Morning Market News
Stocks that are expected to trade actively in U.S. markets on Friday include: JPMorgan Chase & Co. (NYSE:JPM), Wells Fargo & Co (NYSE:WFC), The Gap Inc. (NYSE:GPS), Eli Lilly & Co. (NYSE:LLY), LinkedIn Corp (NYSE:LNKD), J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT), Ashland Inc. (NYSE:ASH), The Home Depot, Inc. (NYSE:HD), Harris Corporation (NYSE:HRS), Weyerhaeuser Company (NYSE:WY) and Elan Corporation, plc (ADR) (NYSE:ELN).
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• US: Dow Futures: 14738.00 (-0.39%), S&P 500 Futures: 1580.40 (-0.46%), NASDAQ Futures: 2838.50 (-0.52%)
• Europe: CAC: 3730.97 (-1.20%), DAX: 7758.91 (-1.45%), FTSE: 6392.56 (-0.37%)
• Asia-Pacific: Australia: 5013.50 (0.13%), China: 2206.78 (-0.58%), Hong Kong: 22089.05 (-0.06%), India: 5528.55 (-1.17%), Japan: 13485.14 (-0.47%).
• Metals: Gold: 1534.80 (-1.92%), Silver: 26.92 (-2.81%), Copper: 3.38 (-1.53%)
• Energy: Crude Oil: 92.07 (-1.54%), Natural Gas: 4.22 (1.91%)
• Commodities: Corn: 6.38 (0.24%), Soya Bean: 13.74 (0.07%), Wheat: 7.10 (0.11%)
• Currency: EUR/USD: 1.3057 (-0.32%), GBP/USD: 1.5368 (-0.12%), USD/JPY: 99.1100 (-0.57%)
• 10 year US Treasury: 1.744% (-0.046)
Market and Economic News Update
U.S. stock-index futures drop: U.S. stock-index futures are pointing to a lower open on Friday following a weaker than expected retail sales report. Retail sales unexpected contracted 0.4 percent in March, the Commerce Department said today. Analysts were expecting a flat reading for the month. In other economic news, producer prices fell 0.6 percent last month, the biggest drop in 10 months, according to the Labor Department. Economists had forecast a decline of 0.2 percent.
European markets slid: European markets are down in trade today amid investor concerns about how Cyprus would address the 6 billion euro ($7.8 billion) funding gap in its bailout package. Investors were also cautious ahead of the European Union finance ministers meeting. The German DAX (INDEXDB:DAX) lost 1.5 percent to 7758.91 points, the FTSE 100 (INDEXFTSE:UKX) shed 0.4 percent to 6392.56 and the CAC 40 (INDEXEURO:PX1) slumped 1.2 percent to 3730.97 points. The euro zone blue-chip ESTX 50 PR.EUR (INDEXSTOXX:SX5E) (Euro Stoxx 50) gave up 1.4 percent.
Asian markets end lower: Asian markets took a breather and closed lower on Friday, despite strong overnight cues from the Wall Street. The NIKKEI 225 (INDEXNIKKEI:NI225) closed down 0.47 percent, following Thursday’s 2 percent rally, while the HANG SENG INDEX (INDEXHANGSENG:HIS) ended down 0.1 percent. The SSE Composite Index (SHA:000001) (Shanghai Composite Index) finished 0.6 percent lower. The S&P/ASX 200 (INDEXASX:XJO) index added 0.1 percent, and was up 2.5 percent for the week. The benchmark Indian 30-share BSE SENSITIVE (INDEXBOM:SENSEX) index was the worst performer in the region, down 1.6 percent to close at 18242.56 points.
Stocks to Watch
JPMorgan Chase & Co. (NYSE:JPM)
JPMorgan Chase & Co. (NYSE:JPM) reported better than expected quarterly profit but shares fell in New York pre-market trading as net revenue fell and loan growth slowed. JPMorgan Chase & Co. (NYSE:JPM) said it earned $1.39 a share on revenue of $25.8 billion in its fiscal first quarter. Analysts were expecting earnings of $1.39 a share on $25.86 billion in revenue. In addition, JPMorgan Chase & Co. (NYSE:JPM) said it would raise its dividend from 30 cents a share to 38 cents a share, and repurchase $2.6 billion in common shares.
Wells Fargo & Co (NYSE:WFC)
Wells Fargo & Co (NYSE:WFC) posted first quarter earnings excluding items of 92 cents per share, 4 cents above the average analysts’ estimate. Revenue fell to $21.3 billion from $21.6 billion in the year-ago period, trailing estimates of $21.59 billion. The closely watched net interest margin fell to 3.48 percent from 3.91 percent a year earlier and 3.56 percent in the fourth quarter. Wells Fargo & Co (NYSE:WFC) shares fell more than 1 percent in early New York Trading.
