Morning Market Update
Stocks that are expected to trade actively in U.S. markets on Tuesday include: Herbalife Ltd. (NYSE:HLF), Pfizer Inc. (NYSE:PFE), Sprint Nextel Corporation (NYSE:S), Express Scripts Holding Company (NASDAQ:ESRX), Best Buy Co., Inc. (NYSE:BBY), Hartford Financial Services Group Inc (NYSE:HIG), Dell Inc. (NASDAQ:DELL), Sturm, Ruger & Company (NYSE:RGR), Buffalo Wild Wings (NASDAQ:BWLD), Safeway Inc. (NYSE:SWY), Riverbed Technology, Inc. (NASDAQ:RVBD), Spansion Inc. (NYSE:CODE)
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• US: Dow Futures: 14784.00 (0.00%), S&P 500 Futures: 1588.00 (-0.01%), NASDAQ Futures: 2860.00 (0.04%)
• Europe: CAC: 3865.16 (-0.09%), DAX: 7933.80 (0.76%), FTSE: 6448.62 (-0.15%)
• Asia-Pacific: Australia: 5191.20 (1.28%), China: 2177.91 (0.00%), Hong Kong: 22737.01 (0.69%), India: 5930.20 (0.44%), Japan: 13860.86 (-0.17%).
• Metals: Gold: 1468.50 (0.07%), Silver: 24.25 (0.53%), Copper: 3.21 (-0.54%)
• Energy: Crude Oil: 93.98 (-0.55%), Natural Gas: 4.34 (-1.18%)
• Commodities: Corn: 6.59 (6.30%), Soya Bean: 14.15 (1.95%), Wheat: 7.09 (3.47%)
• Currency: EUR/USD: 1.3074 (-0.19%), GBP/USD: 1.5497 (-0.02%), USD/JPY: 97.6900 (-0.07%)
• 10 year US Treasury: 1.653% (-0.018)
Market and Economic News Update
U.S. stock-index futures largely unchanged: U.S. stock-index futures are pointing to a flat open on Tuesday despite the S&P/Case-Shiller home price index rising more-than-expected in February. The S&P/Case-Shiller index of property values in 20 cities recorded a 9.3 percent rise over the last 12 months. The increase exceeded the 9 percent that analysts were expecting. In other economic news, the Conference Board will release its consumer confidence index for April at 10 A.M. ET. Analysts forecast a rise to 60.8 from 59.7 last month.
European markets mixed: European markets are mixed in trade, as investors reacted to a slew of economic data from the region. Inflation in the euro zone fell to a three-year low of 1.2 percent in April, while unemployment reached a record 12.1 percent of the working population in March. In Germany, better than expected consumer sentiment data helped lift the DAX (INDEXDB:DAX) to close to a percent. The FTSE 100 (INDEXFTSE:UKX) and the CAC 40 (INDEXEURO:PX1) were marginally in the red. The euro zone blue-chip ESTX 50 PR.EUR (INDEXSTOXX:SX5E) (Euro Stoxx 50) was hovering close to the flat-line.
Asian markets edge higher: Asian stocks closed higher on Tuesday, helped by strong overnight cues from the Wall Street. Investor sentiment was buoyed by hopes of central banks around the world continuing with monetary easing stance. The HANG SENG INDEX (INDEXHANGSENG:HIS) hit a seven-week high to close at 22737.01 points, while the NIKKEI 225 (INDEXNIKKEI:NI225) closed down 0.2 percent. The S&P/ASX 200 (INDEXASX:XJO) index closed at its highest level in nearly five years, helped by a rally in financial stocks. The SSE Composite Index (SHA:000001) (Shanghai Composite Index) is closed until Thursday for the Golden Week holiday.
Stocks in News
Herbalife Ltd. (NYSE:HLF)
Herbalife Ltd. (NYSE:HLF) posted first earnings excluding one-time items of $1.27 a share, easily beating the average analysts’ estimate of $1.09 a share. Sales rose 17 percent to $1.12 billion, also topping projections of $1.09 billion. In addition, the company handed in current-quarter earnings guidance that fell short, while full-year outlook was largely in line with expectations. Herbalife Ltd. (NYSE:HLF), which has been accused by hedge fund managers David Einhorn and Bill Ackman, of operating a pyramid scheme, said that the company’s growth speaks for itself. Shares jumped close to a percent in pre-market trading.
Pfizer Inc. (NYSE:PFE)
Pfizer Inc. (NYSE:PFE) reported first-quarter profit excluding certain items of 54 cents per share, one cent below estimates. Revenue fell 9 percent to $13.5 billion, trailing Street expectations of $13.99 billion. The drugmaker said that the drop in revenue was largely due to the loss of exclusivity of its Lipitor anti-cholesterol drug in Europe. Pfizer Inc. (NYSE:PFE) also lowered its full-year earnings forecast below current consensus due to weaker-than-expected sales and a stronger dollar.
Sprint Nextel Corporation (NYSE:S)
Sprint Nextel Corporation (NYSE:S) is unlikely to get an improved takeover bid from Softbank Corp (TYO:9984), after CEO Masayoshi Son said the Japanese telecom operator will not increase its $20.1 billion offer, made in October. Softbank is locked in a battle with Dish Network Corp (NASDAQ:DISH) to acquire the U.S. mobile operator. Dish Network Corp (NASDAQ:DISH) had earlier this month offered Sprint Nextel Corporation (NYSE:S) shareholders $4.76 in cash and about $2.24 in Dish stock for each Sprint share. Son slammed the offer saying it was based on “imaginary” numbers and would load the company with “insane” amounts of debt.
