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Wall Street Fidgety As Cypriot Crisis Worsens

Wall Street Fidgety As Cypriot Crisis Worsens
3/21/2013 6:30 AM ET

Sentiment on Wall Street has turned nervous, as reflected by the U.S. index futures, which point to a mixed opening on Thursday. Cyprus' financial crisis has deepened, with the country unable to arrive at an alternative proposal after the bank levy plan failed to get the backing of the Parliament. At the same time, the European Central Bank has toughened its stance and offered a Monday deadline to strike a deal. Meanwhile, private sector activity data from the region also disappointed to the downside.

Domestically, database and applications software giant Oracle (ORCL) gave reasons for the Street to worry with its disappointing results. Traders may also look forward to a trio of first-tier economic data on home sales, jobless claims and the manufacturing sector.

As of 6:15 pm ET, the Dow futures are moving up 1 point, while the S&P 500 futures are slipping 1.60 points and the Nasdaq 100 futures are receding 5.25 points.

U.S. stocks advanced on Wednesday, as the Fed renewed its pledge to maintain an ultra loose monetary policy and continue its bond-buying program.

On the economic front, the Labor Department is scheduled to release its jobless claims report at 8:30 am ET. Economists expect jobless claims for the week ended March 21st to rise to 340,000 from 332,000 in the previous week.

The Federal House Finance Agency is due to release its house price index for January at 9 am ET. The house price index expected to increase by 0.7 percent month-over-month following a 0.6 percent increase in December.

The National Association of Realtors will release its existing home sales report for February at 10 am ET. The consensus expectations call for an increased in existing home sales to a seasonally adjusted annual rate of 5.01 million units from 4.92 million units in January.

Around the same time, the Philadelphia Federal Reserve is scheduled to release the results of its manufacturing survey for March. The general business conditions index based on the survey is expected to improve to -1.5 from -12.5 in February. Also at 10 am ET, the Conference Board will release its leading economic indicators index for February. Economists expect the index to increase by 0.4 percent following a 0.2 percent increase in January.

In corporate news, Oracle (ORCL) reported third quarter non-GAAP earnings rose 5 percent to 65 cents per share. Revenues fell 1 percent to $9 billion. The results missed expectations.

Jabil Circuit (JBL) reported second quarter earnings that missed estimates, while its revenues were ahead of expectations. The company's third quarter guidance was weak. Guess?, Inc. (GES) reported fourth quarter results that exceeded estimates, while its guidance was weak.

Pacific Sunwear (PSUN) reported mixed fourth quarter results and issued weak. Raytheon (RTN) announced a 10 percent increase in its quarterly dividend to $2.20 per share.

Micron Technology (MU), Nike (NKE), TIBCO Software (TIBX) and Wet Seal (WTSLA) are among the companies due to release their quarterly results after the close of trading.

The major Asian markets closed mixed despite the positive lead from Wall Street and better than expected Chinese manufacturing data. The Cyprus bailout imbroglio worked on the nerves of the markets, creating some indecision. The Japanese, Chinese, Singaporean and Taiwanese markets closed higher, while the rest of the major markets retreated.

Japan's Nikkei 225 average closed up 167.46 points or 1.34 percent at 12,636. Australia's All Ordinaries experienced volatility throughout the session before closing down 5.80 points or 0.12 percent at 4,977. Hong Kong's Hang Seng closed at 22,226, down 30.56 points or 0.14 percent.

On the economic front, the results of a manufacturing survey by Markit showed that Chinese manufacturing activity accelerated in March.

European stocks have opened lower and are currently seeing weakness, as traders remain concerned about the developments in Cyprus. Additionally, data showing deepening of the contraction in private sector activity in the eurozone is also undermining sentiment.

Even as Cyprus is frantically putting together a Plan B to secure bailout financing, the European Central Bank has issued an ultimatum. The apex bank has warned that it would extend emergency funding for the nation's banks only until Monday.

In corporate news, French luxury goods maker Hermes reported higher profit for 2012 on strong revenue growth. Meanwhile, Swedish retailer H&M reported a decline in its pre-tax profits, hurt by markdowns to spur sales amid a slowing economic environment.

On the economic front, Markit's survey showed that the private sector in the eurozone experienced a deeper contraction in March. Flash estimates released today showed that the composite purchasing managers' index measuring activity both in the manufacturing and the service sectors fell 1.4 points to 46.5 compared to the estimated reading of 48.2.

by RTT Staff Writer

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