Morning Market Update
Stocks that are expected to trade actively in U.S. markets on Tuesday include: Merck & Co., Inc. (NYSE:MRK), JPMorgan Chase & Co. (NYSE:JPM), Herbalife Ltd. (NYSE:HLF), Pfizer Inc. (NYSE:PFE), Mosaic Co (NYSE:MOS), Potash Corp./Saskatchewan (USA) (NYSE:POT), Express Scripts Holding Company (NASDAQ:ESRX), Community Health Systems (NYSE:CYH), Health Management Associates Inc (NYSE:HMA), Cummins Inc. (NYSE:CMI), Hartford Financial Services Group Inc (NYSE:HIG), Lockheed Martin Corporation (NYSE:LMT), HCA Holdings Inc (NYSE:HCA)
Chilton Capital's REIT Composite was up 6.1% last month, compared to the MSCI U.S. REIT Index, which gained 4.4%. Year to date, Chilton is up 6.3% net and 6.5% gross, compared to the index's 8.8% return. The firm met virtually with almost 40 real estate investment trusts last month and released the highlights of those Read More
US: Dow Futures: 15514.00 (0.20%), S&P 500 Futures: 1686.20 (0.22%), NASDAQ Futures: 3076.25 (0.35%)
Europe: CAC: 3990.56 (0.25%), DAX: 8291.08 (0.39%), FTSE: 6582.31 (0.34%)
Asia-Pacific: Australia: 5047.20 (0.02%), China: 1990.06 (0.69%), Hong Kong: 21953.96 (0.47%), Japan: 13869.82 (1.50%).
Metals: Gold: 1324.10 (-0.32%), Silver: 19.67 (-0.98%), Copper: 3.06 (-1.48%)
Energy: Crude Oil: 103.55 (-0.96%), Natural Gas: 3.46 (-0.35%)
Commodities: Corn: 4.77 (0.85%), Soya Bean: 12.15 (0.49%), Wheat: 6.56 (0.69%)
Currency: EUR/USD: 1.3287 (0.19%), GBP/USD: 1.5318 (-0.14%), USD/JPY: 97.8600 (-0.10%)
10-year US Treasury: 2.580% (-0.023)
Market and Economic News Update:
U.S. stock-index futures inch higher: U.S. stock-index futures are pointing to a higher open on Tuesday, as investors await data on home prices and consumer confidence. The Case-Shiller 20-city home-price composite for May is scheduled for release at 9 a.m. Eastern time. The Conference Board will issue its consumer-confidence index for July at 10 a.m. Eastern Time. Economists are forecasting a drop to 81.1 from 81.4 in June.
European markets rise: European markets gained in trade following some better than expected economic data. Economic sentiment in the euro zone rose to 92.5 in July from 91.3 in June, according to data from the European Commission. German consumer confidence also jumped to its highest level in nearly six years. In other news, Spanish economy contracted in the second quarter by a quarterly rate of 0.1 percent, according to preliminary data released by the country’s national statistics agency. The number was an improvement on the 0.5 percent contraction figure from the previous quarter. The CAC 40 (INDEXEURO:PX1) added 0.3 percent to 3990.56, while the DAX (INDEXDB:DAX) gained 0.4 percent to 8291.08. The FTSE 100 (INDEXFTSE:UKX) edged 0.3 percent higher to 6582.31 points. The euro zone blue-chip ESTX 50 PR.EUR (INDEXSTOXX:SX5E) (Euro Stoxx 50) was up 0.7 percent in recent trading.
Asian stocks end higher; Nikkei up 1.5%: The NIKKEI 225 (INDEXNIKKEI:NI225) snapped its four-day losing streak, as the Japanese yen weakened ahead of a key Federal Reserve meeting this week. The SSE Composite Index (SHA:000001) (Shanghai Composite Index) rose in trade but failed to close above the key psychological level of 2000, after China’s central bank injected funds into money markets for the first time since February. The S&P/ASX 200 (INDEXASX:XJO) index ended flat in a lackluster session of trade.
Stocks in News:
Merck & Co., Inc. (NYSE:MRK)
Merck & Co., Inc. (NYSE:MRK) said second-quarter profit fell to $906 million, or 30 cents a share, from $1.79 billion, or 58 cents a share, in the year-ago period. Excluding one-time items, the company reported profit of $2.53 billion, or 84 cents a share. Revenue dipped to $11.01 billion, from $12.31 billion in the same period last year. Analysts had projected the pharmaceuticals company to earn 82 cents a share on revenue of $11.24 billion. Sales of allergy drug Singulair, which lost market exclusivity, were down 80 percent, Merck said. The company reiterated its full-year 2013 earnings outlook. Shares were down in recent trading.
