Morning Market Update
Stocks that are expected to trade actively in U.S. markets on Wednesday include: Google Inc (NASDAQ:GOOG), Deere & Company (NYSE:DE), Macy’s, Inc. (NYSE:M), Wal-Mart Stores, Inc. (NYSE:WMT), Agilent Technologies Inc. (NYSE:A), Lockheed Martin Corporation (NYSE:LMT), Safeway Inc. (NYSE:SWY), The Boeing Company (NYSE:BA), The Gap Inc. (NYSE:GPS), Northrop Grumman Corporation (NYSE:NOC) and Eastman Chemical Company (NYSE:EMN).
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• US: Dow Futures: 15166.00 (-0.06%), S&P 500 Futures: 1645.00 (-0.18%), NASDAQ Futures: 2994.25 (-0.03%)
• Europe: CAC: 3962.45 (-0.09%), DAX: 8322.00 (-0.21%), FTSE: 6688.04 (0.03%)
• Asia-Pacific: Australia: 5191.70 (-0.56%), China: 2224.80 (0.35%), Hong Kong: 23044.24 (0.49%), Japan: 15096.03 (2.24%).
• Metals: Gold: 1409.60 (-1.05%), Silver: 22.94 (-1.88%), Copper: 3.23 (-1.64%)
• Energy: Crude Oil: 93.16 (-1.11%), Natural Gas: 4.05 (0.57%)
• Commodities: Corn: 6.49 (-0.57%), Soya Bean: 14.07 (-0.35%), Wheat: 7.05 (0.07%)
• Currency: EUR/USD: 1.2869 (-0.39%), GBP/USD: 1.5228 (0.12%), USD/JPY: 102.4900 (0.07%)
• 10 year US Treasury: 1.949% (-0.031)
Market and Economic News Update
U.S. stock-index futures decline: U.S. stock-index futures are pointing to a lower open on Wednesday as data showed manufacturing in the New York region unexpectedly turned negative in May. The New York Fed said the Empire State general conditions index fell to a negative 1.4 in May from positive 3.1 in April. Economists had forecast an increase to 4. In other economic news, producer prices fell 0.7 percent in April, as gasoline and food costs tumbled, the Labor Department said today. This was the biggest drop in three years. Economists were expecting a decline of 0.6 percent. Cisco Systems, Inc. (NASDAQ:CSCO) will report quarterly results after the close of trading.
European markets down: European markets fell in trade, hurt by weak growth data from the euro zone. Gross domestic product for the currency bloc declined 0.2 percent in the first quarter of 2013, missing expectations for a 0.1 percent drop. In France, the economy contracted by 0.2 percent in the first quarter, while Germany posted a 0.1 percent expansion rate for the period. Investors are hoping that the downbeat data will force the European Central Bank to adopt more steps to boost the economy. The DAX (INDEXDB:DAX) and the CAC 40 (INDEXEURO:PX1) are marginally lower, while the FTSE 100 (INDEXFTSE:UKX) is flat in trade. The euro zone blue-chip ESTX 50 PR.EUR (INDEXSTOXX:SX5E) (Euro Stoxx 50) gained 0.1 percent.
Asian markets end mostly higher: Asian stocks closed higher, with the NIKKEI 225 (INDEXNIKKEI:NI225) hitting a fresh five and a half year high, amid continued in the yen. The HANG SENG INDEX (INDEXHANGSENG:HIS) was up 0.5 percent at 23044.24, while the SSE Composite Index (SHA:000001) (Shanghai Composite Index) rose 0.4 percent. The S&P/ASX 200 (INDEXASX:XJO) index gave up gains made earlier in the session to close down 0.5 percent as mining stocks extended their losses on the back of falling iron ore prices.
Stocks in News
Google Inc (NASDAQ:GOOG)
Google Inc (NASDAQ:GOOG) has signed licensing deals with Universal Music Group, Sony Music Entertainment and Warner Music Group to launch a subscription-based streaming music service that would compete with Spotify and Rhapsody, according to several media reports on Tuesday. The new service is expected to be unveiled at Google I/O, the company’s annual conference for software developers. A Google spokeswoman declined to comment on the report.
Deere & Company (NYSE:DE)
Deere & Company (NYSE:DE) reported second quarter profit of $2.76 per share, four cents above the consensus estimate, with revenues also topping forecasts. The heavy equipment maker forecast record full-year profit, but warned that “global financial pressures as well as adverse weather patterns” could make things difficult during the second half of the year. Shares fell 4 percent to $90.25 in pre-open trading.
Macy’s, Inc. (NYSE:M)
Macy’s, Inc. (NYSE:M) posted higher quarterly profit and raised its quarterly dividend by 25 percent. First-quarter profit increased to $217 million, or 55 cents a share, from $181 million, or 43 cents, in the year-ago period. Sales edged 4 percent higher to $6.39 billion. Analysts were expecting profit of 53 cents a share on $6.39 billion in revenue. The department store chain also raised its quarterly cash dividend to 25 cents a share from 20 cents a share, and boosted its share repurchase program by $1.5 billion.
