Morning Market Update
Stocks that are expected to trade actively in U.S. markets on Wednesday include: The Walt Disney Company (NYSE:DIS), DaVita HealthCare Partners Inc (NYSE:DVA), Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B), AOL, Inc. (NYSE:AOL), McDonald’s Corporation (NYSE:MCD), J. C. Penney Company, Inc. (NYSE:JCP), Microsoft Corporation (NASDAQ:MSFT), Yahoo! Inc. (NASDAQ:YHOO), Electronic Arts Inc. (NASDAQ:EA), Herbalife Ltd. (NYSE:HLF), Tripadvisor Inc (NASDAQ:TRIP), Plum Creek Timber Co. Inc. (NYSE:PCL), Symantec Corporation (NASDAQ:SYMC) and Zillow Inc (NASDAQ:Z).
• US: Dow Futures: 14979.00 (-0.03%), S&P 500 Futures: 1619.20 (-0.09%), NASDAQ Futures: 2946.00 (-0.02%)
• Europe: CAC: 3947.15 (0.65%), DAX: 8210.30 (0.35%), FTSE: 6566.41 (0.14%)
• Asia-Pacific: Australia: 5199.80 (1.09%), China: 2246.30 (0.48%), Hong Kong: 23244.35 (0.85%), Japan: 14285.69 (0.74%).
• Metals: Gold: 1467.30 (1.28%), Silver: 23.95 (0.60%), Copper: 3.38 (2.45%)
• Energy: Crude Oil: 95.69 (0.07%), Natural Gas: 3.95 (0.84%)
• Commodities: Corn: 6.38 (0.27%), Soya Bean: 13.787 (1.10%), Wheat: 7.08 (0.68%)
• Currency: EUR/USD: 1.3161 (0.63%), GBP/USD: 1.5507 (0.21%), USD/JPY: 98.7000 (-0.30%)
• 10 year US Treasury: 1.773% (-0.005)
Morning Market and Economic News Update
U.S. stock-index futures largely unchanged: U.S. stock-index futures are pointing to a flat open on Wednesday, as investors take a breather following another record session for Wall Street on Tuesday. In economic news, weekly mortgage applications rose last week amid a drop in interest rates, according to the Mortgage Bankers Association.
European markets gain: European markets are up in trade, helped by better than expected German industrial data. Germany’s industrial output in March jumped to 1.2 percent month-on-month, official data showed on Wednesday. Analysts had predicted a 0.1 percent decline. The DAX (INDEXDB:DAX) extended its gains from yesterday, when it reached an all-time record high. The CAC 40 (INDEXEURO:PX1) rose 0.7 percent to 3947.15 points, while the FTSE 100 (INDEXFTSE:UKX) is up 0.1 percent. The euro zone blue-chip ESTX 50 PR.EUR (INDEXSTOXX:SX5E) (Euro Stoxx 50) is trading around the flat-line.
Asian markets end higher: Asian stocks closed higher on Wednesday, with the NIKKEI 225 (INDEXNIKKEI:NI225) ending at its highest level in five years, after Chinese exports in April exceeded forecasts. The S&P/ASX 200 (INDEXASX:XJO) index gained in trade, helped by a rally in resource stocks. The SSE Composite Index (SHA:000001) (Shanghai Composite Index) posted a gain for the fourth straight session, while the HANG SENG INDEX (INDEXHANGSENG:HSI) edged 0.9 percent higher to close at an eight-week high.
Stocks in News
The Walt Disney Company (NYSE:DIS)
The Walt Disney Company (NYSE:DIS) reported second quarter earnings of 79 cents a share on revenue of $10.55 billion, edging past expectations for 77 cents a share on sales of $10.49 billion. Shares gained in early morning trade. The entertainment conglomerate witnessed growth in all its primary business segments, which more than offset weakness in the ABC broadcast network and its video game division.
DaVita HealthCare Partners Inc (NYSE:DVA), Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B)
Warren Buffett’s Berkshire Hathaway Inc. (BRK.A) (NYSE:BRK.B) and dialysis provider DaVita HealthCare Partners Inc (NYSE:DVA) have entered into an agreement under which Berkshire will not acquire more than 25 percent of the company. Berkshire Hathaway Inc. (BRK.A) (NYSE:BRK.B) has also agreed not to push for board seats or engage in proxy fights with the company. Berkshire is DaVita’s largest shareholder with a stake of about 14 percent. DaVita HealthCare Partners Inc (NYSE:DVA) shares rose $4.07, or 3.5 percent, to $121.63 in pre-market trading after the agreement was disclosed.
