The major U.S. index futures are pointing to a lower opening on Tuesday, with sentiment taking a hit from lackluster results reported by aluminum giant Alcoa (AA). The less encouraging results should stir concerns of the profit recession continuing unabated. The Chinese central bank's announcement of raising the reserve requirement, seen as a precursor for an interest rate hike, should come as dampener, even as traders debate over the sustainability of the recovery.
An economic report released earlier in the day showed a wider than expected deficit for November, mainly as a results of rise in oil imports. Most of the pre-announcements announced yesterday after the markets closed were bordering on the negative. Although there are not many meaningful catalysts from Main Street, traders may express apprehension ahead of some key market moving economic numbers to be released on Thursday and Friday.
After robust growth data from China and a consequent rise in oil prices gave a flying start to the U.S. markets on Monday, sentiment deteriorated thereafter. The major averages dipped below the unchanged line in early trading, as apprehensions over Alcoa's earnings and a lack of catalysts created uncertainty and pushed traders to the sidelines.
After showing some volatility, the Dow Industrials rose steadily to close up 45.80 points or 0.43% at 10,664, while the S&P 500 Index moved back and forth across the unchanged line for much of the session before closing up 2 points or 0.17% at 1,147. However, the Nasdaq Composite continued to languish in negative territory to close down 4.76 points or 0.21% at 2,312.
The breadth among the Dow components was more or less even, with sixteen of the thirty stocks closing higher, while the remaining fourteen declined. Alcoa rose 2.53% ahead of its earnings and Caterpillar (CAT) surged up 6.28%. Chevron (CVX), Coco Cola (KO), United Technologies (UTX), Wal-Mart Stores (WMT) and Exxon Mobil (XOM) also posted notable gains. On the other hand, American Express (AXP), Boeing (BA), Disney (DIS), Home Depot (HD), IBM (IBM) and Microsoft (MSFT) declined sharply.
Among the sector indexes, the Dow Jones Transportation Average rose close to 1% and the Dow Jones Utility Average gained 1.05%. On the other hand, the Philadelphia Oil Service Index fell by about 1%.
Commodity, Currency Markets
Crude oil futures are receding $1.54 to $80.98 a barrel after declining $0.21 to $82.52 a barrel on Monday. Gold futures are currently slipping $4.60 to $1,146.80 an ounce. In the previous session, the precious metal fell $6.30 to $1,151.40 an ounce.
Among currencies, the U.S. dollar is trading at 92.44 yen compared to the 92.088 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.4476 compared to yesterday's $1.4513.
Asia
The major Asian markets ended Tuesday's session on a mixed note, with the clouding of the corporate profit outlook following disappointing results from Alcoa weighing on the markets.
Japan's Nikkei 225 average, which opened after Monday's public holiday, showed indecision in the morning before advancing sharply in the afternoon. The index closed up 80.82 points or 0.75% at 10,879.
Auto stocks advanced strongly, while other exporters and construction stocks also showed some strength. On the other hand, financial, pharma, retail and brewery stocks showed some weakness. Hitachi, IHI Corp., Komatsu, Kubota, Nippon Steel, Okuma, Panasonic and Sumitomo Metal Industries were among the notable gainers.
A report released by Japan's Finance Ministry showed that Japan's current account surplus increased 76.9% year-over-year to 1.10 trillion yen in December, exceeding the consensus estimate for a 999.6 billion yen surplus. The increase reflected a reversal to a trade surplus of 490.6 billion yen from a deficit of 92.2 billion yen in the year-ago period.
A report released by the Bank of Japan showed that bank lending in Japan fell 1.2% year-over-year in December, marking the first decline since January 2006. Separately, the Bank of Japan said the L money supply, which is the broadest measure of money supply in the country, was up 1.1% year-over-year in December after a revised 1.2% gain in the prior month. On a monthly basis, L money supply fell 1.3%.
Australia's All Ordinaries opened unchanged, but it declined steadily over the course of the session to close down 49.60 points or 1% to 4,932, snapping a 2-session winning run. Energy and material stocks declined sharply on a day when the market witnessed broad based weakness.
