Morning Market Update
Stocks that are expected to trade actively in U.S. markets on Wednesday include: Netflix, Inc. (NASDAQ:NFLX), Microsoft Corporation (NASDAQ:MSFT), Carlyle Group LP (NASDAQ:CG), Zynga Inc (NASDAQ:ZNGA), Toyota Motor Corporation (ADR) (NYSE:TM) (TYO:7203), Herbalife Ltd. (NYSE:HLF), Fortress Investment Group LLC (NYSE:FIG), Target Corporation (NYSE:TGT), Macy’s, Inc. (NYSE:M), NYSE Euronext (NYSE:NYX) and IntercontinentalExchange Inc (NYSE:ICE).
Market Levels
• US: Dow Futures: 13088.00 (0.18%), S&P 500 Futures: 1422.60 (0.20%), NASDAQ Futures: 2652.00 (0.12%)
• Europe: CAC: 3652.61 (0.00%), DAX: 7636.23 (0.00%), FTSE: 5951.71 (0.00%)
• Asia-Pacific: Australia: 4635.20 (0.00%), China: 2219.13 (0.25%), Hong Kong: 22541.18 (0.00%), India: 5905.60 (0.85%), Japan: 10230.36 (1.47%).
• Metals: Gold: 1660.40 (0.05%), Silver: 30.04 (0.48%), Copper: 3.59 (1.16%)
• Energy: Crude Oil: 89.18 (0.64%), Natural Gas: 3.36 (0.30%)
• Commodities: Corn: 7.05 (0.28%), Soya Bean: 14.36 (0.46%), Wheat: 7.93 (0.16%)
• Currency: EUR/USD: 1.3204 (0.16%), GBP/USD: 1.6144 (0.12%), USD/JPY: 85.3700 (0.71%)
• 10 year US Treasury: 1.763% (-0.012)
Market and Economic News Update
U.S. stock-index futures rise: U.S. stock-index futures are pointing to a higher open on Wednesday as President Barack Obama cut short his vacation in Hawaii to resume budget discussions, just six days ahead of the deadline. On the economic front, the S&P/Case Shiller home price index of 20 metropolitan areas rose 0.7 percent in October on a seasonally adjusted basis, compared to the 0.5 percent gain forecast by economists. Year over year, prices in the 20 cities jumped 4.3 percent, topping expectations for a rise of 4.0 percent.
European markets closed: The German DAX (INDEXDB:DAX), the FTSE 100 (INDEXFTSE:UKX) and the CAC 40 (INDEXEURO:PX1) were closed for Boxing Day holiday.
Asian markets end higher: Asian markets closed higher on Wednesday, with the NIKKEI 225 (INDEXNIKKEI:NI225) finishing at its highest level in nine months, after the yen fell on expectations of an aggressive monetary easing stance by new Prime Minister Shinzo Abe. The SSE Composite Index (SHA:000001) (Shanghai Composite Index) added 0.2 percent to 2,219.1 points, while the benchmark Indian 30-share BSE SENSITIVE (INDEXBOM:SENSEX) index ended 0.9 percent higher. The HANG SENG INDEX (INDEXHANGSENG:HIS) and the S&P/ASX 200 (INDEXASX:XJO) index were closed for a public holiday.
Stocks to Watch
Netflix, Inc. (NASDAQ:NFLX)
Netflix, Inc. (NASDAQ:NFLX) said it has fully restored its video-streaming service after a Christmas Eve outage that hit many of its customers in the United States, Canada and Latin America. Netflix, Inc. (NASDAQ:NFLX) said the outage was triggered by technical problems at one of Amazon.com, Inc. (NASDAQ:AMZN)’s Web service centers. Netflix, Inc. (NASDAQ:NFLX) spokesman Joris Evers said the outage started at about 3:30 P.M. Eastern Time on Monday and was fully restored Tuesday morning. The event marks the latest in a series of outages from Amazon Web Services, with one occurring earlier this year that knocked out prominent websites like Pinterest, Instagram and Foursquare. Shares of Netflix, Inc. (NASDAQ:NFLX) were inactive in morning trade, while Amazon.com, Inc. (NASDAQ:AMZN) moved lower in pre-market.
Microsoft Corporation (NASDAQ:MSFT)
Microsoft Corporation (NASDAQ:MSFT) said Chief Research and Strategy Officer Craig Mundie plans to retire in 2014, after two decades at the software giant. Mundie has relinquished control of Microsoft Corporation (NASDAQ:MSFT)’s large research organization and is taking on a new role as a senior adviser to Chief Executive Officer Steve Ballmer, according to an internal memo circulated this month. Mundie was one of the two men hand-picked by Bill Gates to take over leadership of the technical side of Microsoft Corporation (NASDAQ:MSFT) when he retired from full-time work at the company in 2008. The news was first reported on Monday by the All Things D tech blog. Microsoft Corporation (NASDAQ:MSFT) shares edged higher before the opening bell.
