Every morning we put out a report with the latest on global markets, companies, and economic data. In focus today; UBS, PNC, BAC, BLK, BK, WYNN, NEU, LON, GLG
Morning Market Update
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- US: Dow Futures: 12689.00 (-0.39%), S&P 500 Futures: 1353.30 (-0.38%), NASDAQ Futures: 2582.00 (-0.19%)
- Europe: CAC: 3200.50 (0.74%), DAX: 6585.91 (0.13%), FTSE: 5630.10 (0.02%)
- Asia-Pacific: Australia: 4123.60 (-0.42%), China: 2169.10 (0.36%), Hong Kong: 19239.88 (-1.12%), India: 5216.30 (0.45%), Japan: 8726.74 (-0.32%).
- Metals: Gold: 1574.10 (-0.97%), Silver: 26.94 (-1.36%), Copper: 3.44 (-0.33%)
- Energy: Crude Oil: 89.12 (-0.11%), Natural Gas: 2.82 (0.97%)
- Commodities: Corn: 7.65 (-0.19%), Soya Bean: 15.81 (-0.19%), Wheat: 8.86 (-0.17%)
- Currency: EUR/USD: 1.2220 (-0.60%), GBP/USD: 1.5599 (-0.35%), USD/JPY: 78.9800 (-0.10%)
- 10 year US Treasury: 1.476% (-0.032)
Financial and Economic News Update
U.S. stock-index futures trading lower: U.S. stock index futures are pointing to a lower open on Wednesday amid a cautious outlook from Intel, and investor concerns about Spain’s banking system. On the economic front, the Commerce Department said housing starts rose 6.9 percent last month to a seasonally adjusted annual rate of 760,000 units, the highest rate since October 2008, and above forecasts of a 745,000 unit rate. The Dow futures, the S&P futures and the NASDAQ future are all trading close to half a percent lower.
European markets in the green: European markets are trading higher buoyed by a slew of better than expected corporate earnings results. The German DAX (INDEXDB:DAX) was trading up 0.1 percent at 6585.91, the FTSE 100 (INDEXFTSE:UKX) was unchanged at 5630.10, and the CAC 40 (INDEXEURO:PX1) rose 0.7 percent to 3200.50. The euro zone blue-chip ESTX 50 PR.EUR (INDEXSTOXX:SX5E) (Euro Stoxx 50) was up 0.30 percent.
Asian markets end mostly lower: Asian markets closed mostly lower on Wednesday after Federal Reserve Chairman Ben Bernanke offered a gloomy outlook of the U.S. economy that trumped investor hopes for further monetary stimulus. Japan’s NIKKEI 225 (INDEXNIKKEI:NI225) ended 0.3 percent lower at 8726.74. The HANG SENG INDEX (INDEXHANGSENG:HSI) was the worst performer in the region, down 1.1 percent, while the SSE Composite Index (SHA:000001) (Shanghai Composite Index) closed at 2,169.1 points. The S&P/ASX 200 (INDEXASX:XJO) index fell 17 points to 4,123.6. The benchmark Indian 30-share BSE SENSITIVE (INDEXBOM:SENSEX) index rose 0.47 percent to 17,185.09 points.
Stocks in Focus
- Bank of America Corp (NYSE:BAC) reported second quarter earnings per share of 19 cents, five cents above the average analysts’ estimates. Total revenue soared 66 percent to $21.97 billion. The bank said provision for credit losses was down to the lowest level is over five years.
- BlackRock, Inc. (NYSE:BLK) posted second-quarter earnings, excluding certain items of $3.10 per share on revenue of $2.23 billion. Analysts were expecting earnings of $3.01 a share on $2.26 billion in revenue. Assets under management on June 30 was down 3 percent from a year ago, at $3.56 trillion
- Honeywell International Inc. (NYSE:HON) said second quarter earnings increased 11.7 percent to $905 million, or $1.14 per share, that topped estimates. Revenue increased 3.8 percent to $9.44 billion, slightly below consensus.
- U.S. Bancorp (NYSE:USB), the fifth-largest U.S. commercial bank, posted a better than expected second quarter profit as total loans grew and bad loans decreased.
- PNC Financial Services (NYSE:PNC), the seventh-largest U.S. bank by deposits, reported a 40 percent slump in second-quarter profit to $546 million, or 98 cents per share, from $912 million, or $1.67 per share a year earlier, because of costs tied to faulty mortgages and foreclosures.
- The Bank of New York Mellon Corporation (NYSE:BK), the world’s largest custody bank, said second-quarter profit fell 37 percent to $466 million, or 39 cents a share, from year-earlier profit of $735 million, or 59 cents a share, as low interest rates and a litigation-related charge cut into profits.
- The US Food and Drug Administration has approved Vivus, Inc. (NASDAQ:VVUS)’s obesity drug Qsymia, on Tuesday, a month after the drug regulators approved Arena Pharmaceuticals, Inc. (NASDAQ:ARNA)’s Belviq.
- Tool maker Stanley Black & Decker, Inc. (NYSE:SWK) reported second quarter earnings, excluding certain items, of $1.32 per share, 20 cents below estimates. The company also lowered its full-year forecast amid a stronger dollar.
- Casino company Wynn Resorts, Limited (NASDAQ:WYNN) reported lower than expected second quarter earnings of $1.37 per share, amid a dip in revenue in Las Vegas and Macau.
- Cosmetic products retailer Sally Beauty Holdings, Inc. (NYSE:SBH) said private-equity firm Clayton Dubilier & Rice, LLC, was offloading its stake in the company. Clayton, Dubilier & Rice is the largest shareholder in the company.
- Data-storage company EMC Corporation (NYSE:EMC)reported second quarter earnings per share of 39 cents, on revenue of $5.31 billion. Analysts were expecting the company to earn 40 cents a share on revenue of $5.30 billion.
