After an agonizing week, Wall Street seems to have mustered some optimism, as reflected by the U.S. index futures, which point to a positive start on Monday. The situation in Greece and Europe at large is still fluid and visibility into the domestic economic recovery is also hazy despite some of the recent incoming economic evidence vouching for a slow and steady progress. In the absence of any major domestic economic data, some bounce could be expected due to bargain hunting.
As of 6:30 am ET, the Dow futures are rising 70 point and the S&P 500 futures are up 8.10 points, while the Nasdaq 100 futures are gaining 16.50 points.
U.S. stocks continued their downtrend in the week ended May 18th, with the major averages ending the week sharply lower and ending at 4-month closing lows. Lackluster domestic economic data and fears concerning weak eurozone nations served as overhang, sapping investor risk appetite.
Housing readings are due to dominate proceedings on Main Street in the unfolding week, with the National Association of Realtors' existing home sales report for April and the Commerce Department's new home sales report also for April being the key among them. The Commerce Department's durable goods orders report for April, the final reading of the Reuters and the University of Michigan's consumer sentiment index for May and the weekly jobless claims report could also sway the markets.
The economic calendar of the week also features the Federal House Finance Agency's housing market index for March and Treasury auctions of 2-year, 5-year and 7-year notes.
In corporate news, Yahoo (YHOO) announced that it has entered into a definitive agreement with its Japanese unit Alibaba Group for gradually divesting Yahoo's stake in Alibaba in stages. To start with, Yahoo would sell 20 percent stake in Alibaba for $7.1 billion. Subsequently, Yahoo will sell some of its remaining stake in Alibaba through an IPO. Concurrently, Yahoo also announced an increase in its buyback authorization by $5 billion.
Intuit (INTU) announced the completion of its acquisition of Demandforce, a provider of online tools to help attract and retain customers, for $423.5 million in cash. Intuit expects the deal to add one or 2 points to its revenue growth in fiscal year 2013 and to be neutral to modestly dilutive to its earnings per share in fiscal years in 2012 and 2013.
American Eagle Outfitters (AEO) announced that its CFO Joan Hilson is resigning. The company also said its VP and controller Scott Hurd will lead its finance team, effective immediately. Separately, the company announced plans to exit its children's business, 77kids.
Nordson (NDSN) and Urban Outfitters (URBN) are among the companies due to report their quarterly results after the markets close.
DaVita (DVA) announced a deal to buy HealthCare Partners for about $4.42 billion in cash and stock.
Lowe's (LOW) said its first quarter earnings rose to 43 cents per share on revenues of $13.15 billion. The results were better than expected. The company lowered its full year earnings guidance, which is below the consensus estimate.
BlackRock (BLK) announced secondary offering of its common stock held by Barclays (BCS) through an underwritten public secondary offering. Following the offering, BlackRock intends to buyback $1 billion of its common stock directly from Barclays.
The major Asian markets closed mixed, with the Hong Kong, Indonesian and New Zealand markets closing lower, while the rest of the markets advanced. Although bargain hunting supported a bounce, an uneasy mood prevailed on account of the European debt crisis that remains unresolved.
Japan's Nikkei 225 average closed 22.58 points or 0.26 percent higher at 8,634 and Australia's All Ordinaries added 25.60 points or 0.62 percent before closing at 4,124. Material stocks lifted sentiment in the Australian market. Meanwhile, Hong Kong's Hang Seng ended down 29.53 points or 0.16 percent at 18,922.
European stocks are also rebound after they declined to 5-month closing lows last Friday. Nevertheless, traders are expected to exercise restraint ahead of a key European summit in Brussels this week.
Oil is slightly firmer, while gold is seeing some weakness after last week's rebound. Meanwhile, the euro is continuing to grind lower despite other risk currencies gaining ground.
by RTT Staff Writer
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