Morning Market Update
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- US: Dow Futures: 13017.00 (0.12%), S&P 500 Futures: 1382.50 (0.14%), NASDAQ Futures: 2645.00 (0.35%)
- Europe: CAC: 3318.61 (-0.06%), DAX: 6804.72 (0.45%), FTSE: 5679.80 (-0.24%)
- Asia-Pacific: Australia: 4269.20 (0.55%), China: 2103.63 (-0.30%), Hong Kong: 19796.81 (1.07%), India: 5229.00 (0.56%), Japan: 8695.06 (0.69%).
- Metals: Gold: 1623.90 (0.26%), Silver: 28.22 (0.68%), Copper: 3.45 (0.92%)
- Energy: Crude Oil: 90.05 (0.30%), Natural Gas: 3.18 (-1.12%)
- Commodities: Corn: 8.17 (2.49%), Soya Bean: 16.58 (2.64%), Wheat: 9.26 (1.54%)
- Currency: EUR/USD: 1.2296 (0.29%), GBP/USD: 1.5672 (-0.24%), USD/JPY: 78.1900 (0.01%)
- 10 year US Treasury: 1.473% (-0.029)
Financial and Economic News Update
U.S. stock-index futures trading higher: U.S. stock index futures are pointing to a higher open on Tuesday as investors await announcements from U.S. and European central banks later this week. On the economic front, personal income rose 0.5 percent in June, while consumer spending was flat last month, according to data from the Commerce Department. The S&P/Case-Shiller index of property values showed that home prices declined less than forecast in the year ended May. The Dow Jones industrial average, S&P 500 and NASDAQ futures were trading marginally in the green.
European markets trading mixed: European markets are trading mixed on Tuesday with the German DAX (INDEXDB:DAX) up 0.5 percent at 6804.72, the FTSE 100 (INDEXFTSE:UKX) declining 0.2 percent to 5679.80, and the CAC 40 (INDEXEURO:PX1) trading largely unchanged at 3318.61. The euro zone blue-chip ESTX 50 PR.EUR (INDEXSTOXX:SX5E) (Euro Stoxx 50) was up 0.3 percent.
Asian markets end higher: Asian markets closed higher on Tuesday with Japan’s NIKKEI 225 (INDEXNIKKEI:NI225) closing 0.7 percent higher at 8,695.06. The HANG SENG INDEX (INDEXHANGSENG:HSI) jumped nearly 1.1 percent or 211.4 points to 19,796.8, while the SSE Composite Index (SHA:000001) fell 0.3 percent to end at 2,103.63. The S&P/ASX 200 (INDEXASX:XJO) index rose 23.5 points to its 4,269.2 points. The benchmark Indian 30-share BSE SENSITIVE (INDEXBOM:SENSEX) index gained 0.54 percent to 17,236.18 points.
Stocks in Focus
· Pfizer Inc. (NYSE:PFE), the largest U.S. drugmaker, reported second-quarter earnings excluding items of 62 cents per share, on revenue of $15.06 billion that topped the average analysts’ estimate of earnings excluding items of 54 cents per share on $14.87 billion in revenue. The company also maintained its full-year profit forecast.
· Marathon Petroleum Corp (NYSE:MPC) posted second quarter earnings excluding one-time items of $2.53 per share, 2 cents above consensus estimates. Revenue for the quarter came in at $20.3 billion, and the company said refining and marketing gross margin improved in the second quarter.
· The Goodyear Tire & Rubber Company (NYSE:GT) reported second quarter earnings excluding one-time costs of 57 cents per share, topping the average analyst expectation of 45 cents per share. Revenue declined 8 percent to $5.15 billion, missing estimates of $5.74 billion. The company said full-year tire unit volume should be about 5 percent to 7 percent below 2011 levels.