AOL, Inc. (NYSE:AOL)
AOL, Inc. (NYSE:AOL) posted first-quarter earnings of 32 cents per share, one cent below estimates. Revenue topped consensus, helped by an increase in display advertising sales. Revenue from display ads increased 8 percent to $140.4 million. Shares fell 5 percent in pre-market trading after results
McDonald’s Corporation (NYSE:MCD)
McDonald’s Corporation (NYSE:MCD) said April sales at stores open at least 13 months declined 0.6 percent amid challenging global economic conditions. Analysts were expecting a 0.5 percent drop. Same-store sales in the U.S. increased 0.7 percent, against analysts’ estimate of a 0.05 percent decline. The Asia-Pacific, Middle-East and Africa region posted 2.9 percent lower same-store sales, while Europe witnesses a 2.4 percent fall in same-store sales.
J. C. Penney Company, Inc. (NYSE:JCP)
J. C. Penney Company, Inc. (NYSE:JCP) expects to post first quarter revenue of $2.64 billion against current expectations for $2.74 billion, partially blaming losses on the controversial strategies of departed Chief Executive Ron Johnson. In addition, the struggling department-store operator said it sees same-store sales falling 17 percent from the same quarter a year earlier. The full results are scheduled to be released on May 16. Shares closed Tuesday at $16.40 and were 3 percent higher pre-market.
Microsoft Corporation (NASDAQ:MSFT), Yahoo! Inc. (NASDAQ:YHOO)
Microsoft Corporation (NASDAQ:MSFT) has renewed its deal with Yahoo! Inc. (NASDAQ:YHOO) to be the web portal’s exclusive search provider. Under the terms of the deal, first signed in 2009, Microsoft will continue to pay Yahoo a guarantee for the revenue-per-search. Yahoo shares were last trading up 3 percent, while Microsoft was down close to a percent.
Electronic Arts Inc. (NASDAQ:EA)
Electronic Arts Inc. (NASDAQ:EA) reported fourth quarter earnings of 55 cents a share, trailing the consensus estimate by 2 cents a share, on sales of $1.04 billion, edging past expectations for $1.03 billion. Meanwhile, the video game publisher provided current-quarter outlook that missed Street projections, and full-year guidance that was mixed. Despite the disappointing results, shares jumped in early-hours trading.
Herbalife Ltd. (NYSE:HLF)
Billionaire investor Carl Icahn disclosed a 16.5 percent stake in Herbalife Ltd. (NYSE:HLF), up from 15.9 percent as of March 7, according to a 13D/A filing. Shares have been rallying since the nutritional-supplement maker announced better-than-expected earnings a week ago. Last month, Herbalife Ltd. (NYSE:HLF) voted to elect two board nominees backed by Icahn.
Tripadvisor Inc (NASDAQ:TRIP)
Tripadvisor Inc (NASDAQ:TRIP) posted first-quarter profit of 50 cents per share, excluding certain items, four cents above estimates, with revenue also topping consensus. TripAdvisor’s click-based advertising revenue jumped 24 percent from a year earlier to $179.4 million. Separately, the travel website has agreed to acquire vacation rentals website Niumba.com for an undisclosed amount. Shares fell in morning trade.
Plum Creek Timber Co. Inc. (NYSE:PCL)
Plum Creek Timber Co. Inc. (NYSE:PCL) raised its quarterly dividend by 5 percent to 44 cents a share from 42 cents a share. The dividend is payable on Friday, May 31, to shareholders of record on Friday, May 17. Shares of the real estate investment trust were largely unchanged in pre-market trading.
Symantec Corporation (NASDAQ:SYMC)
Symantec Corporation (NASDAQ:SYMC) forecast lower than expected first-quarter sales and profit, citing a weak Japanese yen, sending shares lower in pre-market trading. For the current period, the security software maker reported an adjusted profit of 44 cents per share, six cents above the average analysts estimate. Revenue also topped projections. Additionally, Symantec expects first-quarter adjusted profit of 35 cents to 36 cents per share, on revenue of $1.61 billion to $1.65 billion. Analysts were expecting an adjusted profit of 44 cents per share on revenue of $1.70 billion
Zillow Inc (NASDAQ:Z)
Zillow Inc (NASDAQ:Z) reported a first quarter loss of 11 cents a share on revenue of $39 million compared to forecasts for a loss of 3 cent a share on sales of $37 million. In addition, the online real estate database also raised its full-year revenue outlook. Shares fell in early-hours trading.
Economic Calendar for Wednesday, May 08, 2013:
07:00 A.M. ET: MBA Purchase Applications (Week ending Friday, May 03)
09:30 A.M. ET: Federal Reserve Governor Jeremy Stein speaks.
10:30 A.M. ET: EIA Petroleum Status Report (Week ending Friday, May 03)
01:00 P.M. ET: 10-Yr Note Auction