Morning Market Update
Stocks that are expected to trade actively in U.S. markets on Tuesday include: E I Du Pont De Nemours And Co (NYSE:DD), United Parcel Service, Inc. (NYSE:UPS), Netflix, Inc. (NASDAQ:NFLX), Cisco Systems, Inc. (NASDAQ:CSCO), Sourcefire, Inc. (NASDAQ:FIRE), United Technologies Corporation (NYSE:UTX), Yahoo! Inc. (NASDAQ:YHOO), Texas Instruments Incorporated (NASDAQ:TXN), PacWest Bancorp (NASDAQ:PACW), CapitalSource, Inc. (NYSE:CSE), Sanmina Corp (NASDAQ:SANM), Biogen Idec Inc (NASDAQ:BIIB), Rent-A-Center Inc (NASDAQ:RCII)
Mohnish Pabrai Returns 10.1% In 2020, Changes Strategy [2020 Letter]
Mohnish Pabrai's flagship hedge fund, the Pabrai Investment Fund II, returned 29.6% in the second half of 2020. Following this performance, the fund returned 10.1% net for the year, underperforming the S&P 500 but outperforming the Dow Jones Industrial Average, which returned just 9.7%. According to a copy of the investment manager's year-end letter to Read More
US: Dow Futures: 15534.00 (0.14%), S&P 500 Futures: 1692.70 (0.14%), NASDAQ Futures: 3054.50 (0.23%)
Europe: CAC: 3947.21 (0.18%), DAX: 8350.21 (0.25%), FTSE: 6635.28 (0.19%)
Asia-Pacific: Australia: 5017.10 (0.30%), China: 2043.88 (1.91%), Hong Kong: 21915.42 (2.28%), Japan: 14778.51 (0.82%).
Metals: Gold: 1329.70 (-0.47%), Silver: 20.18 (-1.58%), Copper: 3.18 (-0.20%)
Energy: Crude Oil: 106.06 (-0.82%), Natural Gas: 3.67 (-0.24%)
Commodities: Corn: 4.91 (-0.20%), Soya Bean: 12.89 (1.22%), Wheat: 6.55 (-0.75%)
Currency: EUR/USD: 1.3191 (0.04%), GBP/USD: 1.5344 (-0.10%), USD/JPY: 99.9900 (0.32%)
10-year US Treasury: 2.516% (0.036)
Market and Economic News Update:
U.S. stock-index futures rise: U.S. stock-index futures are pointing to a higher open on Tuesday following some better than expected corporate earnings. Apple Inc. (NASDAQ:AAPL) will report quarterly results after the close of trading, with analysts expecting a $7.32 per share profit, on $35 billion in revenue. On the economic front, the Federal Housing Finance Agency’s home price data and Richmond Federal Reserve survey will be released at 10 A.M. ET.
European markets gain: European markets are up in trade, mirroring gains in Asia. In the U.K., analysts expect the birth of the royal baby to provide a positive boost to the domestic economy. Elsewhere in Europe, Spanish Prime Minister Mariano Rajoy will face parliamentary questioning over a corruption scandal. The CAC 40 (INDEXEURO:PX1) added 0.2 percent to 3947.21, while the DAX (INDEXDB:DAX) gained 0.3 percent to 8350.21. The FTSE 100 (INDEXFTSE:UKX) edged 0.2 percent higher to 6635.28 points. The euro zone blue-chip ESTX 50 PR.EUR (INDEXSTOXX:SX5E) (Euro Stoxx 50) was up 0.5 per cent in recent trading.
Asian stocks rise; Chinese markets rally: A rally in Chinese stocks helped Asia markets extend gains, as investor speculation grew that Beijing would adopt stimulus measures to boost the slowing economy. The SSE Composite Index (SHA:000001) (Shanghai Composite Index) rose 2 percent following supportive comments from China’s Premier Li Keqiang. The NIKKEI 225 (INDEXNIKKEI:NI225) rebounded from lows made earlier in the session after the Japanese government raised its economic outlook for a third consecutive month. The S&P/ASX 200 (INDEXASX:XJO) index hit a new two-month high on Tuesday, helped by a rally in gold mining stocks.
Stocks in News:
E I Du Pont De Nemours And Co (NYSE:DD)
The Dow component posted second-quarter net income of $1.03 billion, or $1.11 a share, compared with a year-ago profit of $1.17 billion, or $1.23 a share. Excluding one-time items, earnings per share came in at $1.28, down from $1.50 a year earlier. Revenue fell to $10 billion from $10.21 billion in the same period last year. Analysts had projected earnings of $1.27 per share on revenue of $10.04 billion. The chemicals major backed its operating EPS view for the year. Shares were up 0.6% in pre-market trading.
United Parcel Service, Inc. (NYSE:UPS)
United Parcel Service, Inc. (NYSE:UPS) reported a 4 percent decline in second quarter profit, largely due to a customer shift to cheaper shipping services. Excluding items, earnings were $1.13 per share, in line with estimates. Revenue increased 1.2 percent to $13.51 billion, trailing estimates of $13.59 billion. Shares fell following the quarterly numbers.