· Archer Daniels Midland Company (NYSE:ADM) posted fiscal fourth quarter adjusted earnings of 38 cents per share that was much lower than market expectations of earnings of 60 cents per share. Revenue for the quarter stood at $22.68 billion that managed to beat expectations of $21.75 billion.
· Aetna Inc. (NYSE:AET) reported second quarter earnings excluding items of $1.31 per share that beat the average analysts’ estimate of $1.25 per share. Revenue for the quarter rose to $8.83 billion, and the country’s third largest health insurer also raised its full-year earnings forecast.
· Valero Energy Corporation (NYSE:VLO) posted better than expected second quarter earnings and revenue, and increased its quarterly dividend to 17.5 cents per share from 15 cents per share.
· Discovery Communications Inc. (NASDAQ:DISCA) said second quarter net income increased to $293 million, or 76 cents per share, from $264 million, or 62 cents per share, a year earlier. Revenue increased 7 percent to $1.14 billion from the same quarter last year. The company also forecast full-year revenue in line with market expectations.
· Power producer Entergy Corporation (NYSE:ETR) said second quarter net income increased to $365 million, or $2.06 per share, from $315 million, or $1.76 per share, in the same period last year, helped by lower operating expenses and a tax settlement over costs to repair damage from hurricanes.
· Tyco International Ltd. (NYSE:TYC) reported third quarter earnings excluding items of $1.01 a share, 8 cents above the average analysts’ estimate. Revenue increased 4 percent to $4.46 billion, but missed Wall Street estimates of $4.54 billion.
· Cirrus Logic, Inc. (NASDAQ:CRUS) posted first quarter earnings excluding items of 22 cents per share, one cent above Street estimates. Revenue for the quarter stood at $99 million, against analysts’ estimates of $100.9 million. The company also forecast second-quarter revenue above market expectations.
· Biotechnology company, Dendreon Corporation (NYSE:DNDN) reported weaker-than-expected second-quarter earnings, and said it would shut-down one of its three manufacturing plants and slash more than 600 jobs.
· Pennsylvania based drug wholesale company AmerisourceBergen Corp. (NYSE:ABC) has been awarded an $18.5 billion contract from pharmacy benefit manager Express Scripts Holding Company (NASDAQ:ESRX).
· Analysts at Bernstein have raised Facebook Inc (NASDAQ:FB) to “market perform,” but lowered its share price target to $23.
- British oil company BP plc (ADR) (NYSE:BP) (LON:BP) reported a 96 percent fall in adjusted profit for the second quarter as it wrote down the value of its U.S. assets by $4.8 billion. Lower output and falling oil and gas prices also contributed to the weak earnings.
- UBS AG (USA) (NYSE:UBS) said second quarter net profit more than halved to 425 million Swiss francs ($433 million) from 1.0 billion francs a year earlier, on sharply lower trading revenue and higher operating expenses. The Swiss bank, which was a market-maker on Facebook Inc (NASDAQ:FB)’s initial public offering in May, suffered losses of about 349 million Swiss franc as a result of Nasdaq’s mishandling of the offer.
- Deutsche Bank AG (USA) (NYSE:DB) (ETR:DBK) (FRA:DBK) said earnings at its investment bank fell 63 percent in the second quarter as revenue from trading in debt and other products declined amid Europe’s debt crisis. Pretax profit dropped 63 percent to 357 million euros, while net income for the quarter came in at 661 million euros. Analysts were expecting a pretax profit of 1.4 billion euros and net income of 1 billion.
- Germany’s biggest retailer Metro AG (ETR:MEO) (FRA:MEO) reported a 2 percent rise in second quarter profit, ahead of market expectations, and reaffirmed its full-year outlook.
- Bayer AG (ETR:BAYN) (FRA:BAYN) reported better than expected second quarter earnings and revenue, and raised its full-year outlook due to strong demand for crop chemicals and drugs.
