Morning Market Update
Corsair Capital, the event-driven long-short equity hedge fund, gained 6.6% net during the second quarter, bringing its year-to-date performance to 17.5%. Q2 2021 hedge fund letters, conferences and more According to a copy of the hedge fund's second-quarter letter to investors, a copy of which of ValueWalk has been able to review, the largest contributor Read More
• US: Dow: 13077.00 (0.28%), S&P 500: 1412.00 (0.37%), NASDAQ: 2671.50 (0.41%)
• Europe: CAC: 3425.91 (0.57%), DAX: 7207.34 (0.47%), FTSE: 5818.87 (0.36%).
• Asia-Pacific: Australia: 4505.80 (-0.82%), China: 2115.99 (0.07%), Hong Kong: 21763.78 (0.30%), India: 5691.40 (0.00%), Japan: 8954.30 (-0.67%).
• Metals: Gold: 1710.30 (0.05%), Silver: 31.96 (0.53%), Copper: 3.56 (-0.01%)
• Energy: Crude Oil: 86.55 (-0.14%), Natural Gas: 3.53 (-0.08%)
• Commodities: Corn: 7.56 (0.10%), Soya Bean: 15.65 (0.61%), Wheat: 8.73 (0.52%)
• Currency: EUR/USD: 1.2955 (-0.24%), GBP/USD: 1.6022 (0.43%), USD/JPY: 79.8200 (-0.04%)
• 10 year US Treasury: 1.785% (0.028)
Financial and Economic News Update
U.S. stock-index futures rise: U.S. stock-index futures are pointing to a higher open on Wednesday following sharp declines on Tuesday. Data from China and some better-than-expected earnings reports helped ease investors concerns about a slowdown in global growth. The Dow Jones industrial average, the S&P 500 and the NASDAQ are all trading modestly higher.
European markets trading higher: European markets are trading higher on Wednesday with the German DAX (INDEXDB:DAX) up 0.5 percent at 7207.34, the FTSE 100 (INDEXFTSE:UKX) gained 0.4 percent to 5818.87 and the CAC 40 (INDEXEURO:PX1) added 0.6 percent to 3425.91. The euro zone blue-chip ESTX 50 PR.EUR (INDEXSTOXX:SX5E) (Euro Stoxx 50) was trading 0.4 percent higher.
Asian markets end lower: Asian markets closed lower on Wednesday with the HANG SENG INDEX (INDEXHANGSENG:HIS) up 0.3 percent at 21,763.8, while the SSE Composite Index (SHA:000001) (Shanghai Composite Index) closed up 0.1 percent at 2115.99 points. Japan’s NIKKEI 225 (INDEXNIKKEI:NI225) fell 0.7 percent to 8,954.30, ending below the key 9,000-mark. The S&P/ASX 200 (INDEXASX:XJO) index lost 0.8 percent at 4505.80. The benchmark Indian 30-share BSE SENSITIVE (INDEXBOM:SENSEX) index was closed on Tuesday for a public holiday.
Company News Update
• AT&T Inc. (NYSE:T) reported third quarter earnings excluding items of 62 cents per share, two cents above estimates. Revenue came in at $31.5 billion, in line with analyst estimates.
• The Boeing Company (NYSE:BA) reported second quarter earnings excluding items of $1.35 per share that easily beat the average analysts’ estimate of earnings excluding items of $1.13 per share. Revenue increased 13 percent to $20.01 billion from $17.73 billion in the year-ago period, narrowly missing estimates of $20.03 billion. The aerospace company raised its full-year guidance.
• Bristol Myers Squibb Co. (NYSE:BMY) posted third quarter earnings excluding special items of 41 cents per share, one cent below estimates. Sales dipped 30 percent to $3.74 billion, also trailing estimates.
• Eli Lilly And Co. (NYSE:LLY) reported third quarter earnings excluding special items of 79 cents per share that missed the average analysts’ estimate of 83 cents per share. Revenue declined 11 percent to $5.44 billion, also below estimates of $5.62 billion.
• Thermo Fisher Scientific Inc. (NYSE:TMO) reported third quarter earnings excluding one-time items of $1.19 per share, 3 cents above the average analysts’ estimate. Revenue gained 5 percent to $3.09 billion, topping estimates of $2.99 billion. The world’s largest laboratory equipment maker raised its full-year earnings and revenue outlook.
• Wells Fargo & Company (NYSE:WFC) is up 1 percent in early morning trade after Warren Buffett told CNBC that he bought more shares of the country’s largest mortgage lender over the past week.
• Nike, Inc. (NYSE:NKE) has agreed to sell its Umbro sneaker brand to Iconix Brand Group, Inc. (NASDAQ:ICON) for $225 million.