Hong Kong's Hang Seng Index languished in negative territory for the better part of the session to close down 84.88 points or 0.38% at 22,327. Financial stocks led the day's decline, while resource, retail and some property stocks gained ground.
Among other markets in the region, Chinese Shanghai Composite Index climbed 1.91% ahead of a central bank announcement of its decision to raise the yuan deposit reserve ratio for banks. The People's Bank of China today announced that it raised its reserve requirement ratio by 0.5%, effective January 18th. South Korea's Kospi advanced modestly, while India's Sensex receded moderately despite encouraging results from Infosys (INFY) and data showing that industrial production rose 11.7% year-over-year in November.
Europe
The major European markets are lower across the board on Tuesday after the Chinese move to rein in lending triggered fears of a slowdown in growth domestically and the world at large.
The French CAC 40 Index and the German DAX Index are falling 1.36% and 1.77%, respectively, while the U.K.'s FTSE 100 Index is moving down 1.30%.
In economic news, a report released by the Royal Institute of Chartered Surveyors showed that a net 30% saw house prices rising in December, below November's three-year high of 35%. That was in contrast to expectations for a balance of 37%. The Institution said the loss of momentum was due to the traditional slowdown in activity during the Christmas season.
A separate house price survey by the U.K. Department of Communities and Local Government said house prices in the U.K. rose 1.7% month-over-month in November. Annually, house prices were up 0.6%.
Meanwhile, survey results by the Bank of France showed that confidence among French industries and service providers continued to rise at the end of 2009. A measure for industrial confidence climbed to 101 in December from 99 in November. Economists had forecast the reading to remain at 99.
U.K.'s seasonally adjusted deficit on trade in goods and services fell to 2.9 billion pounds in November from 3.1 billion pounds in October, a reported released by the Office for National Statistics showed. Economists expected a shortfall of 3 billion pounds for the month. U.S. Economic Reports
With the value of imports increasing at a faster pace than the value of exports in the month of November, the Commerce Department reported that the U.S. trade deficit widened by more than economists had been expecting.
The trade deficit widened to $36.4 billion in November from a revised $33.2 billion in October. Economists had expected the deficit to widen to $34.6 billion from the $32.9 billion originally reported for the previous month.
Philadelphia Federal Reserve Bank President Charles Plosser is scheduled to speak about the economic outlook to the Entrepreneurs Forum of Greater Philadelphia at 7 PM ET.
Earnings
Infosys (INFY) reported an increase in its third quarter earnings on an IFRS basis to 59 cents per ADS, which exceeded the consensus estimate of 51 cents per ADS. However, on Indian GAAP basis and in rupee terms, earnings fell to 27.72 rupees per share from 28.63 rupees per share. Revenues on an IFRS basis rose to $1.232 billion from the year-ago's $1.171 billion and also exceeded the consensus estimate of $1.17 billion. The company issued above-consensus guidance for the fourth quarter and upwardly revised its outlook for the full year ending March 2010.
KB Home (KBH) reported that its fourth quarter revenues fell 27% year-over-year to $674.6 million, ahead of the consensus estimate of $577.54 million. The company reported a net profit of $1.31 per share, including a tax benefit, compared to a pre-tax loss of $3.96 per share last year, with the year-ago loss stemming mainly from non-cash charges related to inventory, joint venture impairments and land option contract abandonments and related to goodwill impairment.
SUPERVALUE (SVU) said its third quarter net sales were $9.2 billion, lower than $10.2 billion. The company reported earnings of 51 cents per share compared to a loss of $13.95 per share in the year-ago period. On an adjusted basis, the year-ago's earnings would have been 62 cents per share. Analysts estimated earnings of 40 cents per share on revenues of $9.43 billion. For the full year, the company expects non-GAAP earnings of $2.01-$2.11 per share.
Stocks in Focus
Alcoa (AA) tumbled in Monday's after hours session after it reported that its fourth quarter loss, including 27 cents per share in charges, was 28 cents per share compared to a loss of $1.49 per share in the year-ago period. Revenues climbed 18% year-over-year to $5.4 billion. The consensus estimates called for earnings of 6 cents per share on revenues of $4.82 billion. Analysts' estimates typically exclude one-time items.
