The uneasy rally the markets have been witnessing may be put to test, as the momentum falters amid a lack of solid fundamental reasons. The index futures currently point to a lower start for Wall Street stocks on Wednesday. The recent gains have largely been on expectations of stimulus support despite economic data suggesting weaker fundamentals and earnings season bringing forth revenue disappointments one after another. Against the backdrop, the gains look unsustainable and the markets may be in for some consolidation before some meaningful catalysts emerge.
As of 6:15 am ET, the Dow futures are slipping 35 points, the S&P 500 futures are receding 4.30 points and the Nasdaq 100 futures are moving down 4.75 points.
U.S. stocks advanced for the third straight session on Tuesday, ending at 3-month highs, as hopes of central bank interventions to stem the eurozone debt crisis solidified.
On the economic front, the U.S. Labor Department is also scheduled to release its preliminary report on second quarter non-farm productivity and unit labor costs at 8:30 AM. Economists expect productivity to have risen by 1.3 percent, while unit labor costs are expected to have increased by 0.9 percent. In the first quarter, productivity fell 0.9 percent.
The Energy Information Administration is scheduled to release its weekly petroleum inventory report for the week ended August 3rd at 10:30 am ET.
In corporate news, Disney's (DIS) third quarter earnings exceeded expectations, while its revenues missed forecast. Meanwhile, Live Nation's (LYV) second quarter results trailed expectations.
Priceline.com (PCLN) reported second quarter adjusted earnings that beat estimates, while its revenues were shy of estimates. The company's third quarter guidance was below estimates.
XL Group (XL) and Protective Life (PL) reported better than expected second quarter operating earnings. Cree (CREE) reported better than expected fourth quarter results, while its guidance was lackluster.
Express Scripts (ESRX) said its second quarter adjusted earnings rose to 88 cents per share from 71 cents per share last year, with the earnings exceeding expectations. Revenues also beat estimates. The company also raised its adjusted earnings outlook for the year.
Dean Foods (DF) reported second quarter adjusted earnings of 36 cents per share on revenues of $3.1 billion. The earnings were ahead of estimates, while the revenues missed estimates. The company raised its adjusted earnings per share guidance to $1.18-$1.28 per share. Separately, the company announced that its WhiteWave Foods unit has filed for offering up to 20 percent of its stock in a public offering.
Allscripts-Misys Healthcare (MDRX), Dun & Bradstreet (DNB), Hansen Medical (HNSN), Inter Parfums (IPAR), Jack in the Box (JBX), MBIA (MBI), Kinross Gold (KGC), News Corp. (NWSA), PAREXEL (PRXL), RealNetworks (RNWK), SunPower (SPWR) and Yamana Gold (AUY) are among the companies due to release their quarterly results after the markets close.
The major Asian markets ended mixed, as the gains in the past two sessions achieved on the back of stimulus hopes rendering sentiment cautious.
Japan's Nikkei 225 average ended at 8,881, up 77.85 points or 0.88 percent, advancing for the third straight session. Export and resource stocks found buying interest, while financial stocks came under selling pressure ahead of the Bank of Japan monetary policy announcement due tomorrow.
Australia's All Ordinaries hovered in positive territory for the bulk of the session before closing up 21.50 points or 0.50 percent at 4,333. Most sectors, with the exception defensive real estate, telecom and utility stocks, advanced.
Meanwhile, Hong Kong's Hang Seng Index edged down 7.03 points or 0.04 percent, with property stocks tumbling after the government reportedly reiterated its willingness to impose home-purchase restrictions.
On the economic front, Japan reported a bigger than expected current account surplus of 433.3 billion yen for June, according to a report released by Japan's Ministry of Finance. Meanwhile, the trade surplus for the month came in at 112 billion yen, which was below the 114.9 billion yen-surplus expected by economists.
European stocks are moving to the downside following three sessions of gains. In corporate news, miner Rio Tinto (RIO) reported a year-over-year decline in its first half underlying profits, although the drop was less than feared.
Fraport, the owner and operator of Frankfurt Airport, reported second quarter EBITDA that declined year-over-year and were slightly below analysts' consensus. Dutch financial services company ING reported a 22 percent drop in its second quarter profits due to higher loan loss provisions and its decision to reduce its exposure to troubled Spain. The company also decided not to pay an interim dividend.
A report released by the German Federal Statistical Office showed that Germany reported a trade surplus of 17.9 billion euros compared to the 14.6 billion euro-surplus expected by economists. However, exports fell 1.5 percent month-over-month compared to expectations for a more modest 1.3 percent drop.
The Bank of England released its quarterly inflation report, which showed that the bank now expects around 2 percent growth in two years, down from its earlier estimate for 2.6 percent growth. The bank also lowered its inflation outlook.
by RTT Staff Writer
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