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Wall Street Shies Away From Risk

Wall Street Shies Away From Risk
4/5/2012 6:30 AM ET

Negative sentiment on Wall Street seems to be gathering momentum, as indicated by the U.S. index futures, which point to a lower opening. Economic data from across the Atlantic has added to the recent negative evidence. U.K.'s manufacturing output unexpectedly declined, while German industrial output fell by more than expected. Even amid the underlying caution, traders may focus on some key Main Street events such as the U.S. jobless claims report and the Bank of England's monetary policy meeting. Monthly sales released by the chain stores may impact retail stocks.

As of 6:30 am ET, the Dow futures are receding 58 points, the S&P 500 futures are slipping 7.20 points and the Nasdaq 100 futures are moving down 10.50 points.

U.S. stocks ended Wednesday's session sharply lower, as economic fears spooked the overbought markets.

On the economic front, the Labor Department is due to release its customary jobless claims report for the week ended March 31st at 8:30 am ET. Economists expect claims to edge up to 360,000 from 359,000 in the previous week.

St. Louis Federal Reserve Bank President James Bullard is scheduled to speak to the 13th Annual InvestMidwest Venture Capital Forum, on "The U.S. Economy and Monetary Policy," in St. Louis at 9:10 am ET. He will also take questions from the audience and the press.

In corporate news, Covidien (COV) announced a deal to buy Israel-based Oridion Systems for $23 per share in cash or a total of $300 million, net of cash required. The companies expect the deal to be completed in the second quarter of 2012.

Sanofi-Aventis (SNY) and Regeneron (REGN) said the FDA has granted priority review of the BLA for their investigational metastatic colorectal cancer candidate. The FDA decision date is set for August 4, 2012.

Bed Bath & Beyond's (BBBY) fourth quarter results were better than expected, while its first quarter and full year guidance was fairly soft.

A. Schulman (SHLM) reported second quarter earnings that trailed expectations. For the full year, the company expects non-GAAP net income for 2012 to exceed the previous year's net income.

AngioDynamics (ANGO) reported better than expected third quarter results and also issued upbeat guidance for 2012.

Pier 1 Imports (PIR) reported fourth quarter adjusted earnings of 48 cents per share on sales of $476.76 million. For 2013, the company expects earnings of $1.06-$1.12 per share. The fourth quarter earnings were in line, while revenues exceeded estimates. The company's 2013 guidance suggests that the company meet or miss estimates.

Ruby Tuesday's (RT) third quarter earnings exceeded estimates, while its revenues were below expectations. For 2012, the company expects adjusted earnings of 43-48 cents per share, lower than its earlier estimate of 55-65 cents per share.

Among retailers, Zumiez (ZUMZ) reported comparable store sales growth of 14.1 percent year-over-year compared to an 8.9 percent increase last year. Costco Wholesale (COST) reported that its comparable store sales rose 6 percent in March. Total sales rose 10 percent to $9.13 billion.

The major Asian markets ended mostly lower, as wary traders remained perturbed about recent soft data and adopted a cautious stance ahead of Friday's non-farm payrolls report.

Japan's Nikkei 225 average closed down 52.38 points or 0.53 percent at 9,768. Australia's All Ordinaries ended at 4,402, down 16.60 points or 0.38 percent. Meanwhile, the Hong Kong market, which opened after yesterday's public holiday, retreated. The Hang Seng Index receded 197.98 points or 0.95 percent before closing at 20,593.

China's Shanghai Composite, which was open for trading for the first time for the week, bucked the downtrend and ended 1.74 percent higher. Non-banking financial stocks led the advances, reacting to comments by Premier Wen Jiabao, who called for the break-up of a banking monopoly on lending.

The European markets are also trading lower, as traders continue to cash in on recent gains amid a reduced visibility into the economic outlook. The French CAC 40 Index is receding 1 percent compared to a more modest 0.48 percent retreat by the German DAX Index and the 0.42 percent pullback by the U.K.'s FTSE 100 Index.

In economic news, a report released by the U.K. Office for National Statistics showed that the U.K.'s industrial output rose 0.4 percent month-over-month in February. Meanwhile, manufacturing output declined 1 percent compared to expectations for a 0.1 percent increase.

The Bank of England's Monetary Policy Committee is set to announce its monetary policy decision a short while from now. The central bank is expected to keep interest rates as well as the size of its bond buying program unchanged amid the emergence of inflation threat from rising oil prices and belief that a recession may be averted. The reception to a debt auction by France was fairly encouraging after the Spanish scare yesterday.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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