Morning Market Update
Stocks that are expected to trade actively in U.S. markets on Wednesday include: Merck & Co., Inc. (NYSE:MRK), Yahoo! Inc. (NASDAQ:YHOO), Comcast Corporation (NASDAQ:CMCSA), BMC Software, Inc. (NASDAQ:BMC), Time Warner Inc (NYSEW:TWX), PepsiCo, Inc. (NYSE:PEP), Nuance Communications Inc. (NASDAQ:NUAN), OpenTable Inc (NASDAQ:OPEN), Genworth Financial Inc (NYSE:GNW), Outdoor Channel Holdings, Inc. (NASDAQ:OUTD), Dreamworks Animation Skg Inc (NASDAQ:DWA)
Carlson Capital's Black Diamond Arbitrage fund is up 5.77% for the first eight months of the year, including a 1.72% return for August. Last year, the fund returned 2.39% for the whole year. Q3 2021 hedge fund letters, conferences and more The fund consists of merger arbitrage mainly consisting of signed or "rate of return" Read More
• US: Dow Futures: 14758.00 (-0.10%), S&P 500 Futures: 1591.00 (-0.08%), NASDAQ Futures: 2882.75 (0.10%)
• Europe: CAC: 3856.75 (0.00%), DAX: 7913.71 (0.00%), FTSE: 6463.09 (0.51%)
• Asia-Pacific: Australia: 5166.20 (-0.48%), China: 2177.91 (0.00%), Hong Kong: 22737.01 (0.00%), India: 5930.20 (0.00%), Japan: 13799.35 (-0.45%).
• Metals: Gold: 1466.10 (-0.41%), Silver: 23.84 (-1.41%), Copper: 3.14 (-1.60%)
• Energy: Crude Oil: 91.93 (-1.64%), Natural Gas: 4.37 (0.60%)
• Commodities: Corn: 6.42 (-1.52%), Soya Bean: 13.79 (-1.03%), Wheat: 7.20 (1.89%)
• Currency: EUR/USD: 1.3226 (0.44%), GBP/USD: 1.5583 (0.33%), USD/JPY: 97.2100 (-0.25%)
• 10 year US Treasury: 1.643% (-0.029)
Market and Economic News Update
U.S. stock-index futures largely unchanged: U.S. stock-index futures are pointing to a flat open on Wednesday following weak private sector employment data. The U.S. private sector added 119,000 jobs in April, the smallest gain since September last year, according to the ADP National Employment Report. Economists’ were expecting an increase of 150,000 jobs. In other economic news, U.S. manufacturing growth fell to 52.1 in April from 54.6 in March, data from Markit showed on Wednesday. Facebook Inc (NASDAQ:FB) and Visa Inc (NYSE:V) will report quarterly results after the close of trading.
European markets mixed: European markets are mixed in trade, amid investor caution ahead of the U.S. Federal Reserve’s monetary policy decision later in the day. The FTSE 100 (INDEXFTSE:UKX) gave up gains made earlier in the session and is up close to half a percent in early afternoon trade. The DAX (INDEXDB:DAX) and the CAC 40 (INDEXEURO:PX1) are closed for a holiday. The euro zone blue-chip ESTX 50 PR.EUR (INDEXSTOXX:SX5E) (Euro Stoxx 50) fell 0.2 percent.
Asian markets end lower: Asian stocks closed lower in a quite session on Wednesday, as markets in Shanghai, Hong Kong and Mumbai were closed for the May Day holiday. On the economic front, the official Chinese Purchasing Managers’ Index for April fell to 50.6 from last month’s eleven-month high of 50.9. The NIKKEI 225 (INDEXNIKKEI:NI225) closed down 0.5 percent, following a number of weak earnings reports. The S&P/ASX 200 (INDEXASX:XJO) index lost 0.5 percent to close at 5166.20 points.
Stocks in News
Merck & Co., Inc. (NYSE:MRK)
Merck & Co., Inc. (NYSE:MRK) posted weaker than expected quarterly sales, hurt by generic competition for its asthma and allergy drug Singulair. First quarter earnings excluding items came in at 85 cents per share, six cents above estimates. Revenue fell 9 percent to $10.671 billion from $11.73 billion a year earlier, trailing expectations for $11.09 billion. The drug maker cut its full-year profit forecast, and now expects earnings, excluding special items, of $3.45 to $3.55 per share. Merck & Co., Inc. (NYSE:MRK) also announced a new $15 billion share repurchase program.
Yahoo! Inc. (NASDAQ:YHOO)
Yahoo! Inc. (NASDAQ:YHOO) has abandoned its effort to acquire a majority stake in France Telecom SA (EPA:FTE)’s video sharing website Dailymotion, following objections by the French government. Dailymotion would have been the first big acquisition for Chief Executive Marissa Mayer. French government, which owns more than 27 percent of the telecom giant, raised concerns that the country would lose control over one of its biggest Internet successes. Yahoo! Inc. (NASDAQ:YHOO) and Dailymotion declined to comment on the situation.
Comcast Corporation (NASDAQ:CMCSA)
NBCUniversal parent Comcast Corporation (NASDAQ:CMCSA)’s first-quarter profit rose 17 percent, as U.S. residential video subscriber revenue grew at the fastest pace in four years. In the latest period, Comcast earned 51 cents per share, excluding certain items, one cent above estimates. Revenue came in slightly below expectations, hurt by a double-digit drop in broadcast revenue. Comcast Corporation (NASDAQ:CMCSA) shares rose close to 2 percent to $42.15 in early trading.
