the major averages look to rebound from yesterday’s deep looses. Wednesday will be a quiet day on the earnings and data releases front, with weekly crude inventories due at 10:30 A.M. ET, and the Treasury budget for May scheduled to be issued at 2:00 P.M. ET. In the bond markets, the U.S. Treasury will today auction 10-year notes, while the Federal Reserve will buy $750 million-$1 billion of 10-18 year notes.
European markets mostly higher: European markets gained in trade following better than expected industrial output figures from the euro zone. Data from the EU statistics agency Eurostat showed euro zone industrial output rose 0.4 percent in April, beating expectations of a flat to 0.1 percent rise. In other economic news, U.K. unemployment fell by 5,000 between February and April to 2.51 million, the Office for National Statistics said today. The DAX (INDEXDB:DAX) fell 0.2 percent, while the CAC 40 (INDEXEURO:PX1) and the FTSE 100 (INDEXFTSE:UKX) gained in trade. The euro zone blue-chip ESTX 50 PR.EUR (INDEXSTOXX:SX5E) (Euro Stoxx 50) added 0.2 percent.
Asian markets end lower: Asian stocks closed lower in a lackluster session on Wednesday, as markets in Hong Kong and China were shut for the Dragon Boat holidays. The NIKKEI 225 (INDEXNIKKEI:NI225) rebounded from lows made earlier in the day, but still closed in the negative territory. The S&P/ASX 200 (INDEXASX:XJO) index finished 0.7 percent lower as a drop in oil and metals prices hit resource stocks.
Stocks in News:
Yum! Brands, Inc. (NYSE:YUM)
Yum! Brands, Inc. (NYSE:YUM) said May same-store sales in China dropped 19 percent, largely due to weak performance at KFC. The fast food chain however expects sales trend to turn positive in the fourth quarter. Yum Brands generates more than half of its sales in China, and has nearly 5,300 KFC outlets in the country. Shares slipped in pre-open session.
Sprint Nextel Corporation (NYSE:S), DISH Network Corp (NASDAQ:DISH)
Institutional Shareholder Services has recommended that Sprint Nextel Corporation (NYSE:S) shareholders vote in favor of Softbank Corp (TYO:9984)’s revised offer. Softbank raised its offer for the U.S. wireless carrier to $21.6 billion from $20.1 billion to ward-off a counter bid by DISH Network Corp (NASDAQ:DISH). Shares of Sprint gained before markets opened on Wednesday.
Pfizer Inc. (NYSE:PFE), Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA)
Pfizer Inc. (NYSE:PFE) has reached a $2.15 billion settlement with Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) and Sun Pharmaceutical Industries Limited (NSE:SUNPHARMA) over the sale of generic Protonix in the U.S. Under the terms of the settlement, Pfizer will receive 64 percent or about $1.4 billion, while partner Takeda Pharmaceutical Co. Ltd. will get the rest. Pfizer’s shares traded higher in pre-market trading following the announcement.
Ulta Salon, Cosmetics & Fragrance, Inc. (NASDAQ:ULTA)
Ulta Salon, Cosmetics & Fragrance, Inc. (NASDAQ:ULTA) posted better than expected first quarter results, helped by new store openings and rising same-store sales. Earnings stood at 65 cents a share, 3 cents above the average analysts’ estimate, on sales of $583 million that also beat expectations for $576 million. Shares gained in early trade despite the beauty store chain handing current-quarter guidance that were below Street forecasts.
Rambus Inc. (NSDAQ:RMBS)
Rambus Inc. (NASDAQ:RMBS) has settled a long-standing patent dispute with South Korea’s SK Hynix. Hynix will pay $240 million over the next five years to settle the dispute over memory-chip technology that has dragged on since 2000. As part of the patent license agreement, all outstanding claims between the two companies will also be settled, Rambus said.
Oxford Industries, Inc. (NYSE:OXM)
Oxford Industries, Inc. (NYSE:OXM) reported first quarter adjusted earnings of 82 cents a share, edging past expectations by a nickel. Revenue came in slightly lighter than expected at $234 million, trailing estimates for $237 million. In addition, the high-end clothing retailer forecast current quarter earnings of between 92 cents a share and $1.02 a share, against expectations for 95 cents a share. Shares closed Tuesday at $64.45, and were flat in pre-market trading.
Walgreen Company (NYSE:WAG)
Walgreen Company (NYSE:WAG) has agreed to pay $80 million to settle U.S. Drug Enforcement Administration charges involving its distribution of prescription painkillers. As part of the settlement, Walgreen admitted it failed to uphold its obligations as a DEA registrant, which requires the company to flag suspicious sales of prescription painkillers, such as oxycodone.
Cooper Tire & Rubber Company (NYSE:CTB)
Cooper Tire & Rubber Company (NYSE:CTB) has agreed to be acquired by India’s Apollo Tyres Limited (NSE:APOLLOTYRE) for about $2.5 billion in cash. Apollo’s offer of $35 a share represents a 43 percent premium to Cooper’s Tuesday closing price on the New York Stock Exchange. The deal is expected to be completed in the second half of the year.
Liberty Global Inc. (NASDAQ:LBTYA) (NASDAQ: LBTYB)
Liberty Global Inc. (NASDAQ:LBTYA) (NASDAQ:LBTYB) has approved a $3.5 billion stock-buyback program, as the company looks to reward shareholders following its multibillion-dollar acquisition of Virgin Media. The new buyback program will replace the previous $1 billion repurchase program that was announced in December. Class A shares of Liberty Global closed Tuesday at $73.15 and were inactive premarket.
Prudential Financial Inc (NYSE:PRU)
Prudential Financial Inc (NYSE:PRU) announced a $1 billion share buyback program, sending shares higher in early hours trading. The executive management of the company will decide the size and timing of its share repurchases, Prudential said in a statement. Separately, the insurer promoted Susan Blount to executive vice president.
Economic Calendar for Wednesday, June 12, 2013:
07:00 A.M. ET: MBA Mortgage Applications (June 07)
10:30 A.M. ET: EIA Petroleum Status Report (June 07)
01:00 P.M. ET: 10-Year Note Auction
02:00 P.M. ET: Monthly Budget Statement (May)