Morning Market Update
Stocks that are expected to trade actively in U.S. markets on Wednesday include:
Target Corporation (NYSE:TGT), Staples, Inc. (NASDAQ:SPLS), Incyte Corporation (NASDAQ:INCY), Analog Devices, Inc. (NASDAQ:ADI), Intuit Inc. (NASDAQ:INTU), Office Depot Inc (NYSE:ODP), The J.M. Smucker Company (NYSE:SJM), Quest Diagnostics Inc (NYSE:DGX), La-Z-Boy Incorporated (NYSE:LZB), Textron Inc. (NYSE:TXT), Bottomline Technologies (NASDAQ:EPAY)
Sio Partners Targets Cancer Treatments and SPACs for Growth
Sio Partners, the specialist healthcare hedge fund, returned 0.9% net of fees and expenses in January, compared to a loss of -1% for the S&P 500 and a gain of 1% for the MSCI World Healthcare Index. Long investments contributed 12.6%, according to a copy of the firm's letter, which ValueWalk has been able to Read More
US: Dow Futures: 14954.00 (-0.21%), S&P 500 Futures: 1647.25 (-0.20%), NASDAQ Futures: 3075.50 (-0.18%)
Europe: CAC: 4030.26 (0.03%), DAX: 8292.78 (-0.09%), FTSE: 6421.09 (-0.50%)
Asia-Pacific: Australia: 5100.00 (0.43%), China: 2072.96 (0.02%), Hong Kong: 21817.73 (-0.70%), Japan: 13424.33 (0.21%).
Metals: Gold: 1366.00 (-0.48%), Silver: 23.02 (-0.20%), Copper: 3.31 (-0.78%)
Energy: Crude Oil: 104.56 (-0.52%), Natural Gas: 3.48 (1.02%)
Commodities: Corn: 4.81 (1.31%), Soya Bean: 13.09 (1.03%), Wheat: 6.51 (0.81%)
Currency: EUR/USD: 1.3386 (-0.23%), GBP/USD: 1.5694 (0.17%), USD/JPY: 97.4900 (0.23%)
10-year US Treasury: 2.831% (0.013)
Market and Economic News Update:
U.S. stock-index futures decline: U.S. stock-index futures are pointing to a lower open on Wednesday, indicating that the S&P 500 (INDEXSP:.INX) will drop for the fifth time in six days, as investors weighed earnings reports from retailers, and awaited the release of minutes from the Federal Reserve’s last policy meeting. The minutes are scheduled for release at 2 p.m. ET. Existing home sales data for July is due at 10 a.m., with economists projecting a 1.4 percent rise to an annual rate of 5.15 million.
European markets mostly lower: European markets are down in trade, with investors closely awaiting the minutes from the latest U.S. Federal Reserve meeting, which could provide fresh clues on when the central bank plans to taper its bond purchases program. On the economic front, a poll released by the Confederation of British Industry showed that companies expect growth to accelerate further in the coming three months. The CAC 40 (INDEXEURO:PX1) was largely unchanged at 4030.26 points, while the DAX (INDEXDB:DAX) lost 0.1 percent to 8292.78. The FTSE 100 (INDEXFTSE:UKX) edged 0.5 percent lower to 6421.09 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 end mixed: Asian markets struggled for direction ahead of minutes from the U.S. Federal Reserve’s July meeting, due out later in the day. The NIKKEI 225 (INDEXNIKKEI:NI225) reversed early morning losses to close 0.2 percent higher. The SSE Composite Index (SHA:000001) (Shanghai Composite Index) ended flat at 2,072. The S&P/ASX 200 (INDEXASX:XJO) index finished 0.4 percent higher at 5,100 points, despite shares of BHP Billiton Limited (ASX:BHP) tumbling in trade, following weaker than expected quarterly results.
Stocks in News:
Target Corporation (NYSE:TGT)
Target Corporation (NYSE:TGT)’s second-quarter profit fell to $611 million, or 95 cents a share, from $704 million, or $1.06 a share, in the same period last year. Revenue increased to $17.1 billion from $16.8 billion, a year earlier. Excluding certain items, adjusted profit was $1.19 a share. Analysts were looking for profit of 96 cents a share on sales of $17.3 billion. The company expects full-year profit to be near the low end of its prior guidance of $4.70 to $4.90 per share, and forecast adjusted third-quarter profit of 80 cents to 90 cents per share.
Staples, Inc. (NASDAQ:SPLS)
The office-products retailer reported lower than expected quarterly earnings as strength in online sales was offset by weakness in retail stores and international units. Staples earned $102.5 million, or 16 cents per share in the second quarter, compared to $120.4 million, or 18 cents per share, in the year-ago period. Sales fell to $5.31 million versus $5.43 million, a year earlier. Analysts were projecting earnings of 18 cents a share. Looking ahead, the company expects 2013 sales to fall in the low single-digits, and expects diluted EPS from continuing operations to be in the range of $1.21 to $1.25.
