The major U.S. index futures are pointing to a slightly higher opening on Tuesday. The mood is pensive, as traders look ahead to some key global central bank decisions due Wednesday and Thursday. An economic report released earlier in the day showed slacker consumer spending, highlighting the loss of economic momentum. Across the Atlantic, data released from the eurozone showed that unemployment remained at a record high. The markets could construe the weak data points as compelling reasons for central banks and governments to act. That said, an offsetting impact could come from the overbought levels of the markets.
U.S. stocks went about Monday's session in a lackluster manner before closing lower, as traders exercised caution in the wake of recent gains. Even stimulus hopes could not help sustain the buying momentum.
The major averages opened little changedbut rose in early trading only to give back all their gains by the early afternoon. Thereafter, the averages languished below the unchanged line before closing lower.
The Dow Industrials ended down 2.65 points or 0.02 percent at 13,073 and the S&P 500 Index closed 0.67 points or 0.05 percent lower at 1,385. Meanwhile, the Nasdaq Composite lost a steeper 12.25 points or 0.41 percent before closing at 2,946.
Seventeen of the thirty Dow components closed lower, with Merck (MRK), JP Morgan Chase (JPM), Intel (INTC) and Hewlett-Packard (HPQ) retreating sharply. On the other hand, Coca-Cola (KO), United Technologies (UTX) and Cisco Systems (CSCO) advanced strongly.
Housing, biotechnology, oil service, financial and semiconductor stocks came under selling pressure, while gold stocks rallied.
Currency, Commodity Markets
Crude oil futures are rising $0.01 to $89.79 a barrel after declining $0.35 to $89.78 a barrel on Monday.
Gold futures are currently adding $2.50 to $1,626.50 an ounce. In the previous session, the precious metal added $1.30 to $1,624 an ounce.
On the currency front, the U.S. dollar is trading at 78.21 yen compared to the 78.18 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.2281 compared to yesterday's $1.2260.
The major Asian markets advanced for the fourth straight session, as stimulus hopes gained ground.
Japan's Nikkei 225 average ignored a weak start and moved into positive territory in late morning trading. The average remained above the unchanged line thereafter before closing up 59.62 points or 0.69 percent at 8,695.
Export stocks rose on the yen's weakness, with Fujikura, Advantest and Kawasaki Kisen Kaisha rising strongly. On the other hand, utility, bank and pharma stocks declined.
Australia's All Ordinaries closed up 22.50 points or 0.53 percent at 4,289, with energy stocks rebounding and supporting the upside. Material stocks also showed firmness. Meanwhile, Hong Kong's Hang Seng Index ended at 19,797, up 211.41 points or 1.08 percent.
In economic news, a government report showed that Japanese household spending rose 1.6 percent year-over-year in June compared to expectations for a 2.9 percent increase. A separate report showed that the Japanese unemployment rate came in at 4.3 percent in June compared to 4.4 percent in July. Housing starts in Japan declined 0.2 percent year-over-year in June following a 9.3 percent increase in May. Economists expected a 9.4 percent increase for the month.
European stocks are trading mixed as traders stay invested in stocks on stimulus hopes despite the release of disappointing domestic earnings. The French CAC 40 Index and the U.K.'s FTSE 100 Index are retreating, while the German DAX Index is advancing.
A consumer confidence survey by the GfK/NOP showed that U.K. consumer confidence remained at depressed levels in July. The consumer confidence index held steady at -29.
A report released by the German Federal Statistical Office showed that retail sales fell 0.1 percent in June compared to the 0.5 percent increase expected by economists. The number of unemployed individuals in Germany rose by 7,000 in line, according to a government report. The increase was in line with expectations. The statistical agency's survey showed that the jobless rate slid to 5.4 percent in June from 5.5 percent in May.
BP (BP) said its second quarter adjusted earnings declined to $3.7 billion from the year-ago quarter's $5.7 billion due to weak production and margins. Swiss investment bank UBS (UBS) reported a sharp decline in second quarter profits due to weakness at its investment banking business. Germany's Deutsche Bank (DB) also reported a 63 percent drop in its second quarter pre-tax profits.
U.S. Economic Reports
The Federal Open Market Committee, the monetary policy-setting arm of the Federal Reserve, is due to meet for a 2-day meeting beginning Tuesday.
A greater than expected increase in U.S. personal income didn't translate into an increased willingness among U.S. consumers to open their wallets in June, according to the Commerce Department. Personal income in the U.S. had risen by $61.8 billion in June, an increase of 0.5 percent.
The increase was higher than the 0.4 percent predicted by most economists and comes atop revised figures that showed the May increase in personal income of 0.3 percent was higher than the 0.2 percent initially reported.