Wal-Mart Stores, Inc. (NYSE:WMT)
Wal-Mart Stores, Inc. (NYSE:WMT) will conduct in-depth safety inspections at the 279 Bangladesh factories that supply its stores, and plans to complete all reviews within six months. Wal-Mart will pay for the factory audits, to be conducted by an outside auditor, but will not pay for any safety improvements, Rajan Kamalanathan, Wal-Mart’s head of ethical sourcing told Dow Jones Newswires. Major U.S. and European retailers are taking steps to prevent another disaster in the country’s garment industry where more than 1,200 workers have died in the last six months.
Agilent Technologies Inc. (NYSE:A)
Agilent Technologies Inc. (NYSE:A) reported better than expected quarterly earnings, sending shares higher in pre-market trading. Second-quarter non-GAAP earnings came in at 77 cents per share, edging past expectations for 67 cents per share. Revenue was flat at $1.73 billion, compared to estimates of $1.74 billion. For the current quarter, the company forecast earnings of 60 to 64 cents per share, on revenue of between $1.63 billion and $1.66 billion. Analysts are expecting 74 cents per share and $1.75 billion in revenue. In addition, the scientific instrument maker expanded its stock-repurchase program to $1 billion and said it will cut 450 jobs.
Lockheed Martin Corporation (LMT)
U.S. defense company Lockheed Martin Corporation (NYSE:LMT), and European missile maker, MBDA, are planning to collaborate in naval weapons to attract more customers worldwide. The two companies have entered into an agreement aimed at integrating MBDA’s naval missile systems into Lockheed Martin’s launching systems. Paris-based MBDA is a joint venture between European Aeronautic, Defence & Space Co., BAE Systems plc (LON:BA) and Italy’s Finmeccanica SpA (BIT:FNC).
Safeway Inc. (NYSE:SWY)
Safeway Inc. (NYSE:SWY) raised its quarterly cash dividend by 14 percent to 20 cents per share from 17.5 cents per share. The dividend is payable on July 11 to shareholders of record on June 20. The hike will cost the supermarket chain about $6 million a quarter. Shares closed at $25.45 and were unchanged in pre-open session.
The Boeing Company (NYSE:BA)
The Boeing Company (NYSE:BA) will fix the battery systems on all of its 787 Dreamliner aircrafts by the end of May; company vice president Dinesh Keskar told Reuters on Wednesday. Dreamliner jets have been grounded worldwide since January following incidents of battery overheating. Shares gained in early morning trade.
The Gap Inc. (NYSE:GPS)
The Gap Inc. (NYSE:GPS) was raised to “buy” from “neutral” by Citigroup, with a target price of $48. Analyst Oliver Chen cited better merchandise and an improving economy for the upgrade. Shares jumped more than a percent to $41.40 in New York pre-market trading.
Northrop Grumman Corporation (NYSE:NOC)
Defense contractor Northrop Grumman Corporation (NYSE:NOC) raised its quarterly dividend by 11 percent to 61 cents per share from 55 cents per share. The dividend is payable June 12 to shareholders of record as of the close of business May 28. The increase is expected to cost an estimated $14.1 million per quarter. Shares closed Tuesday at $78.96 and were inactive in pre-market trading.
Eastman Chemical Company (NYSE:EMN)
Eastman Chemical Company (NYSE:EMN) has named Mark Costa as president, effective immediately, and CEO effective January 1, 2014. Costa, currently head of the chemical maker’s additives and functional products division, joined Eastman in 2006, and will succeed James Rogers as the chief executive. Eastman shares ended Tuesday up 88 cents at $67.44.
Economic Calendar for Wednesday, May 15, 2013:
07:00 A.M. ET: MBA Purchase Applications (Week ending Friday, May 10)
08:30 A.M. ET: Producer Price Index (YoY) (April)
08:30 A.M. ET: Producer Price Index (MoM) (April)
08:30 A.M. ET: Producer Price Index ex-Food & Energy (YoY) (April)
08:30 A.M. ET: Producer Price Index ex-Food & Energy (MoM) (April)
08:30 A.M. ET: NY Empire State Manufacturing Index (May)
09:00 A.M. ET: Total Net TIC Flows (March)
09:00 A.M. ET: Net Long-Term TIC Flows (March)
09:15 A.M. ET: Industrial Production (MoM) (April)
09:15 A.M. ET: Capacity Utilization (April)
10:00 A.M. ET: NAHB Housing Market Index (May)
10:00 A.M. ET: E-commerce sales (Q1)
10:30 A.M. ET: EIA Petroleum Status Report (Week ending Friday, May 10)