- Anheuser-Busch InBev NV (ADR) (NYSE:BUD) (EBR:ABI), the world’s biggest brewer, reported second-quarter net profit of $1.96 billion, beating market expectations of $1.79 billion. But second-quarter beer sales volume dropped as demand fell in the U.S. and Europe. Asia-Pacific was the stand-out performer for the company, where volumes grew 7.3 percent.
- London-listed Mexican precious metals miner, Fresnillo Plc (LON:FRES) reported a 25 percent decline in first half profit amid higher operating costs, and announced a 26 percent cut in its interim dividend payment.
- French tyre-maker, Michelin SCA (EPA:ML) fell 2 percent in Paris after analysts at J.P. Morgan Cazenove lowered the stock to “neutral” from “overweight.”
- Japanese automaker Honda Motor Co Ltd (ADR) (NYSE:HMC) (TYO:7267) reported first-quarter profit that missed the average analysts’ estimates, amid a strengthening of the yen and weakness in Europe. Japan’s third- largest carmaker, however, reiterated its full-year earnings forecast, and maintained its ambitious global sales target.
- Consumer electronics giant Panasonic Corporation (ADR) (NYSE:PC) (TYO:6752) posted its first net profit in six quarters, after cutting more than 38,000 jobs over the last year, and shutting factories. First quarter net income stood at 12.81 billion yen ($164 million) that beat consensus estimates of 9.2 billion yen. The maker of Viera TVs and Lumix digital cameras, reaffirmed its full-year profit and revenue forecast.
- Camera and printer maker Canon Inc. (ADR) (NYSE:CAJ) (TYO:7751) ended 5.8 percent higher in Tokyo after announcing its second share buyback program in two months.
- Anglo-Australian mining giant Rio Tinto plc (ADR) (NYSE:RIO) (LON:RIO) (ASX:RIO) will close its office in Sydney, as part of steps to cut costs amid falling commodity prices.
- Hitachi, Ltd. (TYO:6501), Japan’s largest industrial electronics maker, said first quarter net profit more than doubled to 7 billion yen ($89.2 million) due to strong sales in its construction machinery, power and automotive systems businesses. The company kept its forecast for full-year group net profit unchanged at 200 billion yen.
- Australian mining company, Aquila Resources Limited (ASX:AQA) said the country’s Environmental Protection Authority has recommended the West Australian government to approve the proposed port for its $6 billion iron ore project in Western Australia’s Pilbara region.
- Japan’s third-largest bank, Sumitomo Mitsui Financial Group, Inc. (TYO:8316) said first quarter profit declined 43 percent due to hefty losses on its domestic equity holdings amid a market slump. The bank left unchanged its full-year net profit forecast.
- Mitsubishi Electric Corporation (TYO:6503) ended 3.3 percent higher after reporting first quarter operating profit that beat analysts’ expectations by 8 percent.
Economic Calendar for Tuesday, July 31, 2012:
07:45 A.M. ET: ICSC-Goldman Store Sales (Week ending Saturday, July 28, 2012)
08:30 A.M. ET: Personal Income (MoM) (June)
08:30 A.M. ET: Personal Spending (June)
08:30 A.M. ET: Core Personal Consumption Expenditure – Price Index (MoM) (June)
08:30 A.M. ET: Core Personal Consumption Expenditure – Prices Index (YoY) (June)
08:30 A.M. ET: Personal Consumption Expenditures – Price Index (MoM) (June)
08:30 A.M. ET: Personal Consumption Expenditure – Price Index (YoY) (June)
08:30 A.M. ET: Employment Cost Index (Q2)
08:55 A.M. ET: Redbook (Week ending Saturday, July 28, 2012)
09:00 A.M. ET: S&P/Case-Shiller Home Price Indices (YoY) (May)
09:45 A.M. ET: Chicago Purchasing Managers’ Index (July)
10:00 A.M. ET: Consumer Confidence (July)
10:00 A.M. ET: State Street Investor Confidence Index (July)
03:00 P.M. ET: Farm Prices (July)