Morning Market Update
The latest Robinhood Investors Conference is in the books, and some hedge funds made an appearance at the conference. In a panel on hedge funds moderated by Maverick Capital's Lee Ainslie, Ricky Sandler of Eminence Capital, Gaurav Kapadia of XN and Glen Kacher of Light Street discussed their own hedge funds and various aspects of Read More
* US: Dow Futures: 12789.00 (1.20%), S&P 500 Futures: 1352.20 (1.30%), NASDAQ Futures: 2580.25 (1.44%)
* Europe: CAC: 3170.46 (2.80%), DAX: 6511.19 (1.61%), FTSE: 5566.74 (1.23%)
* Asia-Pacific: Australia: 4147.70 (0.58%), China: 2126.00 (-0.48%), Hong Kong: 18892.79 (0.08%), India: 5043.00 (-1.30%), Japan: 8443.10 (0.91%).
* Metals: Gold: 1615.10 (0.44%), Silver: 27.64 (0.62%), Copper: 3.44 (1.82%)
* Energy: Crude Oil: 90.12 (1.29%), Natural Gas: 3.10 (1.01%)
* Commodities: Corn: 7.91 (1.19%), Soya Bean: 16.08 (3.11%), Wheat: 9.10 (2.90%)
* Currency: EUR/USD: 1.2289 (1.08%), GBP/USD: 1.5690 (1.23%), USD/JPY: 78.1600 (-0.01%)
* 10 year US Treasury: 1.426% (0.027)
Financial and Economic News Update
U.S. stock-index futures trading higher: U.S. stock index futures are pointing to a sharply higher open on Thursday amid better than expected corporate earnings. New claims for jobless benefits also dropped 35,000 last week, to a seasonally adjusted 353,000, the Labor Department said today. The Dow futures, the S&P futures and the NASDAQ future are all trading more than a percent higher.
European markets jump higher: European markets soared in trade today with banks and miners leading the rally after ECB president Mario Draghi said the central bank would do everything necessary to protect the euro zone from collapse. The German DAX (INDEXDB:DAX) was trading up 1.61 percent at 6511.19, the FTSE 100 (INDEXFTSE:UKX) jumped 1.2 percent to 5566.74, and the CAC 40 (INDEXEURO:PX1) rose 2.8 percent to 3170.46. The euro zone blue-chip ESTX 50 PR.EUR (INDEXSTOXX:SX5E) (Euro Stoxx 50) was up 2.90 percent.
Asian markets end mixed: Asian markets closed mixed on Thursday with Japan’s NIKKEI 225 (INDEXNIKKEI:NI225) rebounded off a seven-week low to end up 0.9 percent at 8,443.10. The HANG SENG INDEX (INDEXHANGSENG:HSI) fell 1.3 percent to its lowest since last October, while the SSE Composite Index (SHA:000001) (Shanghai Composite Index) closed down 0.5 percent at 2,126, the lowest level since March 2009. The S&P/ASX 200 (INDEXASX:XJO) index rose 24 points to 4,147.7. The benchmark Indian 30-share BSE SENSITIVE (INDEXBOM:SENSEX) index fell 1.22 percent to 16,639.82 points.
Stocks in Focus
* Exxon Mobil Corporation (NYSE:XOM) posted second-quarter earnings excluding items of $1.86 per share that trailed the average analysts’ estimate of earnings excluding items of $1.95 a share. Revenue for the quarter came in at $127.36 billion, topping Street expectations of $115.08 billion.
* The Dow Chemical Company (NYSE:DOW) reported lower than expected second quarter net income of $649 million, or 55 cents per share, on revenue of $14.51 billion that also trailed expectations. Sales fell across all divisions except agricultural sciences, which saw a jump in demand for pesticides and other farming products during the North American spring planting season.
* 3M Co (NYSE:MMM) posted second-quarter earnings excluding items of $1.66 cents per share, one cent above consensus estimates. Revenue declined to $7.53 billion from $7.6 billion a year ago, missing estimates of $7.8 billion.