However consumer spending, known formally as personal consumption expenditures fell marginally in June, dropping $1.3 billion. Because that decrease represents less than 0.1 percent, Commerce Department figures report it as essentially level. Additionally, May consumer spending figures, which had initially showed a 0.0 percent change, were revised to show a 0.1 percent decline for the month.
The Labor Department reported that its employment cost index for the second quarter rose 0.5 percent, in line with expectations.
The S&P/Case-Shiller home price index, which tracks monthly changes in the value of residential real estate in 20 metropolitan regions across the U.S., is scheduled to be released at 9 am. Economists expect a seasonally adjusted 0.5 percent month-over-month increase by the 20-city composite house price index for May. The index is expected to have declined by 1.4 percent on a unadjusted basis compared to the previous year.
The 20-city composite house price index rose 0.67 percent month-over-month in April and was down a less than expected 1.9 percent from a year ago. Prices increased relative to the previous month in 17 of the 20 cities surveyed.
The results of the Institute for Supply Management-Chicago's business survey for July are scheduled to be released at 9:45 am ET. Economists expect the business barometer based on the survey to edge down to 52.5.
The business barometer rose to 52.9 in June from 52.7 in May. The new orders index slipped 1 point to 51.9 and the order backlogs index receded 4 points to 42.2. Meanwhile, the employment index rose 3.4 points to 60.4 and the production index climbed 7 points to 57.
The Conference Board is scheduled to release its consumer confidence report for July at 10 am ET. The report, which is based on a survey of 5,000 U.S. households, is expected to show that the consumer confidence index declined to 61.5 in July.
Consumer confidence declined by more than expected in June. The consumer confidence index fell 2.4 points to 62 in June. The expectations index declined by 5 points to a 7-month low of 72.3, while the present situation index rose 1.7 points to 46.6.
Stocks in Focus
Jacob's Engineering (JEC) reported third quarter earnings that beat estimates by a penny, while its revenues missed expectations. The company maintained its 2012 earnings guidance that surrounds the consensus estimate.
Regeneron (REGN) said the U.S. FDA issued a complete response letter for the sBLA for ARCALYST, its injection for subcutaneous use for the prevention of gout flares in patients initiating uric acid-lowering therapy.
Seagate Technology (STX) reported fourth quarter adjusted earnings and revenues that trailed estimates. The company also announced the appointment of Gary Gentry as senior VP, solid state drive business.
PMC-Sierra's (PMCS) second quarter non-GAAP earnings fell to 9 cents per share from 17 cents per share last year. Net revenues fell 19 percent to $137.8 million. The results were below estimates.
Humana (HUM) reported second quarter earnings that came in below expectations, and its consolidated revenues also trailed estimate. The company lowered its full year earnings guidance, which is below the consensus estimate. At the same time, it maintained its revenue guidance, which surrounds the consensus estimate.
Wasau Paper's (WPP) second quarter adjusted earnings came in line with estimates, while its revenues trailed expectations.
Cirrus Logic (CRUS) reported first quarter adjusted earnings of 22 cents per share, ahead of the 21 cents per share consensus estimate. Revenues rose 7 percent to $99 million, below the $100.94 million consensus estimate. The company issued above-consensus guidance for its second quarter.
Pfizer Inc. (PFE) reported second quarter profit that increased from the same period previous year. The company also announced that it plans to file for a potential initial public offering of up to a 20% ownership stake in the Animal Health Business, Zoetis.
Kulicke & Soffa's (KLIC) third quarter profit and revenue declined from the year-ago quarter, but were above Wall Street view. The company also guided its fourth quarter net revenue above the consensus estimate.
Archer Daniels Midland (ADM) said its fourth quarter profit plunged from the year-ago quarter. Net sales and other operating income were below analysts' projection.
Allstate (ALL), Arthur J. Gallagher (AJG), Big 5 Sports (BGFV), BMC Software (BMC), Career Education (CECO), CB Richards Ellis (CBG), Cloud Peak Energy (CLD), Cray (CRAY), Digital River (DRIV), Dreamworks Animation (DWA), Edison (EIX), Electronic Arts (EA), FMC Corp. (FMC), Genworth Financial (GNW), Hanesbrands (HBI), Kimco Realty (KIM), Peet's Coffee (PEET), Pioneer Natural Resources (PXD), PolyOne (POL), Renaissance Re (RNR), Spansion (CODE), Sonus Networks (SONS) and Take-two Interactive (TTWO) are among the companies due to release their quarterly earnings after the markets close.
by RTT Staff Writer
For comments and feedback: email@example.com