Morning Market Update
Stocks that are expected to trade actively in U.S. markets on Tuesday include: Bank of America Corp (NYSE:BAC), MBIA Inc. (NYSE:MBI), The Walt Disney Company (NYSE:DIS), Electronic Arts Inc. (NASDAQ:EA), Microsoft Corporation (NASDAQ:MSFT), First Solar, Inc. (NASDAQ:FSLR), Hertz Global Holdings, Inc. (NYSE:HTZ), Anadarko Petroleum Corporation (NYSE:APC), OfficeMax Inc (NYSE:OMX), DIRECTV (NASDAQ:DTV), QUALCOMM, Inc. (NASDAQ:QCOM), Discovery Communications Inc. (NASDAQ:DISCA), Fossil Inc (NASDAQ:FOSL) and Scotts Miracle-Gro Co (NYSE:SMG).
• US: Dow Futures: 14936.00 (0.20%), S&P 500 Futures: 1616.30 (0.18%), NASDAQ Futures: 2954.50 (0.24%)
• Europe: CAC: 3937.36 (0.77%), DAX: 8188.88 (0.94%), FTSE: 6548.23 (0.41%)
• Asia-Pacific: Australia: 5166.20 (-0.48%), China: 2235.57 (0.20%), Hong Kong: 23047.09 (0.57%), Japan: 14180.24 (3.43%).
• Metals: Gold: 1450.10 (-1.22%), Silver: 23.50 (-1.90%), Copper: 3.29 (-0.51%)
• Energy: Crude Oil: 95.86 (-0.31%), Natural Gas: 3.97 (-0.97%)
• Commodities: Corn: 6.37 (-3.74%), Soya Bean: 13.76 (-1.30%), Wheat: 7.06 (-2.29%)
• Currency: EUR/USD: 1.3112 (0.28%), GBP/USD: 1.5530 (-0.06%), USD/JPY: 99.2100 (-0.12%)
• 10 year US Treasury: 1.784% (0.024)
Market and Economic News Update
U.S. stock-index futures rise: U.S. stock-index futures are pointing to a higher open on Tuesday, helped by strong gains in Europe and Japan. On the economic front, the Federal Reserve will release its March consumer credit report at 3 P.M. ET. Economists are forecasting a $15 billion gain.
European markets gain: European markets are up in trade with banks rallying, after HSBC Holdings plc (ADR) (NYSE:HBC) and Societe Generale SA (EPA:GLE) reported better-than-expected earnings. In economic news, French industrial output witnessed a -0.9 percent month-on-month decline in March, against analysts’ estimates for a 0.3 contraction. German industrial orders for March stood at 2.2 percent, better than expectations for a 0.5 percent contraction. The FTSE 100 (INDEXFTSE:UKX) edged 0.4 percent higher to 6548.23 points. The DAX (INDEXDB:DAX) and the CAC 40 (INDEXEURO:PX1) are gained close to a percent. The euro zone blue-chip ESTX 50 PR.EUR (INDEXSTOXX:SX5E) (Euro Stoxx 50) jumped 0.9 percent.
Asian markets mixed; Tokyo stocks rally: Asian stocks closed mixed on Tuesday, with the NIKKEI 225 (INDEXNIKKEI:NI225) ending at its highest level in almost five years, helped by a weaker yen. The S&P/ASX 200 (INDEXASX:XJO) index lost in trade after the country’s central bank announced a surprise rat cut. The Reserve Bank of Australia slashed its main cash rate by 25 basis points to a record low of 2.75 percent. The SSE Composite Index (SHA:000001) (Shanghai Composite Index) posted a gain for the third straight session, while the HANG SENG INDEX (INDEXHANGSENG:HSI) edged 0.6 percent higher in a choppy session of trade.
Stocks in News
Bank of America Corp (NYSE:BAC), MBIA Inc. (NYSE:MBI)
Bank of America Corp (NYSE:BAC) has agreed to pay $1.6 billion in cash to MBIA Inc. (NYSE:MBI) to settle a long-running dispute over faulty mortgage securities issued during the US housing boom. As part of the deal, Bank of America will lend MBIA as much as $500 million and will have the option to buy a stake of up to 4.9 percent in the bond insurer.
The Walt Disney Company (NYSE:DIS), Electronic Arts Inc. (NASDAQ:EA)
The Walt Disney Company (NYSE:DIS) and videogames publisher Electronic Arts Inc. (NASDAQ:EA) have announced a multi-year exclusive licensing agreement to develop games based on science-fiction franchise Star Wars. Financial terms of the deal were not disclosed. Disney and Electronic Arts are also scheduled to report quarterly results late Tuesday. Shares of both companies gained in early-hours trading.
