Morning Market Update
Stocks that are expected to trade actively in U.S. markets on Tuesday include: American Eagle Outfitters (NYSE:AEO), The Washington Post Company (NYSE:WPO), Archer Daniels Midland Company (NYSE:ADM), General Motors Company (NYSE:GM), McDermott International (NYSE:MDR), Sony Corporation (ADR) (NYSE:SNE) (TYO:6758), DSW Inc. (NYSE:DSW), Alliant Techsystems Inc. (NYSE:ATK), Molson Coors Brewing Company (NYSE:TAP), Revlon Inc (NYSE:REV)
US: Dow Futures: 15533.00 (-0.14%), S&P 500 Futures: 1700.75 (-0.12%), NASDAQ Futures: 3136.25 (0.01%)
Europe: CAC: 4060.97 (0.25%), DAX: 8395.17 (-0.04%), FTSE: 6628.87 (0.15%)
Asia-Pacific: Australia: 5105.60 (-0.11%), China: 2060.50 (0.49%), Hong Kong: 21923.70 (-1.36%), Japan: 14401.06 (0.99%).
Metals: Gold: 1285.30 (-1.31%), Silver: 19.62 (-0.53%), Copper: 3.20 (0.95%)
Energy: Crude Oil: 106.99 (0.40%), Natural Gas: 3.34 (0.75%)
Commodities: Corn: 4.59 (-0.49%), Soya Bean: 11.76 (-0.13%), Wheat: 6.48 (-2.35%)
Currency: EUR/USD: 1.3304 (0.35%), GBP/USD: 1.5351 (-0.03%), USD/JPY: 98.1200 (-0.18%)
10-year US Treasury: 2.637% (0.004)
Market and Economic News Update:
U.S. stock-index futures slightly lower: U.S. stock-index futures are pointing to a slightly lower open on Tuesday as investors look for fresh catalysts to steer the market higher. On the economic front, the U.S. trade deficit fell 22.4 percent to $34.2 billion in June, the smallest gap since October 2009, according to the Commerce Department. Economists had projected the trade deficit to narrow to $43.5 billion. Meanwhile, analysts will closely watch comments from Chicago Fed President Charles Evans at 1 P.M. ET, for clues on when the central bank might begin tapering its bond-buying program.
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European markets mostly higher: European markets edged higher following better than expected economic data. U.K. industrial output rose 1.1 percent from May, the Office for National Statistics said today, topping economists’ expectations of a 0.7 percent increase. In other economic news, Italy’s gross-domestic-product fell 0.2 percent in the second quarter, compared with a 0.6 percent contraction in the first quarter. The CAC 40 (INDEXEURO:PX1) added 0.3 percent to 4060.97, while the DAX (INDEXDB:DAX) was largely unchanged at 8395.17. The FTSE 100 (INDEXFTSE:UKX) edged 0.2 percent higher to 6628.87 points. The euro zone blue-chip ESTX 50 PR.EUR (INDEXSTOXX:SX5E) (Euro Stoxx 50) was up 0.2 percent in recent trading.
Asian stocks mixed; Nikkei up 1%: Asian markets struggled for direction in a choppy session of trade on Tuesday. The SSE Composite Index (SHA:000001) (Shanghai Composite Index) bucked the trend to hit a new three-week high, extending its five-day winning streak. The NIKKEI 225 (INDEXNIKKEI:NI225) reversed earlier losses to close at the high of the day as dollar-yen rose above the 98-mark. The S&P/ASX 200 (INDEXASX:XJO) index closed flat as the Reserve Bank of Australia slashed interest rates to a record low of 2.5 percent.
Stocks in News:
American Eagle Outfitters (AEO)
American Eagle Outfitters (NYSE:AEO) slashed its earnings guidance for the second quarter citing weaker-than-expected sales. Shares plunged sharply in pre-market trading following the announcement. The teen retailer now expects earnings of about 10 cents per share, disappointing analysts, who, on average, were expecting profit of 21 cents per share. CEO Robert Hanson said results were hurt by disappointing sales in its women’s department.
The Washington Post Company (WPO)
The newspaper company will sell its publishing businesses for $250 million, including the iconic U.S. daily, The Washington Post, to Amazon.com founder Jeff Bezos. The deal is expected to close later in the year year. The newspaper, however, will not be a part of the online retailer, and Bezos will be handling the deal individually. Shares of The Washington Post Co soared in early-hours trading.
