Morning Market Update
- US: Dow Futures: 12570.00 (-1.59%), S&P 500 Futures: 1338.20 (-1.47%), NASDAQ Futures: 2581.00 (-1.23%)
- Europe: CAC: 3101.02 (-2.99%), DAX: 6399.42 (-3.60%), FTSE: 5512.33 (-2.53%)
- Asia-Pacific: Australia: 4128.90 (-1.67%), China: 2141.40 (-1.27%), Hong Kong: 19053.47 (-3.08%), India: 5117.95 (-1.67%), Japan: 8508.32 (-1.90%).
- Metals: Gold: 1565.60 (-1.09%), Silver: 26.78 (-1.93%), Copper: 3.35 (-2.84%)
- Energy: Crude Oil: 88.23 (-3.92%), Natural Gas: 3.01 (-2.21%)
- Commodities: Corn: 7.82 (1.79%), Soya Bean: 16.49 (2.18%), Wheat: 9.27 (2.15%)
- Currency: EUR/USD: 1.2086 (-0.59%), GBP/USD: 1.5498 (-0.79%), USD/JPY: 78.2100 (-0.34%)
- 10 year US Treasury: 1.409% (-0.047)
Financial and Economic News Update
U.S. stock-index futures trading significantly lower: U.S. stock index futures are pointing to a sharply lower open on Monday amid investor concerns that Greece will leave the euro zone, and Spain will need a sovereign bailout. The Dow futures, the S&P futures and the NASDAQ future are all trading close to a percent and half loweEuropean markets deep in the red: European markets witnessed a broad sell-off in trade today, with the German DAX (INDEXDB:DAX) trading 3.6 percent lower at 6399.42, the FTSE 100 (INDEXFTSE:UKX) sliding 2.5 percent to 5512.33, and the CAC 40 (INDEXEURO:PX1) tanking 3 percent to 3101.02. The euro zone blue-chip ESTX 50 PR.EUR (INDEXSTOXX:SX5E) (Euro Stoxx 50) was down 2.7 percent.
Asian markets end lower: Asian markets closed lower on Monday with Japan’s NIKKEI 225 (INDEXNIKKEI:NI225) shedding 1.9 percent to 8,508.32. The HANG SENG INDEX (INDEXHANGSENG:HSI) closed down 3 percent at 19,053.5, while the SSE Composite Index (SHA:000001) (Shanghai Composite Index) ended down 1.3 percent at 2,141.4. The S&P/ASX 200 (INDEXASX:XJO) index dropped 70.2 points or 1.7 percent to 4,128.9. The benchmark Indian 30-share BSE SENSITIVE (INDEXBOM:SENSEX) index fell 1.64 percent to 16,877.35 points.
Stocks in Focus
McDonald’s Corporation (NYSE:MCD) reported second quarter earnings, excluding certain items, of $1.32 per share, on revenue of $6.92 billion that trailed the average analysts’ estimate of earnings excluding items of $1.37 a share on $6.94 billion in revenue.
· Halliburton Company (NYSE:HAL) reported better than expected second quarter profit as an increase in drilling activity in its international markets offset a slowdown in North America. Earnings from continuing operations rose to $745 million, or 80 cents per share, from $739 million, or 80 cents per share, in the same quarter last year, while revenue increased 22 percent to $7.2 billion. Analysts were expecting a profit of 75 cents a share on revenue of $6.96 billion.
· Diversified manufacturer, Eaton Corporation (NYSE:ETN) reported second quarter earnings, excluding certain items of, $1.15 per share, six cents above estimates. Revenue, however, trailed expectations.
· Coca-Cola Enterprises Inc (NYSE:CCE) posted second quarter earnings, excluding certain items of 73 cents a share, in line with the analysts’ average estimate. Revenue declined 8.3 percent to $2.21 billion that missed Street estimates of $2.27 billion. The company also cut its full-year per-share earnings outlook.
· Toy maker Hasbro, Inc. (NASDAQ:HAS) said second-quarter profit fell 25 percent to $43.4 million, or 33 cents per share, from a year-ago profit of $58.1 million, or 42 cents per share, amid sagging sales in its U.S. and Canada markets.
· Petmed Express Inc (NASDAQ:PETS) reported first quarter earnings per share of 20 cents, three cents below estimates. Revenue for the quarter came in at $69 million that also trailed estimates.
· According to a regulatory filing, JPMorgan Chase & Co. (NYSE:JPM) chief executive, Jamie Dimon has increased his stake in the bank by 500,000 shares. The shares were purchased on Thursday and Friday at an average price of $34.14.
· Genesee & Wyoming Inc. (NYSE:GWR) has struck a deal to buy rival short-line railroad operator RailAmerica, Inc. (NYSE:RA) for $1.39 billion in cash, creating one of the biggest regional railroad operators in the United States.
· Prem Watsa’s Fairfax Financial Holdings Ltd. has almost doubled its stake in BlackBerry maker, Research In Motion Limited (USA) (NASDAQ:RIMM) (TSE:RIM).
· NRG Energy Inc. (NYSE:NRG) has agreed to buy Houston-based rival Genon Energy Inc (NYSE:GEN) for $1.7 billion in stock, to form the largest U.S. independent power producer.
· News Corp (NASDAQ:NWSA) chairman and chief executive officer, Rupert Murdoch, has resigned from three of the company’s boards.