• The Dow Chemical Company (NYSE:DOW) will cut 2,400 jobs, or about 5 percent of its global workforce, and shut 20 manufacturing plants as part of a restructuring plan aimed at reducing annual costs by $500 million.
• Zynga Inc (NASDAQ:ZNGA) has cut 5 percent of its global workforce and shuttered 13 games, as part of a company-wide cost cutting plan.
• Ford Motor Company (NYSE:F) is planning to close its assembly plant in the Belgian town of Genk, in 2014, union leaders said on Wednesday.
• US Airways Group, Inc. (NYSE:LCC) posted third-quarter net profit of $245 million, or $1.24 a share, up from $76 million, or 41 cents, earned in the year-ago period. Revenue increased to $3.53 billion from the prior year’s $3.44 billion
• Personal-products maker Tupperware Brands Corporation (NYSE:TUP) said third quarter profit surged to $47.5 million or 85 cents a share, from $10.5 million, or 17 cents a share, a year earlier. Revenue declined 1.4 percent to $594.4 million. The company raised its full-year earnings forecast.
• Casual-dining company Brinker International, Inc. (NYSE:EAT) reported first quarter earnings excluding certain items of 37 cents a share, on revenue of $683.5 million. Analysts had forecast earnings of 38 cents a share on revenue of $679 million.
• Bookseller Barnes & Noble, Inc. (NYSE:BKS) said that data breach at 63 of its stores may have compromised credit and debit-card information of customers.
• Lockheed Martin Corporation (NYSE:LMT) has secured a contract worth $889.5 million to build 13 C-130J transport planes for the U.S. military, according to a Reuters report.
• Encana Corporation (USA) (NYSE:ECA) (TSE:ECA) said third-quarter operating earnings fell to $263 million, or 36 cents a share, from $389 million, or 53 cents a share. Analysts were expecting a profit of 26 cents a share.
• Specialty chemical company W.R. Grace & Co. (NYSE:GRA) reported third quarter earnings excluding one-time items of $1.04 a share, 3 cents above the average analysts’ estimate. Sales dipped 10 percent to $776.6 million, trailing estimates of $786 million.
• Hospital operator HCA Holdings Inc (NYSE:HCA) announced a special cash dividend of $2.50 a share.
• Yelp Inc (NYSE:YELP) said it would post a third quarter loss of about $2 million and that it paid about $50 million to buy European peer Qype GmbH.
• Software maker VMware, Inc. (NYSE:VMW) reported third quarter earnings of 70 cents a share, topping expectations for 63 cents a share. Sales increased 20 percent to $1.13 billion, in line with estimates.
• Bakery and cafe chain Panera Bread Co (NASDAQ:PNRA) posted third quarter earnings of $1.24 a share on revenue of $529 million that topped estimates for $1.19 a share on sales of $522 million. The company raised its current-quarter and full-year earnings outlook.
• Chemicals company PolyOne Corporation (NYSE:POL) has acquire packaging-products maker Spartech Corporation (NYSE:SEH) for about $250 million, according to a Reuters report.
• Chipmaker RF Micro Devices, Inc. (NASDAQ:RFMD) posted second quarter earnings and revenue that topped estimates, and forecast a strong third quarter.
• Aflac Incorporated (NYSE:AFL) said third-quarter profit rose 36 percent to $1 billion, or $2.16 a share, from $736 million, or $1.57, a year earlier. Revenue gained 14 percent, to $6.8 billion from $6 billion in the year-ago period.
• Facebook Inc (NASDAQ:FB) is up 25 percent in early morning trade as analysts at Citigroup upgraded the stock to “buy” from “neutral.”
• Business software maker SAP AG (ADR) (NYSE:SAP) (ETR:SAP) (FRA:SAP) gained 5.6 percent after reporting third-quarter software license revenue that beat analyst estimates, and raising its full-year revenue target.
• Heineken N.V. (AMS:HEIA), the world’s third-largest brewer, said third quarter net profit rose 9.9 percent to 577 million euros ($749 million), from 525 million euros, a year earlier. Sales increased 7.1 percent to 4.97 billion euros. The Dutch company maintained its full-year profit outlook.
• STMicroelectronics N.V. (ADR) (NYSE:STM) (EPA:STM) swung to a third-quarter loss and said it will cut costs by $150 million a year by the end of 2013 and will temporarily close plants. The company forecast fourth-quarter revenue that may trail some estimates.
• Swedish truck-maker AB Volvo (STO:VOLV-A) (STO:VOLV-B) slumped 3.6 percent after reporting third-quarter profit that missed analysts’ estimates. The world’s second-largest truck-maker said profit plunged 64 percent from a year earlier to 1.37 billion kronor ($206.3 million), trailing analysts’ estimates of 2.83 billion kronor.
• Peugeot SA (EPA:UG) reported weak third quarter sales and rising debt, and suspended dividends for three years in return for state support for its lending arm Banque PSA Finance.