Carlyle Group LP (NASDAQ:CG)
Carlyle Group LP (NASDAQ:CG) will sell Japan-based pharmaceutical capsules maker, Qualicaps Co Ltd to Mitsubishi Chemical Holdings Corp. (TYO:4188) for about 50 billion yen ($589.66 million), including debt. The transaction is expected to be completed by March 2013. Qualicaps, established in 1965 as a joint venture between Shionogi & Co Ltd (TYO:4507) and Eli Lilly and Co. (NYSE:LLY), manufactures and distributes gelatin-based capsules as well as health and nutrition products. It was acquired by Carlyle Group LP (NASDAQ:CG) in 2005 from Shionogi & Co Ltd (TYO:4507). Shares of Carlyle Group LP (NASDAQ:CG) were inactive in early trade.
Zynga Inc (NASDAQ:ZNGA)
Online gaming site Zynga Inc (NASDAQ:ZNGA) is reportedly close to launching its real money gaming site in the U.K. AllThingsD said two landing pages, Zynga Plus Poker and Zynga Plus Casino, were launched on Monday as a marketing tool to attract customers ahead of an official launch. Zynga Inc (NASDAQ:ZNGA) declined to comment on the report. Shares of Zynga Inc (NASDAQ:ZNGA) jumped 2 percent in morning trade.
Toyota Motor Corporation (ADR) (NYSE:TM) (TYO:7203)
Toyota Motor Corporation (ADR) (NYSE:TM) (TYO:7203) said it expects to sell 9.91 million vehicles worldwide in 2013, up 2 percent from 2012, led by demand from overseas markets. For 2012, Toyota Motor Corporation (ADR) (NYSE:TM) (TYO:7203) estimates sales expanded 22 percent to a record 9.7 million, as it recovers from a huge earthquake in Japan and Thai floods in 2011 that disrupted production. The maker of the Corolla and the Camry sedan expects sales in the U.S. and Asia to continue to rise next year, more than offsetting a projected 15 percent drop in Japan. Shares of Toyota Motor Corporation (ADR) (NYSE:TM) (TYO:7203) jumped 1.3 percent in Tokyo trading.
Herbalife Ltd. (NYSE:HLF)
Herbalife Ltd. (NYSE:HLF) has retained law firm Boies, Schiller & Flexner LLP to help defend itself against attacks by hedge fund manager Bill Ackman, The Wall Street Journal reported. Boies Schiller, co-founded by litigator David Boies, specializes in complex corporate litigation. The move comes a week after Ackman announced a massive short position in the nutritional supplements company’s stock, and called the company an unsustainable “pyramid scheme.” Herbalife Ltd. (NYSE:HLF) shares are up 3 percent in early morning trade.
Fortress Investment Group LLC (NYSE:FIG)
Fortress Investment Group LLC (NYSE:FIG) announced the retirement of co-founder Robert Kauffman and revealed plans to redeem or buy all of his shares in the New York-based investment firm. Kauffman, who co-founded Fortress Investment Group LLC (NYSE:FIG) in 1998, most recently oversaw the company’s long-only fixed-income business, Logan Circle Partners. Fortress Investment Group LLC (NYSE:FIG) has more than $50 billion in assets under management, and its stock has soared more than 22 percent this year. Shares of Fortress Investment Group LLC (NYSE:FIG) were inactive in the pre-market on Monday.
Target Corporation (NYSE:TGT), Macy’s Inc (NYSE:M)
Retail stocks, including Target Corporation (NYSE:TGT) and Macy’s, Inc. (NYSE:M), could be in focus today after data from MasterCard Advisors SpendingPulse showed that U.S. holiday sales growth slowed by more than half this year to 0.7 per cent from a 2 percent pace in the same period a year ago. Growing uncertainty about the economy and Hurricane Sandy disrupted shopping. Analysts were expecting holiday sales to grow 3 to 4 percent this year. Last month, Macy’s, Inc. (NYSE:M) and Target Corporation (NYSE:TGT), both posted same-store sales that trailed analysts’ estimates.
NYSE-Euronext (NYSE:NYX)
NYSE Euronext (NYSE:NYX) is being sued by the New Jersey Carpenters Pension Fund over its proposed $8.2 billion sale to IntercontinentalExchange Inc (NYSE:ICE). The fund, which holds shares of NYSE Euronext (NYSE:NYX), said that deal undervalues the stock. The lawsuit, filed on Friday at the Supreme Court of the New York State, contends that NYSE Euronext (NYSE:NYX) breached its duty to maximize shareholder returns. The deal values NYSE Euronext (NYSE:NYX) at about $33.12 a share, and post the transaction, NYSE Euronext (NYSE:NYX) shareholders would own approximately 36 percent of IntercontinentalExchange Inc (NYSE:ICE) shares. NYSE Euronext (NYSE:NYX) and IntercontinentalExchange Inc (NYSE:ICE) shares were inactive in pre-market trading.
Economic Calendar for Wednesday, December 26, 2012:
07:00 A.M. ET: MBA Purchase Applications (Week ending Friday, December 21)
07:45 A.M. ET: ICSC-Goldman Store Sales (Week ending Saturday, December 22)
08:55 A.M. ET: Redbook Index (YoY)
08:55 A.M. ET: Redbook Index (MoM)
10:00 A.M. ET: S&P/Case-Shiller Home Price Indices (YoY) (October)
10:00 A.M. ET: Richmond Fed Manufacturing Index (December)
10:00 A.M. ET: State Street Investor Confidence Index (December)
11:30 A.M. ET: 4-Week Bill Auction
01:00 P.M. ET: 3-Month Bill Auction
01:00 P.M. ET: 6-Month Bill Auction