· Marathon Oil Corporation (NYSE:MRO) has agreed to pay $35 million to Africa Oil Corporation for interests in two Kenyan projects.
· Pittsburgh-based specialty retailer, GNC Holdings Inc., said that president and chief executive, Joseph Fortunato has been elected as the chairperson of the board.
· Satellite imagery provider, GeoEye Inc. (NASDAQ:GEOY) has agreed to be acquired by rival DigitalGlobe Inc (NYSE:DGI) for about $900 million in cash and stock.
· Movie studio, Dreamworks Animation Skg Inc (NASDAQ:DWA), will buy entertainment company, Classic Media for $155 million. Classic Media has more than 450 family entertainment titles, which include “Casper” and “Rudolph the Red-Nosed Reindeer.”
· Teen retailer, The Wet Seal, Inc. (NASDAQ:WTSLA) has dismissed chief executive Susan McGalla, also said that adjusted loss is likely to be wider than previously forecast.
- Consumer electronics giant, Koninklijke Philips Electronics NV (ADR) (NYSE:PHG) (AMS:PHIA), reported better than expected second quarter profit and sales amid strong performance at its healthcare and lighting divisions. Net profit for the quarter stood at 167 million euros ($205.4 million) compared with a loss of 1.34 billion euros in the same period last year. Sales were up 5 percent to 5.892 billion euros.
- Swiss wealth manager, Julius Baer, posted first half net profit of 175.5 million Swiss francs ($177.82 million) that beat analysts’ forecasts. Assets under management stood at 178.8 billion francs on June 30, but revenue margins declined.
- Italian bank, Intesa Sanpaolo SpA (BIT:ISP) plunged 9 percent, while UniCredit SpA (BIT:UCG) tanked 6.7 percent, after trading in both the stocks was halted for close to an hour in morning trade.
- French carmaker, Peugeot SA (EPA:UG) will supply light commercial vehicles to Toyota Motor Corporation (ADR) (NYSE:TM) (TYO:7203), which it will sell under its own brand in Europe. The two companies also agreed to collaborate on future vehicles.
- Eurasian Natural Resources Corporation (LON:ENRC) is close to acquiring a 49.5 percent stake in a copper mine in Democratic Republic of Congo, according to a report in the Sunday Times.
- Dutch real estate company, Wereldhave NV (AMS:WHA) cut the value of its U.S. assets by 128 million euros ($155 million), leading to a drop in dividend target for the current year.
- Groupe Eurotunnel SA (EPA:GET), which operates the rail tunnels beneath the English Channel, sank 6 percent after reporting first half earnings that missed analyst estimates.
- London-listed African Barrick Gold PLC (LON:ABG), the largest producer of the metal in Tanzania, said second-quarter profit fell 57 percent to $29.9 million amid a decline in gold output and rise in costs.
- Analysts at Societe Generale SA downgraded Groupe Danone SA (EPA:BN), the world’s biggest yogurt maker, to “hold” from “buy.” The stock was trading 2.2 percent lower.
- Cnooc Limited (HKG:0883), China’s biggest offshore oil producer, has agreed to buy Canadian oil and gas producer, Nexen Inc. (USA) (NYSE:NXY) (TSE:NXY), for $15.1 billion in cash.
- An Australian judge overseeing the patent infringement dispute case between Apple Inc. (NASDAQ:AAPL) and Samsung Electronics in the country, said that the case might be best settled in mediation.
- Citic Securities Co Ltd (HKG:6030) (SHA:600030), China’s biggest brokerage house by market value, will buy Credit Agricole SA (EPA:ACA)’s Hong Kong-based brokerage, CLSA Asia-Pacific Markets, for $1.25 billion.
- Australian supermarket chain, Woolworths Limited (ASX:WOW), reported a stronger than expected 1.3 percent rise in food and liquor sales for the fourth quarter, despite consumer uncertainty and steep food price deflation.
- Private equity firm, Carlyle Group LP (NASDAQ:CG), raised about $737 million from the sale of a stake in China Pacific Insurance (Group) Co., Ltd (HKG:2601) (SHA:601601), the country’s third-largest insurer.
- Japanese steel makers, JFE Holdings, Inc. (TYO:5411) and Nippon Steel Corporation (TYO:5401), ended significantly lower in trade today after a report in the Nikkei business daily said that the sector’s two top players are likely to report sharply reduced profit for the current quarter.
- South Korea’s National Pension Service today rejected U.S. auto parts supplier, Visteon Corporation (NYSE:VC)’s offer to buy its 8.1 percent stake in car air conditioner maker Halla Climate Control Corp (KRX:018880).
- Bank of China (HKG:3988) (SHA:601988) and Swiss private bank, Julius Baer (BAER), have agreed to form a strategic partnership to refer clients to each other and undertake various joint marketing activities.
- Hong Kong-based port operator, China Merchants Holdings (Int’l) Co. Ltd (HKG:0144), slumped 5.9 in trade today, after issuing a profit warning.
Economic Calendar for Monday, July 23, 2012:
08:30 A.M. ET: Chicago Fed National Activity Index (June)
11:00 A.M. ET: 4-Week Bill Announcement
11:30 A.M. ET: 3-Month Bill Auction
11:30 A.M. ET: 6-Month Bill Auction