Microsoft Corporation (NASDAQ:MSFT)
Microsoft Corporation (NASDAQ:MSFT) will introduce an update to its Windows 8 operating system, code-named ‘Windows Blue’, by the end of this year. Microsoft Corp has sold 100 million Windows 8 licenses in the six months since launch, but sputtering interest in its flagship software, has forced the company to address some of the problems people have when using it.
First Solar, Inc. (NASDAQ:FSLR)
First Solar, Inc. (NASDAQ:FSLR) posted first quarter earnings excluding items of 69 cents a share on sales of $755 million, compared to expectations of 75 cents a share on sales of $725 million. The U.S. solar company also reaffirmed its full-year 2013 financial guidance. Shares declined in pre-market trading.
Hertz Global Holdings, Inc. (NYSE:HTZ)
Hertz Global Holdings, Inc. (NYSE:HTZ) said that private equity funds run by Clayton, Dubilier & Rice, Carlyle Group LP (NASDAQ:CG) and Bank of America Merrill Lynch have sold-off their remaining shares in the company for $1.24 billion, eight years after they acquired the business from Ford Motor Company (NYSE:F). The private-equity backers sold 49.8 million shares of the car rental company at $24.96 each to Goldman Sachs Group, Inc. (NYSE:GS), which will re-offer the shares to investors, Hertz said in a statement.
Anadarko Petroleum Corporation (NYSE:APC)
Anadarko Petroleum Corporation (NYSE:APC) reported better than expected quarterly results, sending shares higher in early trade. First quarter earnings excluding one-time items were $1.08 a share, compared to the average analysts’ estimate of 94 cents a share. Revenue increased 13 percent to $3.89 billion, also topping expectations for $3.49 billion. In addition, the Houston company raised the top end of its full-year production forecast.
OfficeMax Inc (NYSE:OMX)
OfficeMax Inc (NYSE:OMX) declared a special dividend of $1.50 per share, sending shares higher in pre-market trading. The office products retailer said first-quarter profit rose to $56.84 million, or 64 cents a share, from $5.39 million, or 6 cents a share, in the year-ago period. Revenue declined to $1.77 billion, from $1.87 billion a year earlier. Additionally, the company expects continued sales declines in 2013.
DIRECTV (NASDAQ:DTV)’s first quarter earnings topped estimates after the satellite television provider added more subscribers than analysts’ projections. Excluding certain items, the company earned $1.43 per share, well above estimates of $1.07 a share. Sales rose 7.6 percent to $7.58 billion, beating the consensus estimate of $7.52 billion. DirecTV added 604,000 net subscribers during the quarter. The company added 21,000 U.S. subscribers and 583,000 customers in Latin America, compared with the 10,000 and 505,000, respectively, that analysts had predicted.
QUALCOMM, Inc. (NASDAQ:QCOM)
QUALCOMM, Inc. (NASDAQ:QCOM) has named Jon Rubinstein to its board of directors. Rubinstein was the former CEO at wireless device maker Palm Inc., which was acquired by Hewlett-Packard Company (NYSE:HPQ) in 2010. Earlier in his career, Rubinstein ran Apple Inc.(NASDAQ:AAPL)’s iPod division. QUALCOMM, Inc. (NASDAQ:QCOM) shares closed Monday at $63.86, and were inactive in pre-market trading.
Discovery Communications Inc. (NASDAQ:DISCA)
Discovery Communications Inc. (NASDAQ:DISCA) earned 64 cents per share, excluding certain items, for its first quarter, in line with expectations, while revenue was above Wall Street estimates. The media company’s international networks revenue jumped, but overall margins narrowed sharply amid higher expenses. Class A shares of Discovery closed Monday at $79.02 and were inactive in recent pre-market trading.
Fossil Inc (NASDAQ:FOSL)
Fossil Inc (NASDAQ:FOSL) reported first-quarter profit of $1.10 per share, compared to the average analysts’ estimate of 97 cents a share. Revenue jumped 16 percent to $680.9, also above consensus. The fashion accessories maker raised its full-year earnings outlook and backed its sales guidance for the year. Shares closed Monday at $98.96 and soared in pre-market trading.
Scotts Miracle-Gro Co (NYSE:SMG)
Scotts Miracle-Gro Co (NYSE:SMG) reported fiscal second quarter earnings of $1.60 a share on sales of $1.02 billion, trailing expectations for $2 a share on revenue of $1.13 billion. The lawn-and-garden products maker said that a colder than normal March significantly delayed the start of the gardening season in nearly all North American and European markets. Shares fell in early-hours trading.
Economic Calendar for Tuesday, May 07, 2013:
07:45 A.M. ET: ICSC-Goldman Store Sales (Week ending Saturday, May 04)
08:55 A.M. ET: Redbook Index (MoM) (April 28)
08:55 A.M. ET: Redbook Index (YoY) (April 28)
11:30 A.M. ET: 4-Week Bill Auction
11:30 A.M. ET: 3-Yr Note Auction
03:00 P.M. ET: Consumer Credit Change (March)