Netflix, Inc. (NASDAQ:NFLX)
The Internet-video streaming company posted second-quarter earnings of 49 cents per share, easily topping the consensus estimate of 40 cents per share. Revenue for the period stood at $1.07 billion, in line with expectations. Netflix added 630,000 new subscribers to its U.S. streaming service, short of the 700,000 that Wall Street was expecting. Shares are sharply lower in recent trading.
Cisco Systems, Inc. (NASDAQ:CSCO), Sourcefire, Inc. (NASDAQ:FIRE)
Cisco Systems, Inc. (NASDAQ:CSCO) has agreed to buy cyber security company Sourcefire, Inc. (NASDAQ:FIRE) in a deal worth about $2.7 billion. Under the terms of the deal, Cisco will pay $76 per share for the company, 28.6 percent higher than its Monday closing price of $59.08. The deal is expected to close during the second half of the year. Shares of Cisco and Sourcefire were largely unchanged in pre-market trade.
United Technologies Corporation (NYSE:UTX)
United Technologies Corporation (NYSE:UTX) reported second-quarter adjusted earnings of $1.70 per share, easily topping the average analysts’ estimate of $1.57 per share. Net sales for the period rose to $16 billion from $13.8 billion, a year earlier. Analysts had expected revenue of $16.37 billion. In addition, the company raised the lower end of full-year earnings estimate to a range of $6.00 to $6.15 per share, from its earlier guidance of $5.85 to $6.15 per share.
Yahoo! Inc. (NASDAQ:YHOO)
Mickie Rosen, head of global media at Yahoo, is leaving the company this Friday, according to a regulatory filing. AllThingsD reported late yesterday that there may be some more departures in the coming days, as lucrative stock options vest for several high-ranking executives. Shares of Yahoo are up in recent trading.
Texas Instruments Incorporated (NASDAQ:TXN)
Texas Instruments Incorporated (NASDAQ:TXN) reported better than expected quarterly earnings as demand for chips from automakers and industrial companies more than offset a slump in the personal-computers market. Excluding items, second quarter earnings came in at 42 cents per share beating forecasts by a penny. Revenue dropped to $3.05 billion from 3.34 billion, versus forecasts for $3.06 billion. For the current quarter, the company projected earnings of 49 to 57 cents per share on revenue of $3.09 billion to $3.35 billion. Shares rose in recent trading.
PacWest Bancorp (NASDAQ:PACW), CapitalSource, Inc. (NYSE:CSE)
PacWest Bancorp (NASDAQ:PACW) has agreed to buy CapitalSource, Inc. (NYSE:CSE) for about $2.29 billion in cash and stock to create one of the largest commercial banks in California. Under the terms of the deal, CapitalSource shareholders will receive $2.47 in cash and 0.2837 PacWest share for each share held. The transaction values CapitalSource at about $11.68 per share, 18 percent more than yesterday’s closing price.
Sanmina Corp (NASDAQ:SANM)
The integrated manufacturing-solutions provider posted third-quarter earnings excluding items of 40 cents per share, 5 cents above the average analyst’ estimate. Revenue came in at $1.49 billion compared to expectations for $1.48 billion. For the current quarter, the company forecast earnings of between 37 cents and 43 cents per share on revenue of $1.475 billion to $1.525 billion. Shares rallied in early trade.
Biogen Idec Inc (NASDAQ:BIIB)
Biogen Idec Inc (NASDAQ:BIIB) said that the death of a 59-year-old woman last week, who had taken the company’s new multiple sclerosis drug, Tecfidera, was unlikely to be linked to the medicine. Tecfidera was launched in April, and analysts expect the drug to become the No. 1 oral treatment for the disease.
Rent-A-Center Inc (NASDAQ:RCII)
Rent-A-Center Inc (NASDAQ:RCII) reported second quarter earnings of 76 cents per share on revenue of $760.5 million, compared to analysts’ expectations for earnings of 75 cents a share and sales of $779 million. Same-store sales fell 1.2 percent amid weakness at its U.S. unit. In addition, the country’s largest rent-to-own operator raised its full-year guidance to $3.03 to $3.15 per share, sending shares higher in pre-market trading.
Economic Calendar for Tuesday, July 23, 2013:
07:45 A.M. ET: ICSC-Goldman Store Sales
08:55 A.M. ET: Redbook Index (MoM) (July 14)
08:55 A.M. ET: Redbook Index (YoY) (July 14)
10:00 A.M. ET: FHFA Housing Price Index (MoM) (May)
10:00 A.M. ET: Richmond Fed Manufacturing Index (July)
11:30 A.M. ET: 4-Week Bill Auction
11:30 A.M. ET: 52-Week Bill Auction
01:00 P.M. ET: 2-Year Note Auction