A cautious undertone prevails on Wall Street on Wednesday after the major averages resisted a large-scale sell-off in recent sessions. Main Street activity gathers momentum, with the existing home sales data and FOMC minutes expected to provide some trading cues. Earnings have been mixed, with PC maker Dell (DELL: Quote) reporting insipid results and issuing bleak guidance, while homebuilder Toll Brothers (TOL) ringed in positive tidings. Oil is modestly weak and risk currencies are almost flat, with a negative bias. Traders may also focus on the developments on the eurozone debt crisis front.
As of 6:15 am ET, the Dow futures are down 18 points, the S&P 500 futures are slipping 2.90 points and the Nasdaq 100 futures are moving down 5 points.
Nervousness finally caught up with Wall Street on Tuesday, sending stocks moderately lower, despite most financial markets pricing in a definitive ECB action.
On the economic front, the National Association of Realtors is scheduled to release its report on existing home sales for July at 10 am ET. Economists estimate existing home sales of 4.50 million for the month compared to a 4.37 million-unit rate for June.
The Federal Reserve is due to release the minutes of its July 31st-August 1st meeting at 2 pm ET.
The Energy Information Administration is scheduled to release its weekly petroleum inventory report for the week ended August 17th at 10:30 AM ET.
Dell's second quarter non-GAAP earnings fell to 50 cents per share from 54 cents per share last year. Revenues fell 8 percent to $14.48 billion. The earnings were ahead of estimates, while the revenues trailed expectations. The company lowered its full year earnings outlook to at least $1.70 per share on a non-GAAP basis, while it expects a 2-5 percent sequential drop in third quarter revenues. The guidance was insipid.
Toll Brothers reported third quarter net income of 36 cents per share compared to 25 cents per share last year. Revenues rose to $554.32 million from $394.31 million last year. The results exceeded estimates.
Analog Devices' (ADI) third quarter earnings were in line, while its revenues were below expectations. The fourth quarter guidance was bordering on the negative. Intuit (INTU) reported below-consensus results for its fourth quarter. The full year guidance for 2013 was soft.
La-Z-Boy (LZB) reported first quarter earnings of 8 cents per share compared to earnings of 85 cents per share last year, which benefited from a reduction to certain valuation reserves. Dales rose 7.6 percent to $301.5 million. The earnings were in line, while the revenues beat estimates.
Williams-Sonoma's (WSM) second quarter results exceeded estimates, while its guidance surrounded the consensus estimate. Principal Financial Group (PFG) announced a 17 percent increase in its quarterly dividend to 21 cents per share.
Focus Media (FMCN), Guess? (GES), Hain Celestial (HAIN), Hewlett-Packard (HPQ), International Rectifier (IRF) Krispy Kreme (KKD), Pacific Sunwear (PSUN), Semtech (SMTC) and Synopsys (SNPS) are among the companies due to release their quarterly results after the markets close.
The major Asian markets retreated, in line with the negative sentiment that prevailed on Wall Street overnight. Sentiment also took a hit from a report released by Japan's Ministry of Finance showed that Japan's trade deficit came in at 517.38 billion yen in July compared to a surplus of 60.3 billion yen surplus in June. Exports fell 8.1 percent year-over-year, while imports rose 2.1 percent.
Japan's Nikkei 225 average closed down 25.18 points or 0.27 percent at 9,132. Most sectors, with the exception of defensive utility, bank and pharma stock, moved to the downside.
Australia's All Ordinaries languished below the unchanged line throughout the session amid some volatility before closing down 7.50 points or 0.17 percent at 4,403. Energy stocks declined sharply, serving as a drag. Hong Kong's Hang Seng Index closed 212.31 points or 1.06 percent lower at 19,888.
The major European markets are trading moderately lower after advancing in the previous session. The mood remains cautious as the Greek Prime Minister is due to meet Jean Claude Juncker, the head of the Eurogroup finance ministers, to seek an extension in the timeframe for implementing austerity measures.
In corporate news, BHP Billiton (BHP) reported a 35 percent drop in its second half profits, hurt by a drop in commodity prices. The company also said it would delay its $20 billion Olympic Dam copper expansion project. Danish wind turbine maker Vestas Wind Systems announced additional job cuts to the tune of 1,400 jobs as it reported a loss for its second quarter.
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by RTT Staff Writer
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