BMC Software, Inc. (NASDAQ:BMC)
A consortium lead by private equity firms, Bain Capital LLC and Golden Gate Capital Corp, has emerged as the frontrunner to acquire business software maker BMC Software, Inc. (NASDAQ:BMC) for more than $6.5 billion, Reuters reported late yesterday. According to people familiar with the matter, the offers came in a range of $45 to $50 a share. BMC Software, Inc. (NASDAQ:BMC) shares closed Tuesday at $45.58. Shares have rallied since the start of the year, on expectations of a deal.
CVS Caremark Corporation (NYSE:CVS)
CVS Caremark Corporation (NYSE:CVS) reported strong first quarter earnings amid higher margins and lower input costs. The drugstore chain earned 83 cents per share, excluding items, four cents above the consensus estimate. Revenue also beat Street projections, helped by increased demand for new generic drugs. For the current quarter, CVS Caremark Corporation (NYSE:CVS) expects per-share earnings of 94 cents to 97 cents, compared to analysts’ expectations of 94 cents.
Nuance Communications Inc. (NASDAQ:NUAN)
Carl Icahn has raised his stake in Nuance Communications Inc. (NASDAQ:NUAN) to 10.72 percent from 9.27 percent, according to a SEC filing. Icahn increased his stake after the speech recognition software maker plunged more than 18 percent on Tuesday following weaker than expected second-quarter profit and sales. Nuance Communications Inc. (NASDAQ:NUAN)’s speech recognition technology is used in Apple Inc. (NASDAQ:AAPL)’s iPhone devices as part of its “Siri” voice recognition feature.
Time Warner Inc (NYSE:TWX)
Time Warner Inc (NYSEW:TWX)’s quarterly profit beat analysts’ estimates, as the media conglomerate benefited from strength in its television networks. Time Warner Inc (NYSEW:TWX) posted first quarter earnings excluding items of earned 82 cents per share, seven cents above the average analysts’ estimates. Revenue fell short of analysts’ forecasts, hurt by declines at the studio production and magazine businesses. In addition, Time Warner Inc (NYSEW:TWX) reaffirmed its full-year outlook. Shares fell following the results.
PepsiCo, Inc. (NYSE:PEP)
PepsiCo, Inc. (NYSE:PEP) has raised its quarterly dividend by 6 percent to 56.75 cents a share from 53.75 cents a share. The dividend will be payable on June 28 to shareholders of record on June 7. This will be PepsiCo, Inc. (NYSE:PEP)’s 41st consecutive annual dividend increase. Since 2002, PepsiCo, Inc. (NYSE:PEP) has returned more than $58 billion to stockholders in the form of dividends and share buybacks, and expects to return more than $6 billion in 2013. Shares were largely unchanged in pre-market trading.
OpenTable Inc (NASDAQ:OPEN)
Steven Cohen’s SAC Capital Advisors has disclosed a 5 percent stake in restaurant reservation website OpenTable Inc (NASDAQ:OPEN). Shares were unchanged in morning trade. The company will report its first quarter numbers on Thursday. Analysts are projecting earnings of 29 cents per share, on revenue of $45.6 million.
Genworth Financial Inc (NYSE:GNW)
Genworth Financial Inc (NYSE:GNW)’s first-quarter earnings more than doubled, helped by strong performance at its U.S. mortgage insurance unit. Genworth Financial Inc (NYSE:GNW) reported adjusted earnings of 30 cents a share, 3 cents above the average analysts’ estimate. Revenue stood at $2.3 billion, falling short of projections for $2.49 billion. In the latest quarter, the company’s U.S. mortgage insurance business reported an operating profit of $21 million, compared with a net operating loss of $44 million last year. Shares were up in early-hours trading.
Outdoor Channel Holdings, Inc. (NASDAQ:OUTD)
Outdoor Channel Holdings, Inc. (NASDAQ:OUTD) soared in pre-market trading after Leo Hindery’s InterMedia Outdoors Holdings LLC raised its offer for the cable network to $237 million in cash, outbidding a rival offer from Kroenke Sports & Entertainment LLC. Outdoor Channel Holdings, Inc. (NASDAQ:OUTD) had agreed to a $227 million all cash offer from Kroenke in March. InterMedia said its offer will remain open until May 7, a day before Outdoor’s shareholders meet to vote on the Kroenke deal.
Dreamworks Animation Skg Inc (NASDAQ:DWA)
Dreamworks Animation Skg Inc (NASDAQ:DWA) posted a surprise first-quarter profit, helped by the success of its recent animation film “The Croods” and television revenue from “Rise of the Guardians” and “Madagascar 3: Europe’s Most Wanted.” Earnings came in at 7 cents a share, easily topping expectations for a loss of 3 cents a share. Revenue fell 1 percent to $134.6 million from $136.1 million, a year earlier, compared to analysts’ estimates of $99 million. “The Croods” generated $4 million of revenue in the quarter, while “Madagascar 3” contributed $22.8 million of revenue. Dreamworks Animation Skg Inc (NASDAQ:DWA) shares rallied in early morning trade.
Economic Calendar for Wednesday, May 01, 2013:
07:00 A.M. ET: MBA Purchase Applications (Week ending Friday, April 26)
08:15 A.M. ET: ADP Employment Change (April)
08:58 A.M. ET: Markit Manufacturing PMI (April)
10:00 A.M. ET: ISM Manufacturing PMI (Apr)
10:00 A.M. ET: Construction Spending (MoM) (March)
10:30 A.M. ET: EIA Petroleum Status Report (Week ending Friday, April 26)
02:00 P.M. ET: FOMC Meeting Announcement