• British American Tobacco plc (LON:BATS) said group sales dropped in the first nine months of the year amid lower consumption in Brazil and western Europe. Europe’s largest cigarette maker sold 517 billion cigarettes during the reporting period, missing consensus estimate of 521 billion.
• Telenor (STO:TELO) surged 5 percent after Norway’s largest telecom operator reported a 41 percent jump in third-quarter net income to 3.65 billion kroner ($635 million) that beat the average analysts’ estimate of 3.4 billion kroner. Sales gained 2.5 percent to 25.3 billion kroner.
• Home Retail Group Plc (LON:HOME), owner of the Argos and Homebase brands in the U.K., reported a 40 per cent drop in first-half pre-tax profits and said it is planning to close or relocate at least 75 stores over the next five years.
• Nordea Bank AB (STO:NDA-SEK) (CPH:NDA-DKK) said third quarter profit rose to 686 million euros ($891 million) from 404 million euros a year earlier. Analysts were expecting a profit of 751 million euros
• Advertising giant WPP PLC (LON:WPP) fell 1 percent in London after analysts at UBS AG lowered the stock to “neutral” from “buy.”
• Chinese telecoms equipment market Huawei Technology Co Ltd (SHE:002502), which has been barred from a $38 billion high-speed broadband project in Australia, is planning to set up a cyber security evaluation center in the country to help ease concerns that its equipment could be used for espionage by the Chinese government, according to a Reuters report.
• Japanese telecom operators, Softbank Corp (TYO:9984) and KDDI Corp (TYO:9433) will offer Apple Inc. (NASDAQ:AAPL)’s 7.9-inch version of the iPad in the country, Apple said on Wednesday.
• BHP Billiton Limited (ADR) (NYSE:BHP) (ASX:BHP) (LON:BLT) is exploring the sale of its Pinto Valley copper mine in Arizona, according to a report in The Financial Times.
• Social gaming sites DeNa Co., Ltd. (TYO:2432) and Gree,Inc. (TYO:3632) closed significantly higher in Tokyo after Facebook yesterday said mobile advertising revenue had roughly tripled in the third quarter.
• Nintendo Co., Ltd (TYO:7974), the world’s largest maker of video-game machines, cut its annual profit outlook by almost one-half as a strong yen and weak demand for its 3DS handheld player weighed on earnings.
• China Vanke Co., Ltd. (SHE:000002), the country’s largest real estate developer, said third-quarter profit more than doubled to 1.35 billion yuan ($215.8 million), from 606.1 million yuan ($96 million) in the same period a year earlier. Revenue increased 65 percent to 15.4 billion yuan from 9.32 billion yuan, a year earlier.
• Kawasaki Heavy Industries, Ltd. (TYO:7012) slumped 5.7 percent after the company trimmed its first-half net-profit view to 12.4 billion yen ($155 million), from an earlier forecast of 14 billion yen, citing weaker-than-expected sales of precision equipment and motorcycles.
• Property developer China Overseas Land & Investment Ltd. (HKG:0688) reported a 6 percent rise in third quarter operating profit to 6.15 billion Hong Kong dollars ($793.5 million), helped by strong sales in Hong Kong and Macau.
• Canon Inc. (ADR) (NYSE:CAJ) (TYO:7751) and Ricoh Co Ltd (TYO:7752) slid in trade today after U.S. rival Xerox Corporation (NYSE:XRX) reported lower-than-expected third-quarter revenue and slashed its full-year earnings outlook.
• GOME Electrical Appliances Holding Ltd. (HKG:0493), China’s second-largest electronics retailer, shed 1.1 percent after warning that it expects to report a third quarter loss of between 100 million yuan ($16 million) and 200 million yuan ($32 million).
• Japan’s All Nippon Airways Co., Ltd. (TYO:9202) gained 1.3 percent after the Nikkei business daily said the carrier was expected to report a first half operating profit of 70 billion yen ($877 million), a 40 percent year-on-year increase.
• Sydney-listed Worleyparsons Limited (ASX:WOR) has agreed to acquire the mining engineering business of South African construction firm Basil Read for 900 million South African rand ($102.7 million).
Economic Calendar for Wednesday, October 24, 2012:
07:00 A.M. ET: MBA Purchase Applications (Week ending Friday, October 19, 2012)
08:58 A.M. ET: Markit Manufacturing PMI (October)
10:00 A.M. ET: New Home Sales (MoM) (September)
10:00 A.M. ET: New Home Sales Change (MoM) (September)
10:30 A.M. ET: EIA Petroleum Status Report (Week ending Friday, October 19, 2012)
01:00 P.M. ET: 5-Yr Note Auction
02:15 P.M. ET: Fed Interest Rate Decision
02:15 P.M. ET: Fed’s Monetary Policy Statement and press conference