Euro-zone Economy Shrinks 0.3% in Q4: Morning Market Update

Euro-zone Economy Shrinks 0.3% in Q4: Morning Market Update
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Euro-zone Economy Shrinks 0.3% in Q4: Morning Market Update

Every morning ValueWalk puts out a news report with the latest news in global stock markets, company news, and global economic news.

Market Action

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  • US:  Dow Futures: 12880.00 (-0.62%), S&P 500 Futures: 1353.83 (-0.78%), NASDAQ Futures: 2594.50 (-0.82%)
  • Europe: CAC: 3413.20 (-2.18%), DAX: 6715.52 (-2.25%), FTSE: 5798.77 (-1.31%).
  • Asia-Pacific: Australia: 4204.70 (-1.37%), China: 2410.45 (-1.43%), Hong Kong: 20806.25 (-2.21%), India: 5222.40 (-1.10%), Japan: 9637.63 (-0.63%)
  • Metals: Gold: 1683.30 (-1.21%), Silver: 33.36 (-1.29%), Copper: 3.76 (-2.58%)
  • Energy: Crude Oil: 105.62 (-1.03%), Natural Gas: 2.37 (0.81%)
  • Commodities: Corn: 6.53 (1.11%), Soya Bean: 13.21 (-0.41%), Wheat: 6.60 (-0.30%)
  • Currency: EUR/USD: 1.3126 (-0.6840%), GBP/USD: 1.5774 (-0.5756%), USD/JPY: 80.9220 (-0.7813%)
  • 10 year US Treasury: 1.981% (0.028)


Market News Update


 sed to open lower: U.S. markets were poised to open lower on Tuesday, as world markets sold off amid economic growth worries in China and Europe. About 90 minutes before the opening bell, Dow Jones Industrial Average futures dropped 86 points, or 0.7%, to 12875. Standard & Poor’s 500-stock index futures declined 11 points, or 0.8%, to 1354 and NASDAQ 100 futures shed 19 points, or 0.7%, to 2597.


European stocks decline: European stocks fell as a report confirmed a contraction in the euro-area economy and as investors weighed Greece’s chances of avoiding a default by getting private creditors to accept a debt swap. The Stoxx Europe 600 (SXXP) Index declined 1.3 percent to 262.01 at 11:34 a.m. in London.


Euro-zone economy shrinks in fourth quarter: Output in the 17 countries sharing the euro shrank 0.3 percent in October to December from the third quarter, the European Union’s statistics office Eurostat said, confirming an earlier estimate released last month. A collapse in household spending, exports and manufacturing sucked the life out of the euro zone’s economy in the final months of 2011, the EU said on Tuesday.



Asia ends in the red: Asian shares ended lower on Tuesday as renewed fears of a recession in Europe and a slowdown in growth in resource-hungry China halted a stock market rally. Japan’s Nikkei slipped for a second day as investors bagged profits on blue chip stocks following February’s 10.5 percent rally, although some attractive valuations and a softer yen supported sentiment. The Shanghai Composite closed at 2,410.4 points, extending a 0.6 percent decline on Monday. Hong Kong shares fell as investors took profits in the financials and growth-sensitive sectors.


Crude futures down in New York trading: Crude futures dropped in New York amid concern that slowing global growth will curb fuel demand after Europe’s economy contracted in the fourth quarter. Crude for April delivery declined as much as 0.9 percent, or 91 cents, to $105.81 a barrel in electronic trading on the New York Mercantile Exchange and was at $106.22. Brent oil for April settlement on the ICE Futures Europe exchange in London was at $123.20 a barrel, down 60 cents.




