Morning Market Update
Stocks that are expected to trade actively in U.S. markets on Monday include: Apple Inc. (NASDAQ:AAPL), BlackBerry Ltd (NASDAQ:BBRY), Rockwell Collins, Inc. (NYSE:COL), J.C. Penney Company, Inc. (NYSE:JCP), Sony Corporation (ADR) (NYSE:SNE) (TYO:6758), Pinnacle Foods Inc (NYSE:PF), Vical Incorporated (NASDAQ:VICL), SYSCO Corporation (NYSE:SYY), Lowe’s Companies, Inc. (NYSE:LOW)
US: Dow Futures: 15319.00 (-0.36%), S&P 500 Futures: 1678.20 (-0.47%), NASDAQ Futures: 3103.75 (-0.31%)
Europe: CAC: 4062.39 (-0.35%), DAX: 8306.43 (-0.34%), FTSE: 6559.73 (-0.36%)
Asia-Pacific: Australia: 5108.70 (1.06%), China: 2101.28 (2.33%), Hong Kong: 22271.28 (2.08%), Japan: 13519.43 (-0.71%).
Metals: Gold: 1330.60 (1.40%), Silver: 21.04 (3.10%), Copper: 3.30 (-0.09%)
Energy: Crude Oil: 105.53 (-0.42%), Natural Gas: 3.32 (2.69%)
Commodities: Corn: 4.53 (0.06%), Soya Bean: 11.94 (0.99%), Wheat: 6.45 (-0.35%)
Currency: EUR/USD: 1.3289 (-0.40%), GBP/USD: 1.5476 (-0.14%), USD/JPY: 96.7400 (0.55%)
10-year US Treasury: 2.569% (-0.010)
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Market and Economic News Update:
U.S. stock-index futures decline: U.S. stock-index futures are pointing to a lower open on Monday, following weaker-than-expected growth in Japan, and continued speculation about the timing of potential reduction in Federal Reserve’s monetary stimulus. Meanwhile, the U.S. Treasury is scheduled to release details of its July budget deficit at 2 P.M. ET.
European markets fall: European markets turned lower after opening in the green, amid declines in auto and financial stocks. On the economic front, Greece reported better than expected second-quarter growth data, with a year-on-year contraction of 4.6 percent. The CAC 40 (INDEXEURO:PX1) lost 0.4 percent to 4062.39, while the DAX (INDEXDB:DAX) shed 0.3 percent to 8306.43. The FTSE 100 (INDEXFTSE:UKX) edged 0.4 percent lower to 6559.73 points. The euro zone blue-chip ESTX 50 PR.EUR (INDEXSTOXX:SX5E) (Euro Stoxx 50) was down 0.3 percent in recent trading.
Asian stocks mostly higher: Asian markets gained in trade amid growing investor optimism that Beijing would step in to support the world’s second-largest economy. The SSE Composite Index (SHA:000001) (Shanghai Composite Index) recorded its biggest percentage gain in more than a month to close at a seven-week high. The S&P/ASX 200 (INDEXASX:XJO) index jumped more than a percent, helped by a rally in mining stocks. The NIKKEI 225 (INDEXNIKKEI:NI225) bucked the trend to fall to a six-week low, following weak growth data. The Japanese economy grew at an annualized rate of 2.6 percent in the second quarter, lower than expectations for a 3.6 percent gain.
Stocks in News:
Apple Inc. (AAPL)
AllThingsD reported over the weekend that Apple Inc. (NASDAQ:AAPL) is planning to unveil its next iPhone at a September 10 media event. Tech analysts are expecting Apple to launch both an iPhone 5S as well as a lower cost iPhone. Apple Inc. (NASDAQ:AAPL) has been steadily losing market share in the smart phone space to Google Inc (NASDAQ:GOOG)’s Android platform. Last week, IDC reported that Android expanded its market share in the second quarter compared to 79 percent from 69 percent in the same period last year, while Apple Inc. (NASDAQ:AAPL)’s iOS accounted for 13 percent of smart phone sales during the period, compared to 17 percent a year earlier. Separately, analysts at Needham Research cut their price target on Apple Inc. (NASDAQ:AAPL) to $595 from $710.