- The board of fuel additives company, NewMarket Corporation (NYSE:NEU) has approved a $250 million share-repurchase program.
- Chemical and ammunition maker Olin Corporation (NYSE:OLN) has agreed to buy privately held K.A. Steel Chemicals Inc, a Lemont, Illinois-based manufacturer of bleach, for $328 million in cash.
- Carbo Ceramics Inc. (NYSE:CRR), the world’s largest supplier of ceramic proppant for fracturing oil and gas wells, approved a 13 percent increase in quarterly dividend to 27 cents a share.
- Luxury goods retailer, Tiffany & Co. (NYSE:TIF), was upgraded to “buy” from “neutral” by analysts at Goldman Sachs.
- Analysts at Bank of America/Merrill Lynch have initiated coverage of online photo service company, Shutterfly, Inc. (NASDAQ:SFLY), with a “buy” rating.
- Credit Suisse Group AG (NYSE:CS) reported a 3.6 percent rise in second quarter net profit, and unveiled a string of measures to boost its capital base by 15.3 billion Swiss francs ($15.6 billion) before the year end.
- London Stock Exchange Group Plc (LON:LSE) said fiscal first-quarter income jumped 10 percent to 209.5 million pounds ($328 million), largely due to the acquisition of the FTSE index unit late last year.
- Network equipment maker, Telefonaktiebolaget LM Ericsson (NASDAQ:ERIC), reported a bigger than expected fall in second-quarter net profit to 1.11 billion Swedish kronor ($159 million), from 3.12 billion Swedish kronor in the same quarter last year, amid a sharp drop in sales of network equipments due to the global economy slowdown.
- Irish airline Aer Lingus Group Plc has asked its shareholders to reject the latest 694 million euro ($849 million) offer from rival, Ryanair Holdings plc (NASDAQ:RYAAY) (LON:RYA).
- German sportswear maker Puma AG Rudolf Dassler Sport (ETR:PUM) (FRA:PUM) expects first half net earnings to decline 13 percent, and also lowered its full year earnings and revenue guidance.
- · ASML Holding N.V. (ADR) (NASDAQ:ASML) (AMS:ASML), the world’s largest chip equipment maker, posted a 30 percent fall in first half net profit to 539 million euros from 827 million euros the year earlier. Revenue declined 17 percent to 2.5 billion euros.
- Swedish bank Nordea Bank AB (STO:NDA-SEK) posted better than expected second quarter profit and net income, but warned that slower growth in the region due to the European debt crisis was taking its toll on business.
- Spanish banks Banco Santander, S.A. (NYSE:SAN) and Banco Bilbao Vizcaya Argentaria SA (ADR) (NYSE:BBVA), slumped in trade today after analysts at Societe Generale said second quarter earnings for Spanish lenders could fall by as much as half.
- Norwegian fertilizer producer Yara International ASA (ADR) (PINK:YARIY) reported a better than expected rise in second-quarter net profit to NOK2.80 billion ($460 million), from NOK2.23 billion, in the same period last year. Revenue came in at NOK21.42 billion, slightly lower than estimates.
- British fund manager Ashmore Group plc (LON:ASHM) was raised to “buy” from “neutral” by analysts at Goldman Sachs Group Inc, while Barclays Plc upgraded Capital Shopping Centres Group plc (LON:CSCG) to “overweight” from “equal weight.”
- BHP Billiton Limited (NYSE:BHP) (ASX:BHP) (LON:BLT), the world’s largest mining company, reported a 15 percent increase in fourth quarter iron ore production, and said it expects to lift output by 5 percent in the current financial year, despite the deteriorating global economic conditions.
- Dell Inc. (NASDAQ:DELL) Chief Executive Michael Dell said the company is witnessing a business slowdown in China, its largest market outside of the United States, which accounts for about $5 billion in annual revenue.
- Dutch brewer Heineken N.V. (AMS:HEIA) said it would act to safeguard its interests in Asia, after Thai billionaire Charoen Sirivadhanabhakdi offered to buy a $1.6 billion stake in its partner in the region.
- Japanese utility Kansai Electric Power Co Inc (TYO:9503) shed 6.3 percent in Tokyo trading after geological studies into the area around its Ohi power plant found the possibility of an active fault line.
- Fortescue Metals Group Limited (ASX:FMG), Australia’s third-biggest producer of iron ore, slumped 3.5 percent in Sydney trading after analysts at Deutsche Bank downgraded the stock to “hold” from “buy,” and Morgan Stanley slashed its target price.
- Hong Kong-listed luggage maker Samsonite International S.A. (HKG:1910) agreed to buy US-based casual bag distributor, High Sierra Sport Company, for $110 million cash.
- Adelaide-based Gerard Lighting Group Limited (ASX:GLG) recommended a 1.05 Australian dollar per share cash takeover offer from private equity group Champ, valuing the company at 186 million Australian dollars ($191.6 million).
- State-owned airlines, Air China Ltd. (HKG:0753) (SHA:601111), said first half profit may drop by as much as half from a year earlier, amid a slowdown in the industry and high fuel prices.
- Chinese department store operator Maoye International Holdings Limited (HKG:0848) expects first half profit and revenue to record moderate growth.
Economic Calendar for Wednesday, July 18, 2012:
07:00 A.M. ET: MBA Purchase Applications (Week ending Friday, July 13, 2012)
08:30 A.M. ET: Housing Starts (MoM) (June)
08:30 A.M. ET: Building Permits (MoM) (June)
10:00 A.M. ET: Federal Reserve Chairman Ben Bernanke speaks.
10:30 A.M. ET: EIA Petroleum Status Report (Week ending Friday, July 13, 2012)
02:00 P.M. ET: Fed’s Beige Book