Every morning we puts out a news report with the latest news in global stock markets, company news, and global economic news.
Morning Market Update
Berkshire Hathaway’s Buffett On Diversification
In his 2014 letter preview, Buffett states that, far from being a weak choice, indexing can often achieve investor's goals far more easily than complicated picking strategies. This is a special guest post by Robert R. Johnson, Ph.D., CFA, CAIA. He is a full professor of finance at the Heider College of Business at Creighton Read More
* US: Dow Futures: 13472.00 (0.14%), S&P 500 Futures: 1452.60 (0.23%), NASDAQ Futures: 2761.25 (-0.14%)
* Europe: CAC: 3507.81 (0.20%), DAX: 7380.44 (0.06%), FTSE: 5898.26 (0.47%).
* Asia-Pacific: Australia: 4528.20 (0.82%), China: 2105.62 (0.32%), Hong Kong: 21416.64 (0.98%), India: 5660.25 (0.22%), Japan: 8806.55 (1.20%).
* Metals: Gold: 1748.30 (0.11%), Silver: 33.05 (0.28%), Copper: 3.70 (0.11%)
* Energy: Crude Oil: 92.49 (0.43%), Natural Gas: 3.40 (-0.93%)
* Commodities: Corn: 7.40 (0.30%), Soya Bean: 14.95 (0.10%), Wheat: 8.51 (0.38%)
* Currency: EUR/USD: 1.3126 (0.56%), GBP/USD: 1.6153 (0.26%), USD/JPY: 78.6600 (-0.29%)
* 10 year US Treasury: 1.703% (0.040)
Financial and Economic News Update
U.S. stock-index futures mixed: U.S. stock-index futures are pointing to a mixed open on Wednesday despite a better-than-expected housing starts report. Housing starts increased 15 percent last month to a seasonally adjusted annual rate of 872,000 units, according to the Commerce Department. Economists had expected a rise to a 770,000-unit rate. American Express Company (NYSE:AXP) and eBay Inc (NASDAQ:EBAY) are slated to report earnings after the closing bell.
European markets trading modestly higher: European markets are trading higher on Wednesday with the German DAX (INDEXDB:DAX) up 0.1 percent at 7380.44, the FTSE 100 (INDEXFTSE:UKX) gained 0.5 percent to 5898.26 and the CAC 40 (INDEXEURO:PX1) added 0.2 percent to 3507.81. The euro zone blue-chip ESTX 50 PR.EUR (INDEXSTOXX:SX5E) (Euro Stoxx 50) was trading 0.5 percent higher.
Asian markets end higher: Asian markets closed higher on Wednesday with the HANG SENG INDEX (INDEXHANGSENG:HIS) ending up 1 percent at 21,416.6, while the SSE Composite Index (SHA:000001) (Shanghai Composite Index) gained 0.3 percent. Japan’s NIKKEI 225 (INDEXNIKKEI:NI225) added 105.24 points to 8,806.55, its highest close since October 5. The S&P/ASX 200 (INDEXASX:XJO) index climbed 36.7 points to 4,528.2. The benchmark Indian 30-share BSE SENSITIVE (INDEXBOM:SENSEX) index edged 0.1 percent higher.
Company News Update
* Bank of America Corp (NYSE:BAC) reported third-quarter profit of $340 million, which translated to $0.00 per share, on revenue of $22.5 billion. Analysts expected the bank to report a per share loss of 7 cents, on $21.9 billion of revenue.
* PepsiCo, Inc. (NYSE:PEP) reported third-quarter earnings excluding items of $1.20 per share, on revenue of $16.65 billion. Analysts had forecast earnings excluding items of $1.16 a share on $16.9 billion in revenue.
* BlackRock, Inc. (NYSE:BLK) posted third quarter adjusted profit of $3.47 per share that beat the average analysts’ estimate of $3.32 a share. Total assets under management gained 3 percent during the quarter and was up 10 percent from a year ago.
* Halliburton Company (NYSE:HAL) said third quarter net income fell 12 percent to $602 million, or 65 cents per share, from $683 million, or 74 cents per share, a year ago. Revenue for the period increased 9 percent to $7.11 billion. Analysts had projected earnings of 67 cents a share on revenue of $7.14 billion.
* Stanley Black & Decker, Inc. (NYSE:SWK) reported third quarter earnings excluding items of $1.40 per share, 5 cents below the average analysts’ estimate. Sales increased 6.4 percent to $2.79 billion, also trailing estimates of $2.83 billion. The maker of hardware, tools and industrial equipment also lowered its full-year adjusted earnings estimate.