The Gap Inc. (NYSE:GPS)
The Gap Inc. (NYSE:GPS) reported March same-store sales that fell 1 percent against forecasts for a drop of 1.7 percent. Net sales for the five-week period ended April 6, 2013 increased 7 percent to $1.56 billion compared to the same period last year. Shares of The Gap Inc. (NYSE:GPS) were inactive in pre-market trading.
Eli Lilly & Co. (NYSE:LLY)
Eli Lilly & Co. (NYSE:LLY) is planning to lay-off nearly 30 percent or about 1,000 of its sales representatives in the U.S. as part of a restructuring program. The lay-offs and reorganization are expected to be completed by July, the Wall Street Journal reported late yesterday. Eli Lilly & Co. (NYSE:LLY) is however planning to add about 300 diabetes sales jobs as part of the restructuring.
LinkedIn Corp (NYSE:LNKD)
LinkedIn Corp (NYSE:LNKD) has acquired mobile news reader app Pulse in a deal worth $90 million. The deal is expected to close during the second quarter. LinkedIn Corp (NYSE:LNKD) will pay about 90 percent in stock and 10 percent in cash for the application. More than 30 million people in 190 countries use Pulse’s e-reader applications. LinkedIn Corp (NYSE:LNKD) shares tumbled in morning trade following the news.
J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT)
Trucking and transportation company J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT) reported first quarter earnings of 61 cents a share, missing Street estimates of 64 cents a share, while revenue was in line with expectations at $1.29 billion. The company said growth in its freight-brokerage unit and other segments offset shrinkage in its trucking fleet. J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT) shares fell 65 cents to close at $74.22 before the report, and were inactive in early morning trade.
Ashland Inc. (NYSE:ASH)
New York hedge fund Jana Partners LLC unveiled a 7.4 percent stake in specialty chemical company Ashland Inc. (NYSE:ASH). Jana owned 5.81 million shares of Ashland Inc. (NYSE:ASH) as of yesterday, the activist fund said in a regulatory filing. Jana said Ashland Inc. (NYSE:ASH)’s current value represents “an attractive investment opportunity.” Ashland Inc. (NYSE:ASH) climbed 4 percent to $82.
The Home Depot, Inc. (NYSE:HD)
The Home Depot, Inc. (NYSE:HD) was raised to a “buy” rating from a “hold” rating by Jefferies on Friday, citing expectations for strong first quarter comparable-store sales and a rise in home investment due to rising home prices. Analysts Daniel Binder and John Gugliuzza also raised its price target to $85 from $64. Shares of The Home Depot, Inc. (NYSE:HD) edged 0.5 percent to $72.11 in pre-market trading.
Harris Corporation (NYSE:HRS)
Defense contractor Harris Corporation (NYSE:HRS) lowered its third quarter earnings outlook, sending shares lower. Harris Corporation (NYSE:HRS) now expects to report adjusted earning of $1.12 a share, compared to the average analysts’ estimate of $1.26 a share. Harris Corporation (NYSE:HRS) said earnings are likely to be weaker due to delays emanating from the government budget uncertainties.
Weyerhaeuser Company (NYSE:WY)
Pulp and paper company Weyerhaeuser Company (NYSE:WY) raised its quarterly dividend by 18 percent from 17 cents a share to 20 cents a share. The dividend will be paid on May 31 to shareholders of record as of May 10, and will cost Weyerhaeuser Company (NYSE:WY) an additional $16.3 million a quarter. Shares were down at $31.51 in light morning trade.
Elan Corporation, plc (ADR) (NYSE:ELN)
Shareholders have approved Irish drug maker Elan Corporation, plc (ADR) (NYSE:ELN)’s $1 billion share buyback plan. The repurchase, priced between $11.25 and $13.00 per share, was approved by 99.2 percent of shareholders at a meeting on Friday. Elan Corporation, plc (ADR) (NYSE:ELN) is facing a potential a takeover approach from U.S. investment firm Royalty Pharma. Elan Corporation, plc (ADR) (NYSE:ELN)’s shares are trading at $11.90 in New York.
Economic Calendar for Friday, April 12, 2013:
08:30 A.M. ET: Producer Price Index (MoM) (March)
08:30 A.M. ET: Producer Price Index (YoY) (March)
08:30 A.M. ET: Producer Price Index ex Food & Energy (MoM) (March)
08:30 A.M. ET: Producer Price Index ex Food & Energy (YoY) (March)
08:30 A.M. ET: Retail Sales (MoM) (March)
08:30 A.M. ET: Retail Sales ex-Autos (MoM) (March)
09:55 A.M. ET: Reuters/Michigan Consumer Sentiment Index (April)
10:00 A.M. ET: Business Inventories (February)
12:30 P.M. ET: Federal Reserve Chairman Ben Bernanke speaks.