* United Technologies Corporation (NYSE:UTX) reported better than expected second quarter earnings from continuing operations of $1.62 per share, on $13.81 billion in revenue that missed the average analysts’ estimate of $14.45 billion. Separately, United Technologies Corporation (NYSE:UTX) also agreed to sell the industrial unit of its Hamilton Sundstrand subsidiary to Carlyle Group LP and BC Partners Ltd for $3.46 billion.
* Sprint Nextel Corporation (NYSE:S) reported a wider than expected second-quarter loss of 46 cents per share, while revenue increased 6 percent to $8.8 billion, from $8.31 billion a year ago, beating estimates of $8.73 billion.
* Homebuilder PulteGroup, Inc. (NYSE:PHM) reported a second-quarter profit that exceeded analyst estimates, due to an increase in new orders for the fifth straight quarter.
* Medical device maker Boston Scientific Corporation (NYSE:BSX) reported second quarter adjusted earnings per share of 11 cents that beat the average estimate on Wall Street by a penny. Quarterly sales declined to $1.83 billion from $1.97 billion in the same quarter last year.
* The Hershey Company (NYSE:HSY)posted second quarter earnings excluding one-time items of 66 cents per share, 5 cents above the average analysts’ estimate. The company also raised its full-year earnings outlook.
* Mead Johnson Nutrition CO (NYSE:MJN) posted second quarter earnings excluding items of 83 cents per share, topping the average analysts’ estimate of 76 cents per share. The baby-formula producer however forecast full-year results that was below expectations.
* Kimberly Clark Corp (NYSE:KMB) reported second quarter adjusted earnings per share of $1.30 that beat consensus estimates of $1.28 per share. The consumer-products company also raised the high end of its full-year forecast.
* Celgene Corporation (NASDAQ:CELG) posted second quarter earnings excluding one-time items of $1.22 a share topping estimates of $1.18 a share. Revenue for the quarter stood at $1.37 billion, better than the $1.35 billion that analysts were expectation.
* Daily-deal site Groupon Inc (NASDAQ:GRPN) was trading 7 percent lower in New York pre-market trading after analysts at Evercore Partners lowered the stock to “equal weight” from “overweight.”
* Energy company Oneok, Inc. (NYSE:OKE) has increased it quarterly dividend by 8 percent to 33 cents a share.
* Consumer goods giant Unilever plc (ADR) (NYSE:UL) (LON:ULVR) posted second-quarter sales that beat analysts’ estimates as strong demand in emerging markets for its personal care products offset tepid growth in Europe and the US. The company however warned that a worsening global economy could lead to a deterioration of consumer sentiment.
* Anglo-Dutch oil major, Royal Dutch Shell plc (ADR) (NYSE:RDS.A) (LON:RDSA) reported second quarter profit excluding one-time charges of $5.7 billion that missed the average analysts’ estimate of $6.3 billion. The lower than expected profit was mainly due to weak energy prices and extra maintenance costs.
* Banco Santander, S.A. (NYSE:SAN), Europe’s largest bank, said second quarter net profit plunged almost 93 percent to 100 million euros ($121.37 million), from 1.39 billion euros a year earlier, as the Spanish banking giant set aside 1.3 billion euros ($1.58 billion) to protect against real-estate losses in its home market.
* Volkswagen AG (ETR:VOW) (FRA:VOW), Europe’s largest carmaker, reported better than expected second-quarter profits, and reaffirmed its full-year target of increasing revenue and deliveries, despite heightened competition and economic uncertainty in Europe.
* AstraZeneca plc (ADR) (NYSE:AZN) (LON:AZN) reported second quarter net profit that beat consensus estimates, but revenue trailed expectations. The U.K.’s second largest drug maker reiterated its full-year earnings outlook.
* German industrial conglomerate Siemens AG (ADR) (NYSE:SI) (ETR:SIE) (FRA:SIE) reported fiscal third-quarter profit and sales that fell short of analysts’ estimates, and said quarterly orders dropped 23 percent, as customers, wary of the uncertainty in Europe, increasingly refrained from making investments.