* St. Jude Medical, Inc. (NYSE:STJ) posted third quarter earnings excluding items of 83 cents a share, 2 cents above the average analysts’ estimate. Sales fell to $1.33 billion from $1.38 billion a year ago, also trailing estimates of $1.34 billion.
* The Bank of New York Mellon Corporation (NYSE:BK) reported third quarter profit of $725 million, or 61 cents a share, up from $651 million, or 53 cents a share, in the year-ago quarter. Revenue fell 0.5 percent to $3.68 billion. Analysts were looking for earnings of 54 cents on revenue of $3.6 billion.
* Quest Diagnostics Inc (NYSE:DGX) posted third quarter earnings excluding one-time items of $1.18 a share, in line with estimates. Revenue for the period declined 2.9 percent to $1.85 billion, missing estimates of $1.91 billion.
* U.S. Bancorp (NYSE:USB) said third quarter profit rose 16 percent to $1.47 billion, or 74 cents a share, versus $1.27 billion, or 64 cents a share, in the same period last year. Revenue gained 8 percent to $5.18 billion. Analysts had projected earnings of 74 cents a share on revenue of $5.13 billion.
* Textron Inc. (NYSE:TXT) said third quarter earnings from continuing operations rose to 48 cents per share from 45 cents per share. Revenue increased 6.6 percent to $3 billion. Analysts forecast earnings of 51 cents a share on revenue of $3.06 billion. The world’s largest maker of corporate jets raised its earnings guidance for the year.
* Northern Trust Corporation (NASDAQ:NTRS) said third quarter profit rose 4.9 percent to $178.8 million, or 73 cents a share, from $170.4 million, or 70 cents, in the year-ago period. Revenue came in at $972.5 million. Analysts were expecting earnings of 74 cents a share on revenue of $988 million.
* Abbott Laboratories (NYSE:ABT) reported third quarter earnings excluding certain items of $1.30 a share, on revenue of $9.77 billion. Analysts had projected earnings of $1.28 a share on revenue of $9.94 billion. The health-care company narrowed its full-year adjusted per-share earnings guidance.
* M&T Bank Corporation posted third quarter adjusted profit of $2.24 a share that easily beat the average analysts’ estimate of $1.85 a share.
* Amphenol Corporation (NYSE:APH) said third quarter profit rose 9.5 percent to $147.5 million, or 90 cents a share, from $134.6 million, or 79 cents a share, in the same period last year. Revenue increased 6.8 percent to $1.1 billion. The electronics-equipment maker raised its full-year earnings estimate.
* Internet security company Check Point Software Technologies Ltd. (NASDAQ:CHKP) reported third-quarter earnings excluding items of 79 cents per share, one cent above estimates. Revenue increased 7.8 percent to $332.4 million.
* Exxon Mobil Corporation (NYSE:XOM) agreed to buy Canadian oil and gas producer Celtic Exploration Ltd. (TSE:CLT) for about 3.1 billion Canadian dollars ($3.14 billion) in cash and stock.
* Ford Motor Company (NYSE:F) is recalling 262,000 Fiesta subcompacts from model years 2011-2013 to fix a problem with the programming of passenger side airbags.
* Electronics retailer Best Buy Co., Inc. (NYSE:BBY) is planning to sell its own tablet computer, the Android-based “Insignia Flex,” for $239 to $259, according to a Reuters report.
* Pfizer Inc. (NYSE:PFE) said a late-stage study of its kidney cancer drug Inlyta failed to meet its primary endpoint.
* Credit card giant Visa Inc (NYSE:V) may name a new chief executive by the end of this month, according to a report in The Wall Street Journal. Current chief executive Joseph Saunders is expected to retire when his contract expires in March.
* Cisco Systems, Inc. (NASDAQ:CSCO) fell 1.3 percent in early morning trade after analysts at Cantor Fitzgerald downgraded the stock to “hold” from “buy.”
* Murphy Oil Corporation (NYSE:MUR) was lowered to “equal weight” from “overweight” by analysts at Barclays Capital.
* Royal Bank of Scotland Group plc (ADR) (NYSE:RBS) (LON:RBS) was trading 1.8 percent higher in London after it agreed with the U.K. Treasury to exit its Asset Protection Scheme.