JPMorgan Chase & Co. (NYSE:JPM)
JPMorgan Chase & Co. (NYSE:JPM) has agreed to pay $410 million to settle allegations of energy market manipulation in California and the Midwest, the Federal Energy Regulatory Commission said in a statement on Tuesday. FERC investigators found that JPMorgan Ventures Energy Corporation engaged in 12 manipulative bidding strategies from September 2010 through November 2012.
Herbalife Ltd. (NYSE:HLF)
Herbalife Ltd. (NYSE:HLF)’s second-quarter profit rose 8.5 percent, helped by strong demand for its weight-loss shakes and supplements. Excluding one-time items, earnings came in at $1.41 a share, on sales of $1.22 billion, easily topping projections for $1.18 a share on revenue of $1.16 billion. Meanwhile, the company provided lighter-than-expected current quarter outlook, while full-year guidance was better than most analyst expectations. Shares soared in pre-market trading.
Pfizer Inc. (NYSE:PFE)
Pfizer Inc. (NYSE:PFE) reported better than expected quarterly earnings and reaffirmed its full-year financial outlook, sending shares higher in pre-market. Excluding items, earnings stood at 56 cents a share, on revenue of $12.97 billion, compared to the average analysts’ estimate of 55 cents a share on sales of $13.01 billion. The company has been trying to rebound from the 2011 loss of U.S. exclusivity for blockbuster cholesterol drug Lipitor, and recently announced plans to reorganize its commercial operations into three units.
Mosaic Co (NYSE:MOS), Potash Corp./Saskatchewan (USA) (NYSE:POT)
Shares of fertilizer producers Mosaic Co (NYSE:MOS) and Potash Corp./Saskatchewan (USA) (NYSE:POT) were hit hard this morning, after Russia’s Uralkali OAO (MCX:URKA), one of the world’s largest potash producers, cut its outlook for prices this year. Uralkali ended a joint venture partnership in Belarus, and expects the move will cause global potash prices to tumble by 25 percent.
Express Scripts Holding Company (NASDAQ:ESRX)
The pharmacy benefit manager posted second quarter adjusted earnings of $1.12 a share on sales of $26.43 billion, beating Street expectations for $1.10 a share on revenue of $25.52 billion. Express Scripts also lifted its current-year profit forecast to $4.26-$4.34 a share from its earlier view of $4.23-$4.33 a share. Shares gained in pre-market trading.
Community Health Systems (NYSE:CYH), Health Management Associates Inc (NYSE:HMA)
For-profit hospital operator Community Health Systems (NYSE:CYH) has agreed to buy smaller rival Health Management Associates Inc (NYSE:HMA) for $3.9 billion in cash and stock. Under the terms of the deal, Community Health will pay $13.78 per share in cash and its own stock for each share of Health Management Associates. The deal is expected to close by the end of the first quarter of 2014.
Cummins Inc. (NYSE:CMI)
The engine-maker posted second-quarter net income of $414 million, or $2.20 a share, down from $465 million, or $2.45 a share, in the year-ago period. Revenue increased to $4.53 billion from $4.45 billion a year earlier. Analysts had forecast earnings of $1.98 a share on revenue of $4.25 billion. In addition, the company said it now expects full-year revenue to be flat compared to 2012. Shares closed Monday at $116.44, and jumped in pre-open trading.
Hartford Financial Services Group Inc (NYSE:HIG)
The financial services company reported second quarter operating earnings of 66 cents a share, trailing expectations for 71 cents a share. Core earnings from the property and casualty business rose 39 percent, helped by better underwriting results. Revenue jumped 20 percent to $5.47 billion, edging past estimates of $5.46 billion. Shares declined in recent trading.
Lockheed Martin Corporation (NYSE:LMT)
Lockheed Martin Corporation (NYSE:LMT) has reportedly reached an agreement with the Pentagon on orders for the next two batches of F-35 fighter jets, in a deal valued at as much as $7 billion. Details of the deal will be finalized by the end of August, Reuters reported late yesterday. Lockheed is Pentagon’s largest supplier, and generates about 15 percent of its total revenues from the F-35 program.
HCA Holdings Inc (NYSE:HCA)
The hospital operator announced that CEO Richard Bracken will step down from his role at the end of the year. Milton Johnson, HCA Holdings Inc (NYSE:HCA)’s current president and chief financial officer, has been named the successor. Bracken will remain chairman of the company’s board. Shares were largely unchanged in early-hours trading following the announcement.
Economic Calendar for Tuesday, July 30, 2013:
07:45 A.M. ET: ICSC-Goldman Store Sales
08:55 A.M. ET: Redbook Index (MoM) (July 21)
08:55 A.M. ET: Redbook Index (YoY) (July 21)
09:00 A.M. ET: S&P/Case-Shiller Home Price Indices (YoY) (May)
10:00 A.M. ET: Consumer Confidence (July)
11:30 A.M. ET: 4-Week Bill Auction