Brown Shoe (BWS) is likely to move in reaction to its announcement ahead of a presentation at an investor conference. The company said in the release that same store sales at its Famous Footwear division rose 7% for the nine weeks ended January 2nd, 2010, while same store sales at its Specialty Retail division increased 4.9%.
Lawson Software (LWSN) moved lower in Monday's after hours session after it announced that it has closed its acquisition of Healthvision Solutions through the acquisition of the latter's parent Quovadx Holdings. The deal was valued at $160 million and closed on January 11th, 2010.
Phillips-Van Heusen (PVH) is expected to gain ground after it said it is upwardly revising its fourth quarter earnings per share guidance to 52-54 cents per share from its previous guidance of 38-42 cents per share. The company expects revenues to rise 7%-8% year-over-year to $603 million to $608 million. Analysts had been expecting earnings of 44 cents per share on revenues of $595.05 million. The company attributed the optimism to strong performance throughout the quarter, including during the holiday season. The company also raised its guidance for the full year.
Shoe Carnival (SCVL) is likely to recede after it said its expects fourth quarter net sales to be in the range of $168 million to $169 million, which is below the consensus estimate of $169.36 million. The company now expects same store sales to increase by 7%-8%, higher than its earlier estimate of 3%-5% growth.
Electronic Arts (ERTS) tumbled in Monday's after hours session after it cut its fiscal 2010 non-GAAP revenue guidance to $4.125 billion to $4.2 billion. The company also lowered its non-GAAP earnings per share guidance to 40-55 cents per share from its previous estimate of 70 cents to $1 per share. The Street had been expecting earnings of 79 cents per share on revenues of $4.26 billion. For the third quarter, the company expects non-GAAP earnings of 29-33 cents per share on revenues of $1.33 billion to $1.35 billion. Analysts estimate earnings of 56 cents per share on revenues of $1.42 billion for the quarter.
Hutchinson Technology (HTCH) could also be in focus after it announced preliminary first quarter results, expecting net sales of $108.3 million. The company also said it expects net income to be modestly above break-even. Analysts estimates, which typically exclude one-time items, call for a loss of 1 cent per share on revenues of $104.99 million.
Danaher (DHR) is likely to move in reaction to its announcement that it has acquired and received acceptances in respect of about 97% of the currently issued shares of U.K.-based Genetix in relation to its previously announced offer.
WD-40 Co. (WDFC) may see some activity after it announced that its first quarter sales fell 7% to $77.7 million. The company's earnings rose to 56 cents per share from the year-ago's 46 cents per share. Analysts estimated earnings of 51 cents per share on revenues of $81.28 million. The company expects full year sales of $298 million to $318 million and earnings of $1.80-$1.95 per share. The consensus estimates call for earnings of $1.92 per share on revenues of $320.88 million.
Heinz (HNZ) could be in focus after it reaffirmed its earnings per share from continuing operations guidance for fiscal 2010 at $2.72-$2.82 per share. The company noted the earnings include a preliminary estimate from the currency devaluation in Venezuela. Analysts' estimates, which typically exclude one-time items, call for earnings of $2.82 per share on revenues of $10.61 billion.
Chevron (CVX) receded in Monday's after hours session after it issued its interim update for its fourth quarter. The company said it expects fourth quarter earnings to be lower than in the third quarter of 2009, as weak refining margins are likely to drag downstream results.
GameStop (GME) is likely to see some activity after it unveiled its 2010 capital allocation plan, which calls for providing ample investment capital for continued aggressive new store expansion worldwide. Additionally, the plan allows for the buyback of about $300 million worth of shares. The company expects the share repurchase program to be accretive to EPS by about 10%.
Shanda Interactive Entertainment (SNDA) may react to its announcement that its wholly-owned subsidiary Shanda Online has appointed Xu Chaojun as its Chief Operating Officer.
For comments and feedback contact: editorial@rttnews.com
June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.