* French bank Credit Agricole SA (EPA:ACA) said it would incur a quarterly loss of about 2 billion euros ($2.6 billion) from the sale of its ailing Greek unit Emporiki to rival Alpha Bank SA.
* Dutch chip equipment maker ASML Holding N.V. (ADR) (NASDAQ:ASML) (AMS:ASML) has agreed to buy U.S. group Cymer, Inc. (NASDAQ:CYMI) for about 1.95 billion euros ($2.55 billion) in cash and stock.
* Liquor major Diageo plc (ADR) (NYSE:DEO) (LON:DGE) reported a 5 percent rise in underlying first-quarter sales helped by the ongoing recovery of the U.S. spirits market and increasing demand from the emerging economies.
* French food producer Groupe Danone SA (EPA:BN) reported third-quarter revenue of 5.3 billion euros ($6.9 billion) that was broadly in line with analysts’ expectations. The company behind Activia yogurt also confirmed its full-year guidance of sales growth of 5 percent to 7 percent.
* Cable and Wireless Communications Plc (LON:CWC) is in talks to sell its controlling stake in Macau’s largest telecoms group, Companhia de Telecomunicacoes de Macau, S.A.R.L. to China’s Citic Pacific (HKG:0267).
* Swedish phone company TeliaSonera AB (STO:TLSN) fell 1.6 percent after reporting third-quarter earnings that missed analysts’ estimates because of falling sales in the Nordic region.
* Oil giant Statoil ASA(ADR) (NYSE:STO) and Norwegian state-owned renewable company Statkraft have acquired the Dudgeon Offshore Wind Farm project in the U.K. North Sea.
* Mining giant Rio Tinto plc (ADR) (NYSE:RIO) (LON:RIO) (ASX:RIO) jumped 3.6 percent in London after AFP reported that the company plans to cut 30 percent of its workforce in Europe by the end of next year.
* British retailer Tesco PLC (LON:TSCO) gained 2.6 percent after UBS AG raised its recommendation for the stock to “buy” from “neutral” and added it to its most preferred list.
* BHP Billiton Limited (ADR) (NYSE:BHP) (ASX:BHP) (LON:BLT) said first-quarter iron-ore production rose 1 percent to 39.8 million tons, in line with analyst estimates. The world’s largest mining company also maintained its guidance for a 5 percent increase in output this year.
* Suzuki Motor Corporation (TYO:7269) jumped 1.8 percent in Tokyo after its Indian joint venture unveiled an upgraded model of its top-selling Alto car.
* Chinese telecom equipment maker Huawei Technology Co Ltd (SHE:002502) said that the U.S. congressional committee probe into whether the equipment supplied by it poses a security risk is unlikely to affect its businesses in other overseas markets, according to a Reuters report.
* Foxconn International Holdings Limited (HKG:2038), the world’s largest electronics contract manufacturer, admitted on Tuesday that some participants in a student internship program at one of its factories in China were below the legal working age of 16 years.
* Major Chinese banks, Industrial and Commercial Bank of China (HKG:1398) (SHA:601398), Agricultural Bank Of China Limited (HKG:1288) (SHA:601288), Bank of China (HKG:3988) (SHA:601988) and China Construction Bank Corporation (HKG:0939) (SHA:601939), ended significantly higher after Credit Suisse raised its recommendation on Chinese banks to “overweight” from “market weight.”
* Hong Kong-listed sports talent management firm Viva China Holdings Ltd (HKG:8032) soared to the highest level in 5 months after agreeing to buy a stake in sportswear group Li Ning Co. Ltd. (HKG:2331).
* Hitachi, Ltd. (TYO:6501) gained 2.4 percent after analysts at JPMorgan reaffirmed their “overweight” rating on the stock, saying it was likely to meet its 2012 operating profit forecast.
* Ten Network Holdings Limited (ASX:TEN) plunged to a record low in Sydney after Champ Private Equity ended plans to buy the Australian television broadcaster’s Eye Corp. billboard unit.
* Electronic products maker Fujikon Industrial Holdings Ltd. (HKG:0927) surged 10.8 percent in Hong Kong after saying it expects first-half profit to rise.
Economic Calendar for Wednesday, October 17, 2012:
07:00 A.M. ET: MBA Purchase Applications (Week ending Friday, October 12, 2012)
08:30 A.M. ET: Housing Starts (MoM) (September)
08:30 A.M. ET: Building Permits (MoM) (September)
10:30 A.M. ET: EIA Petroleum Status Report (Week ending Friday, October 12, 2012)