Express Scripts Holding Company (NASDAQ:ESRX)
Pharmacy benefit management organization Express Scripts Holding Company (NASDAQ:ESRX) posted first quarter earnings of 99 cents a share, excluding one-time items, on revenue of $26.06 billion, topping expectations for 97 cents a share on sales of $25.48 billion. The company also raised its full-year profit outlook by 3 cents to between $4.23 and $4.33 per share. Analysts on an average are projecting $4.26 per share. Shares rallied in early-hours trading.
Best Buy Co., Inc. (NYSE:BBY)
Troubled electronics retailer Best Buy Co., Inc. (NYSE:BBY) will sell its 50 percent stake in a European joint venture to partner Carphone Warehouse Group PLC (LON:CPW) for about 500 million pounds ($775 million). The transaction is expected to close by the end of June, and Best Buy Co., Inc. (NYSE:BBY) will receive 420 million pounds ($650 million) in cash and 80 million pounds in Carphone Warehouse stock. Best Buy Co., Inc. (NYSE:BBY) said that the deal will simplify its business, strengthen the group’s balance sheet and improve its return on capital.
Hartford Financial Services Group Inc (NYSE:HIG)
Hartford Financial Services Group Inc (NYSE:HIG) slid to a first quarter loss, as the insurer booked a hefty one-time charge related to an annuities hedging program in Japan. Operating earnings came in at 92 cents a share, 10 cents above the average analysts’ estimate. Revenue rose 20 percent to $9.18 billion, compared to expectations for $5.37 billion. Hartford Financial Services Group Inc (NYSE:HIG) booked a $541 million after-tax charge in the latest quarter to ensure that a once-troubled book of variable annuities sold to Japan savers was hedged against volatility.
Dell Inc. (NASDAQ:DELL)
Dell Inc. (NASDAQ:DELL) said venture capitalist James Breyer will retire from its board of directors. Breyer has been a director since 2009, and is the current chairman of its finance committee. Breyer’s decision to resign from the board comes as the computer maker pursues a $24.4 billion buyout offer from Silver Lake Management LLC and founder Michael Dell. Breyer had last week announced his decision to step down from the board of directors of Facebook Inc (NASDAQ:FB) and Wal-Mart Stores, Inc. (NYSE:WMT).
Sturm, Ruger & Company (NYSE:RGR)
Firearms maker Sturm, Ruger & Company (NYSE:RGR) posted record quarterly sales as fear of new gun control laws boosted sales. Sturm, Ruger & Company (NYSE:RGR) said first quarter profit jumped 53 percent to $23.7 million, or $1.20 a share, from $15.5 million, or 79 cents a share, in the year ago period. Revenue for the quarter increased 39 percent to $155.9 million from $112.3 million, a year ago. Analysts had projected earnings of $1.06 a share on $139.3 million in revenue. The company also declared a dividend of 49 cents a share, payable May 24 to shareholders of record on May 10.
Buffalo Wild Wings (NASDAQ:BWLD)
Buffalo Wild Wings (NASDAQ:BWLD) posted weak first quarter earnings, sending shares sharply lower in pre-market trading. Quarterly profit came in at 87 cents a share, missing the 99 cents expected by analysts, while revenue beat the consensus estimate by $1 million at $304 million. Same-store sales increased 2.2 percent at franchise outlets, and were up 1.4 percent at company-owned stores. For the full-year, Buffalo Wild Wings (NASDAQ:BWLD) said it expects net earnings growth of 17 percent, broadly in line with expectations.
Safeway Inc. (NYSE:SWY)
Safeway Inc. (NYSE:SWY) said company president Robert Edwards will succeed Steven Burd as chief executive when he retires next month. Edwards will also serve on Safeway Inc. (NYSE:SWY)’s board of directors. The supermarket chain had announced in January that Burd would step-down this spring after more than 20 years at the company. Shares in Safeway Inc. (NYSE:SWY) rose 0.1 percent to $23.54 in pre-market trading following the news.
Riverbed Technology, Inc. (NASDAQ:RVBD)
Riverbed Technology, Inc. (NASDAQ:RVBD) reported quarterly results below analysts’ estimates, hurt by higher acquisition-related costs from a year earlier. The computer networking products maker posted first quarter earnings of 23 cents a share on revenue of $253 million, trailing expectations for 24 cents a share on sales of $261 million. In addition, Riverbed Technology, Inc. (NASDAQ:RVBD) provided current-quarter outlook that fell short of expectations. Shares plunged in early-hours trading.
Spansion Inc. (NYSE:CODE)
Flash-memory manufacturer Spansion Inc. (NYSE:CODE) has agreed to acquire the microcontroller chip business of Japan’s FUJITSU Limited (TYO:6702) for $110 million to broaden its product line-up. As part of the deal, expected to be completed between July and September, Spansion Inc. (NYSE:CODE) will also buy inventory assets worth $65 million from Fujitsu. Shares of Spansion Inc. (NYSE:CODE) were unchanged before the open.
Economic Calendar for Tuesday, April 30, 2013:
07:45 A.M. ET: ICSC-Goldman Store Sales (Week ending Saturday, April 27)
08:30 A.M. ET: Employment Cost Index (Q1)
08:55 A.M. ET: Redbook Index (YoY) (April 21)
08:55 A.M. ET: Redbook Index (MoM) (April 21)
09:00 A.M. ET: S&P/Case-Shiller Home Price Indices (YoY) (February)
09:45 A.M. ET: Chicago Purchasing Managers’ Index (April)
10:00 A.M. ET: Consumer Confidence (April)
11:30 A.M. ET: 4-Week Bill Auction
11:30 A.M. ET: 52-Week Bill Auction
03:00 P.M. ET: Farm Prices (April)