Archer Daniels Midland Company (ADM)
Archer Daniels Midland Company (NYSE:ADM) said second-quarter profit fell to $223 million, or 34 cents a share, from $284 million, or 43 cents a share, in the year-ago period. Excluding certain items, the company earned 46 cents per share, compared to 38 cents per share a year earlier. Revenue dipped to $22.5 billion, from $22.7 billion in the same period last year. , Analysts had expected the agricultural company to earn 43 cents a share on revenue of $22.69 billion. Shares were down in recent pre-market trading.
General Motors Company (GM)
General Motors Company (NYSE:GM) announced that it will cut the price of the 2014 Chevrolet Volt by $5,000, making it the latest electric car to be steeply discounted, following similar price reductions for Nissan Leaf and Ford’s Focus Electric. The Volt will now cost $34,995, 12.5 percent less than last year’s model. GM had cut the price of the 2013 Volt by around $4,000 in June in response to sluggish demand.
McDermott International (MDR)
McDermott International (NYSE:MDR) lost 63 cents per share for the second quarter, surprising analysts who had expected a profit of three cents a share. Revenue tumbled 27 percent to $647.3 million, also trailing estimates of $757.7 million. In addition, the engineering and construction company said chief operating officer John McCormack will be retiring later this year. Shares plunged in pre-open session.
Sony Corporation (ADR) (SNE)
Japan’s Sony Corporation (ADR) (NYSE:SNE) (TYO:6758) rejected a proposal from Daniel Loeb to spin-off part of its profitable entertainment business. Sony CEO Kazuo Hirai Kazuo Hirai said in a letter to Loeb, told made public late on Monday, that full-ownership of the film, television and music units was fundamental to the company’s strategy for revival. Loeb’s Third Point LLC, which holds a 7 percent stake in the company, had in May proposed selling as much as 20 percent of the entertainment assets in an initial public offering.
DSW Inc. (DSW)
DSW Inc. (NYSE:DSW) raised its full-year earnings outlook to between $3.60 and $3.80 a share compared to Street estimates for $3.59 a share. In addition, the footwear retailer said it expects to record second quarter sales of $585 million versus projections for $568 million. The company also announced a two-for-one stock split. Shares rose in pre-market trading.
Alliant Techsystems Inc. (ATK)
Reuters reported late yesterday that the defense products supplier is in advanced talks to buy optics maker Bushnell Outdoor Products in a deal worth roughly $1 billion. Bushnell Outdoor, owned by buyout firm MidOcean Partners, makes binoculars, night vision equipment and GPS devices. ATK shares closed Monday at $96.36 and were inactive in recent trading.
Molson Coors Brewing Company (TAP)
Molson Coors Brewing Company (NYSE:TAP)’s second-quarter profit rose to $278.4 million, or $1.51 a share, from $105.2 million, or 57 cents a share, in the same period last year. Sales increased to $1.66 billion from $1.44 billion in the year-ago period. Analysts had forecast earnings of $1.40 a share on revenue of $1.23 billion. The beer brewer said worldwide beer volumes rose 20 percent during the period. Meanwhile, CEO Peter Swinburn said the company expects weak consumer demand to remain sluggish for the rest of the year.
Revlon Inc (REV)
The cosmetics company will buy Spanish hair dye maker, The Colomer Group, for $660 million from CVC Capital Partners to increase its presence in the professional salon channel. The deal is expected to close during the fourth quarter of the year, and Revlon will finance the acquisition using funds underwritten by Citigroup Inc (NYSE:C).
Economic Calendar for Tuesday, August 06, 2013:
07:45 A.M. ET: ICSC-Goldman Store Sales
08:30 A.M. ET: Trade Balance (June)
08:55 A.M. ET: Redbook Index (YoY) (July 28)
08:55 A.M. ET: Redbook Index (MoM) (July 28)
10:00 A.M. ET: IBD/TIPP Economic Optimism (MoM) (August)
11:30 A.M. ET: 4-Week Bill Auction
01:00 P.M. ET: 3-Year Note Auction
01:00 P.M. ET: Chicago Federal Reserve Bank President Charles Evans speaks.
03:00 P.M. ET: Treasury STRIPS