* British aero engine maker Rolls-Royce Holding PLC (LON:RR) reported a better than expected 7 percent rise in first-half profit amid strong demand from The Boeing Company (NYSE:BA) and Airbus for its fuel-efficient engines.
* French telecom equipment maker Alcatel-Lucent SA (ADR) (NYSE:ALU) (EPA:ALU) said it will cut 5000 jobs as part of a restructuring plan to reduce costs by 1.25 billion euros ($1.5 billion) by the end of next year. The company also reported a second-quarter net loss of 254 million euros ($308 million) amid a global economic slump and increased competition.
* Peugeot SA (EPA:UG) was trading 3 percent lower after Moody’s Investors Service reduced the French car maker to Ba2 from Ba1.
* Nomura Holdings, Inc. (ADR) (NYSE:NMR) (TYO:8604) chief executive Kenichi Watanabe, and chief operating officer Takumi Shibata, have resigned in the wake of the insider trading scandal at Japan’s biggest investment bank. Koji Nagai, president of its domestic brokerage unit, has been named as the new chief executive officer.
* Nissan Motor Co., Ltd. (TYO:7201), Japan’s second-biggest automaker, reported a 20 percent drop in fiscal first quarter operating profit as a strong yen and higher sales promotion expenses in North America dented earnings. Nissan, which is part owned by Renault SA (EPA:RNO), reiterated its full-year forecast.
* Struggling Qantas Airways Limited (ASX:QAN) is reportedly in talks with Dubai’s flagship carrier Emirates, to form a long-haul alliance, as part of efforts to boost its ailing international flights unit.
* Canon Inc. (ADR) (NYSE:CAJ) (TYO:7751), the world’s largest camera maker, plunged to a 40-month low in Tokyo trading after cutting its full-year operating profit forecast by 13 percent to 390 billion yen ($4.99 billion).
* Hong Kong Exchanges and Clearing Limited (HKG:0388) has secured approval from London Metal Exchange shareholders to acquire the 135-year-old British institution, in a deal worth 1.38 billion pounds ($2.1 billion).
* Japanese medical device maker Terumo Corp (TYO:4543) has proposed to invest 50 billion yen ($640 million) in cash-starved camera-maker Olympus Corp (TYO:7733), and form a joint holding company.
* Australia’s Wesfarmers Limited (ASX:WES) said total sales at its Coles supermarkets rose 4.6 percent in the fiscal fourth quarter, to 8.35 billion Australian dollars ($8.61 billion).
* Japanese robot maker Fanuc Corp (TYO:6954) said first quarter new income rose 1.5 percent, while sales increased 4.9 percent, amid higher demand for its products. The stock ended 5.3 percent higher in Tokyo.
* Australia’s largest gold miner Newcrest Mining Limited (ASX:NCM) reported a 15 percent drop in full-year gold production to 2.29 million troy ounces, amid severe disruption in operations due to heavy rains.
Economic Calendar for Thursday, July 26, 2012:
08:30 A.M. ET: Initial Jobless Claims (Week ending Saturday, July 21, 2012)
08:30 A.M. ET: Continuing Jobless Claims (Week ending Saturday, July 14, 2012)
08:30 A.M. ET: Durable Goods Orders (June)
08:30 A.M. ET: Durable Goods Orders ex Transportation (June)
09:45 A.M. ET: Bloomberg Consumer Comfort Index (Week ending Sunday, July 22)
10:00 A.M. ET: Pending Home Sales (MoM) (June)
10:00 A.M. ET: Treasury Secretary Timothy Geithner speaks.
10:30 A.M. ET: EIA Natural Gas Report (Week ending Friday, July 20, 2012)
11:00 A.M. ET: Kansas City Fed Manufacturing Index (July)
04:30 P.M. ET: Fed Balance Sheet
04:30 P.M. ET: Money Supply