Incyte Corporation (NASDAQ:INCY)
Incyte Corporation (NASDAQ:INCY) said a mid-stage trial showed that its experimental cancer drug, Jakafi, improved the survival rate of patients. The six month survival rate of patients treated with the drug in combination with chemotherapy was 42 percent, compared with an 11 percent survival rate for patients’ on placebo. Shares soared 20 percent in recent pre-market trading, following the announcement.
Analog Devices, Inc. (NASDAQ:ADI)
Analog Devices, Inc. (NASDAQ:ADI) reported fiscal third-quarter earnings excluding items of 57 cents per share, edging past forecasts for 54 cents per share. Revenue stood at $674 million, ahead of the consensus estimate of $671.8 million. Looking ahead, the chip company sees the fourth-quarter earnings of 55 cents to 61 cents per share, versus estimates for 39 cents per share. Shares fell in recent trading.
Intuit Inc. (NASDAQ:INTU)
The tax software company broke even on a per share basis in its fiscal fourth quarter after adjusting for share-based compensation costs and other items. Revenue rose to $634 million from $567 million. Earnings were in line with expectations but sales topped the $622 million that Wall Street was looking for. For the current quarter, Intuit expects a loss of 10 cents to 11 cents per share on revenue of $595 million to $605 million. In addition, the company hiked its quarterly dividend by 12 percent to 19 cents per share. The new dividend is payable on October 18 to shareholders of record on October 10.
Office Depot Inc (NYSE:ODP)
Office Depot Inc (NYSE:ODP) has resolved a dispute with its largest shareholder, Starboard Value LP, by allowing three Starboard nominees, Cynthia Jamison, Jeffrey Smith, and Joseph Vassalluzzo, seats on its board of directors. Starboard hold a 14.6 percent stake in the company and was pushing to replace four of Office Depot’s board members with four of its own candidates. Shares of the office-supplies retailer fell close to a percent in recent trading.
The J.M. Smucker Company (NYSE:SJM)
The J.M. Smucker Company (NYSE:SJM)’s fiscal first-quarter profit rose to $126.6 million, or $1.19 a share, from $110.9 million, or $1.00 a share, in the same period last year. Net sales dropped 1 percent to $1.35 billion from $1.37 billion, a year earlier. Analysts had expected earnings of $1.20 on sales of $1.34 billion. For fiscal 2014, the company projected adjusted per-share earnings of $5.72 to $5.82, and said it expects sales to fall about 1 percent.
Quest Diagnostics Inc (NYSE:DGX)
Quest Diagnostics Inc (NYSE:DGX) increased its share buyback authorization by $1 billion, bringing the total authorization to about $1.3 billion. The medical lab operator will use $300 million in net proceeds from the sale of royalty rights of its drug candidate ibrutinib to buyback the shares, CEO Steve Rusckowski said in a statement.
La-Z-Boy Incorporated (NYSE:LZB)
La-Z-Boy Incorporated (NYSE:LZB) posted first-quarter earnings of 18 cents per share, 3 cents above the average analysts’ estimate. Revenue edged 6 percent higher to $318.9 million, trailing expectations for $323 million. Same-store written sales for the company’s Furniture Galleries store network jumped 13 percent for the quarter. Shares moved higher in the pre-open session.
Textron Inc. (NYSE:TXT)
A unit of Textron Inc. (NYSE:TXT) has secured a U.S. Air Force contract to build 1,300 cluster bombs for Saudi Arabia, according to a Reuters report. The contract, valued at $641 million, runs through the end of 2015. Textron shares closed Tuesday at $27.20, and were inactive in recent pre-market trading.
Bottomline Technologies (NASDAQ:EPAY)
The cloud-based payment solutions provider reported fiscal fourth quarter earnings of 32 cents per share on revenue of $65 million, compared to analysts’ expectations for earnings of 29 cents per share on sales of $65 million. Separately, Bottomline Technologies (NASDAQ:EPAY) announced the acquisition of Swiss-based Sterci SA. The deal, subject to certain shareholder approval, is expected to close next month.
Economic Calendar for Wednesday, August 21, 2013:
07:00 A.M. ET: MBA Purchase Applications
10:00 A.M. ET: Existing Home Sales (MoM) (July)
10:00 A.M. ET: Existing Home Sales Change (MoM) (July)
10:30 A.M. ET: EIA Crude Oil Stocks change (August 16)
02:00 P.M. ET: FOMC Minutes