Company News Update


  • Qualcomm Inc. (QCOM), the world’s biggest maker of mobile-phone chips, said it plans to buy back as much as $4 billion of shares and raise its dividend by 16 percent to return cash to shareholders as earnings increase.
  • Shares in AIA Group Ltd had their second-biggest one-day percentage fall on Tuesday after its former parent, American International Group (AIG), raised about $6 billion by selling shares at the bottom end of the marketing range.
  • Bank of America (BAC) earnings estimates have been shrinking, a trend that is likely to continue to be a drag on the stock, argues a report from Stifel Nicolaus published Monday. The Bank of America consensus estimate from First Call for 2013 has fallen to $1.05 from $1.26 at the start of the year, while Stifel’s estimate has also dropped to 80 cents.
  • Fresh off hitting a $200 mark earlier on Monday, an all-time intraday high for the company, International Business Machines (IBM) could continue its momentum and reach a higher price target by 2013, according to Barclays Capital technology hardware analyst Ben Reitzes.
  • Merck & Co. (MRK), the second-largest U.S. drugmaker, forecast first-quarter profit that falls below analysts’ estimates. First quarter adjusted profit will be 95 cents to 98 cents a share, the Whitehouse Station, New Jersey-based company said today in a statement. That compares with analysts’ estimates of $1.01 a share. The company reaffirmed its 2012 full year adjusted profit of $3.75 to $3.85 a share.
  •  Monster Worldwide Inc. (MWW), the online recruiting service hired Stone Key Partners LLC and Bank of America Corp.’s Merrill Lynch to help it review strategic alternatives.
  • Chesapeake Energy Corp. (CHK) announced a $250 million partnership Tuesday with private-equity firm KKR & Co. (KKR) to invest in U.S. oil and gas fields as the energy producer continues its frenetic deal-making. Activision Blizzard Inc. (ATVI), the largest video-game maker hired Dennis Durkin, who had been an executive in Microsoft Corp.’s Interactive Entertainment Business, to fill its open chief financial officer position.
  • VeriFone Systems Inc. (PAY), the largest maker of credit-card terminals forecast 2012 earnings may be as much as $2.66 a share excluding some items, compared with the average analyst projection of $2.60 a share.
  • French carmaker PSA Peugeot Citroen announced the terms of a 1 billion euro ($1.3 billion) share sale to fund its alliance with U.S. peer General Motors, offering a big discount to draw in funds for overseas expansion and new models.
  • RWE AG (RWE), Germany’s second-largest utility, said full-year profit dropped 34 percent, weighed down by the cost of phasing out nuclear power and losses at its natural-gas supply business.
  • Alcatel-Lucent (ALU), the Paris-based networking-equipment maker, is focusing on innovation and is no longer on a financial precipice, Chief Executive Officer Ben Verwaayen said. The company, entering its fourth year under Verwaayen, has struggled with spending pullbacks by large telephone companies and increased competition from China-based rivals Huawei Technologies Co. and ZTE Corp. (000063)
  •  Toyota Motor Corp. (JDCSTYTA), seeking record U.S. Prius sales in 2012, said increased supply of the hybrid helped the automaker beat analysts’ estimates for February sales and will buoy gains in March amid rising fuel prices.
  • Hitachi (6501) Ltd., Japan’s second-largest manufacturer, sold its entire 4.7 percent stake in Elpida Memory Inc. whose stock will be delisted in less than a month after filing for bankruptcy.
  • The biggest Japanese iron ore supplier, Mitsui & Co. (8031), holding a record $17 billion in cash, wants to buy mining stakes and expand operations to triple copper output and more than double coal production, easing its reliance on iron ore sales.
  • All Nippon Airways Co. (9202) may expand a venture with Deutsche Lufthansa AG (LHA) after greater cooperation with partners helped the Japanese carrier double transfer passengers at its main international hub.


Economic Calendar for Tuesday, March 06, 2012:


07:45 A.M. ET:    ICSC-Goldman Store Sales

08:55 A.M. ET:    Redbook

11:30 A.M. ET:    4-Week Bill Auction

11:30 A.M. ET:    52-Week Bill Auction

03:00 P.M. ET:    Treasury STRIPS (for February 2012)

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