BlackBerry Ltd (NASDAQ:BBRY)
Trading in BlackBerry Ltd (NASDAQ:BBRY) shares were halted pre-market after the company formed a special committee to explore “strategic alternatives,” including going private. Shares were up more than 1 percent prior to the announcement. Prem Watsa, chairman and CEO of largest shareholder, Fairfax Financial, said he will resign from the board of directors because of potential conflicts of interest.
Rockwell Collins, Inc. (NYSE:COL)
Rockwell Collins, Inc. (NYSE:COL) has agreed to buy closely-held Arinc Inc. from Carlyle Group LP (NASDAQ:CG) for $1.39 billion in one of the biggest U.S. aerospace deals unveiled this year. The acquisition will combine Rockwell’s avionics and cabin technologies with Arinc’s ground-based navigational networks, and is expected to close after regulatory approvals, according to a statement released on Sunday.
J.C. Penney Company, Inc. (NYSE:JCP)
The board of J.C. Penney Company, Inc. (NYSE:JCP) is discussing whether to take action against largest shareholder, William Ackman, for publicly disclosing the contents of a private boardroom meeting, The Wall Street Journal reported yesterday. Citing people with knowledge of the situation, the report however said that “it is far from clear” whether Ackman violated his duties as a director, leaving the board members with limited options to act against him. Ackman had released a letter last week calling for quicker action to replace CEO Mike Ullman.
Sony Corporation (ADR) (NYSE:SNE) (TYO:6758)
Sony Corporation (ADR) (NYSE:SNE) (TYO:6758)’s science-fiction film “Elysium” collected $30.5 million to lead sales at North American theaters over the weekend. The movie had a combined global opening of $41.4 million, providing some relief to the company, whose entertainment unit has come under increased criticism from hedge fund manager Daniel Loeb following disappointing box-office sales for action-thriller “White House Down,” and sci-fi thriller “After Earth.”
Pinnacle Foods Inc (NYSE:PF)
The packaged foods company has agreed to buy Unilever plc (ADR) (NYSE:UL) (LON:ULVR) Wish-Bone salad-dressings business for $580 million. Pinnacle said it expects the deal, funded with available cash and new debt, to immediately add to earnings. The transaction is expected to close late in the third quarter or early fourth quarter. Shares of Pinnacle Foods closed Friday at $25.46, and are inactive in pre-open session.
Vical Incorporated (NASDAQ:VICL)
Vical Incorporated (NASDAQ:VICL) plunged in pre-market trade after results from a late-stage trial of its cancer drug, Allovectin, failed to meet efficacy endpoints. Vical said the 390-patient trial of Allovectin to treat metastatic melanoma failed to show that the treatment was statistically better than chemotherapy. The drug program will be terminated, and the company will instead focus on its infectious disease vaccine programs, according to CEO Vijay Samant.
SYSCO Corporation (NYSE:SYY)
SYSCO Corporation (NYSE:SYY)’s fourth-quarter profit fell 8.5 percent to $283 million, or 47 cents per share, compared to $309 million, or 55 cents per share, in the year-ago period. Excluding items, earnings came in at 50 cents per share. Net sales rose 5 percent to $11.6 billion, from $11 billion, a year earlier. Analysts were expecting the marketer and distributor of food-service products to earn 54 cents a share on sales of $11.59 billion. Sysco shares were down in recent trading following the earnings announcement.
Lowe’s Companies, Inc. (NYSE:LOW)
Lowe’s Companies, Inc. (NYSE:LOW) said Orchard Supply Hardware Stores did not receive any additional buyout offers by Friday’s deadline, clearing the way for Lowe’s to acquire the hardware stores chain. Lowe’s expects to complete the deal, which is subject to bankruptcy court approval, by the end of August. Shares fell in recent pre-market trading.
Economic Calendar for Monday, August 12, 2013:
11:30 A.M. ET: 6-Month Bill Auction
11:30 A.M. ET: 3-Month Bill Auction
02:00 P.M. ET: Monthly Budget Statement (July)