US Market Commentary
FONT-SIZE Plus   Neg
Share SHARE
mail  E-MAIL

Global Economic Worries Engulf Wall Street

Global Economic Worries Engulf Wall Street
3/22/2012 7:28 AM ET

Concerns about the global economy are likely to pre-occupy Wall Street, as reflected by the U.S. index futures, which point to a moderately lower opening on Thursday. Weak Chinese manufacturing data and lackluster private sector activity in the eurozone could re-ignite concerns of a potential hurt to global growth. The U.S. jobless claims report to be released shortly after the markets open may add to worries or alleviate concerns depending on how the data pans out.

Around 6:30 am ET, the Dow futures are receding 62 points, the S&P 500 futures are slipping 7.70 points and the Nasdaq 100 futures are declining 12.25 points.

U.S. stocks moved about in a lackluster fashion on Wednesday amid the release of a report, which showed a small decline in existing home sales. The averages closing mostly lower. The lackluster mood reflected the uneasiness of traders over the overbought levels rather than disappointment over the housing data, which proved mixed. The Labor Department is due to release its customary jobless claims report for the week ended March 17th at 8:30 am ET. Economists expect claims to edge up to 352,000 in the recent reporting week from 351,000 in the previous week. The Federal House Finance Agency, or FHFA, is set to release its house price index for January at 10 am ET. Economists expect a 0.4 percent month-over-month increase in the house price index following a 0.7 percent increase in the previous month. The Conference Board is scheduled to release a report on the U.S. leading index for February at 10 am ET. The consensus estimate calls for a 0.6 percent increase in the leading indicators index for the month compared to 0.4 percent growth in the previous month. In corporate news, Strum Ruger & Company (RGR) said it has received orders of more than 1 million units in the first quarter of 2012. Therefore, the company said it has suspended the acceptance of new orders.

Raytheon's (RTN) board has voted to increase the company's annual dividend payout rate by 16 percent to $2 per share.

Shoe Carnival (SCVL) reported fourth quarter earnings of 24 cents per share, lower than 33 cents per share last year. Net sales rose 1.1 percent to $181.9 million. For the first quarter, the company expects earnings of 75-78 cents per share on net sales of $219 million to $222 million. The results were better than expected, while the guidance was upbeat.

Sonic Corp. (SONC) reported second quarter adjusted earnings of 2 cents per share on revenues of $115.1 million, up 1.4 percent year-over-year. The earnings were below estimates, while revenues exceeded expectations.

FuelCell Energy (FCEL) announced its intention to offer shares in an underwritten public offering.

Herman Miller's (MLHR) third quarter earnings came in line with estimates, while its revenues trailed estimates. For the fourth quarter, the company expects earnings of 28-32 cents per share on revenues of $415 million to $435 million. The guidance was downbeat.

McDonald's (MCD) announced that its Vice Chairman and CEO Jim Skinner has informed his decision to retire, effective June 30, 2012. The board named current president and COO Don Thompson to succeed Skinner as CEO, effective July 1st, 2012.

Accenture (ACN), Cost Plus (CPWM), Micron (MU), Nike (NKE), Steelcase (SCS) and Wet Seal (WTSLA) are among the companies due to report their quarterly results after the markets close.

The major Asian markets witnessed lackluster trading, weighed by the mixed cues from Wall Street overnight and a weak Chinese manufacturing data.

A survey by Markit Economics showed that Chinese factory activity shrank for the fifth consecutive month in March. The headline manufacturing purchasing managers' index fell to 48.1 in March from 49.6 in February.

Japan's Nikkei 225 average ended a volatile session up 40.59 points or 0.40 percent at 10,127. Australia's All Ordinaries hovered in positive territory throughout the session before ending up 17.90 points or 0.41 percent higher at 4,365. Hong Kong's Hang Seng Index moved back and forth across the unchanged line before closing up 44.93 points or 0.22 percent at 20,902.

The European markets are seeing marked weakness, weighed down by data showing a faster rate of contraction of the private sector in the eurozone region. The data raised fresh recession fears, rendering the mood gloomy. The manufacturing purchasing managers' index slid 1.3 points to 47.7 and the service sector activity index slid 0.1 point to 48.7.

Flash estimates released by Markit Economics showed that its composite output index fell to a 3-month low of 48.7 in March from 49.3 in February. U.K. retail sales fell by a more than expected 0.8 percent month-over-month in February

Ericsson (ERIC) announced that it has acquired additional in LG-Ericsson, bringing up its ownership interest to 75 percent from 50 percent previously. U.K. retailer Kingfisher reported higher profits and sales for 2011.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

Market Analysis

comments powered by Disqus