The major U.S. index futures are pointing to a mixed opening on Tuesday, with sentiment delicately poised as traders weigh uncertainty on one hand and optimistic earnings reports on the other. In Asia, mood continued to be sour, as lingering concerns over possible attempts by China to rein in growth and the anxiety triggered by S&P's reduction of Japan's sovereign debt rating outlook. The European markets are also testing waters amid this uncertainty.
U.K. turned in anemic growth in the fourth quarter, although the quarter signaled a technical end to the recession there. Against this backdrop, traders may look ahead to the two house prices surveys and the consumer confidence report for gaining clarity on the economic milieu.
U.S. stocks opened Monday's session higher, as bargain hunters thronged the Street following three sessions of sharp declines. Thereafter, amid the release of a disappointing housing market report, the major averages showed some indecision before closing modestly higher.
The Dow Industrials gained 23.88 points or 0.23% to end at 10,197 and the Nasdaq Composite Index advanced 5.51 points or 0.25% to 2,211, while the S&P 500 Index moved up 5.02 points or 0.46% to 1,097.
Eighteen of the thirty Dow components closed the session higher, with Caterpillar (CAT) (up 1.64%), General Electric (GE) (up 1.61%), Intel (INTC) (up 2.06%) and Hewlett-Packard (HPQ) (up 2.06%) advancing the most in the session. On the other hand, American Express (AXP) tumbled 2.07%.
Among the sector indexes, the Dow Jones U.S. Basic Materials Average rose close to 1% and the NYSE Arca Oil Index gained 1%. The Philadelphia Oil Service Index rallied 1.46% compared to a 1.42% gain by the Philadelphia Semiconductor Index. However, the NYSE Arca Gold Bugs Index receded 1.45%.
On the economic front, existing home sales fell 16.7% month-over-month to a seasonally adjusted annual rate of 5.45 million units in December compared to 6.54 million units in November. Economists had estimated a more modest decline to 5.90 million units. Inventories as measured by months of supply rose to 7.2 months from 6.5 months. The median sales price of an existing home rose 1.5% year-over-year and moved up 4.9% month-over-month to $178,300.
According to the National Association of Realtors, about 43% of the buyers were first-time buyers, who may have taken advantage of the first time homebuyers credit. Therefore, the recovery of the housing market faces risk once the stimulus measures are withdrawn.
Commodity, Currency Markets
Crude oil futures are currently trading at $74.92 a barrel, down $0.81 a barrel. On Monday, the commodity snapped its losing streak amid the rebound by the equity markets, gaining $0.72 to $75.26 a barrel.
Gold futures are receding $8.30 to $1,088.50 an ounce after advancing $7.10 to $1,096.80 an ounce in the previous session.
Among currencies, the U.S. dollar is trading at 80.67 yen, stronger than the 90.278 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.4072.
Asia
The major Asian averages ended Tuesday's session mostly lower despite Wall Street showing some resistance in the previous session. The Indian and the Australian markets were closed for public holidays.
Japan's Nikkei 225 average, which managed to hold above the unchanged line in the morning, retreated by the early afternoon and experienced a steady sell-off to close down 187.41 points or 1.78% at 10,325, its lowest close since December 21st.
A majority of stocks declined in the session, although some pharma, brewery and printing stocks showed strength. The decline came amid a widely expected central bank decision to leave interest rates unchanged at 0.10%. The weakness may have been triggered by disappointment over the central bank not announcing any fresh measure to stimulate growth in the deflation-plagued economy, while the yen's strength also contributed to the sell-off.
The bank retained its assessment of the domestic economy, saying growth is picking up mainly due to various policy measures taken at home and abroad, although it said there is not yet sufficient momentum to support a self-sustaining recovery in domestic private demand. In another development, rating agency S&P downgraded its outlook on Japan's sovereign debt rating to 'negative' from 'stable', citing the government's diminishing fiscal flexibility and warned of a possible ratings downgrade.
A separate report released by the Bank of Japan showed that the corporate services price index declined 1.5% annually in December, in line with expectations, although slower than the 2.2% decline in November. On a monthly basis, the index remained unchanged compared to a 0.2% decline in the previous month.
Hong Kong's Hang Seng Index opened slightly higher, but selling pressure dragged the index lower in early trading. After seeing further losses over the course of trading, the index closed down 428.92 points or 2.08% at 20,170. Most index components ended lower, but Hutchison, Hong Kong Electric and China Resource Power advanced.
The Taiwanese Weighted Average slumped 3.48% and the South Korean Kospi ended down 1.97%. Meanwhile, the Chinese Shanghai Composite Index lost 2.42%.
Europe
The major European averages are trading mixed on Tuesday after ending lower for five straight sessions. The French CAC 40 Index and the U.K. FTSE Index are moving down 0.31% and 0.10%, respectively, while the German DAX Index is rising 0.03%.
In corporate news, Swiss drug giant Novartis (NVS) reported a 20% increase in its fourth quarter net sales to $12.93 billion, while earnings per share rose to $1.01 per share from 66 cents per share last year. Analysts estimated earnings of $1.10 per share on revenues of $12.04 billion. The company also announced the appointment of Joe Jimenez as CEO, completing the CEO succession process that began in 2008. Novartis also announced an increase in its dividend to 2.10 Swiss francs per share for 2009.
German engineering giant Siemens (SI) said its first quarter earnings rose to 1.53 billion euros from 1.23 billion euros, but revenues fell 12% to 17.35 billion euros.
A report released by the German Federal Statistical Office showed that the German import price index fell 1% year-over-year in December. However, the decline was less severe than the 5% drop in the previous month Economists had estimated a steeper 1.5% decline. The export price index edged down 0.4% compared to the 1.7% decline in November. On a monthly basis, import prices and export prices increased 0.5% and 0.2%, respectively.
French consumer spending rose 2.1% in December compared to the previous month, according to a report released by INSEE. In November, consumer spending had risen at a revised 0.1% rate. Annually, consumer spending rose 5.9% in December compared to the 3.5% increase in the previous month.
Meanwhile, the European Central Bank reported that the euro zone reported a current account surplus of 0.1 billion euros in November compared to deficit of 4.6 billion euros in October. The trade surplus, especially the surplus on trade in services, declined from the previous month and the deficit on the income account increased.
Economic data from the biggest euro zone economy was upbeat, with the Ifo Institute's survey revealing that the German business climate index rose to 95.8 in January compared to a revised reading of 94.6 for December. Economists had expected a reading of 95.1. The current conditions index rose 0.8 points to 91.2, while the expectations index increased 1.7 points to 100.6.
The U.K.'s Office for National Statistics released its preliminary fourth quarter GDP report, showing 0.1% sequential growth following GDP declines in each of the previous six quarters. Economists had expected 0.5% growth for the quarter. On a year-over-year basis, GDP rose 3.2%, faster than the 3% growth expected by economists.
U.S. Economic Reports
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 5% year-over-year decline in the 20-city composite house price index for November following a 7.28% drop in the previous month.
The Conference Board is scheduled to release its consumer confidence report for January at about 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 rose to 53.5 in December.
In December, the consumer confidence index rose to 52.9 compared to a revised reading of 50.6 in November. The expectations index rose 5.3 points to its highest level since December 2007, while the present situation index slipped 2.4 points to its lowest level since February 1983. Reflecting soft labor market conditions, those that said jobs are plentiful fell to the lowest level since December 1982.
The Federal House Finance Agency, or FHFA, is set to release its house price index for November at 10 AM ET. The index is a weighted, repeat-sales index that measures average price changes of single-family houses in repeat sales or refinancings on the same properties. Economists estimate the increase in house prices to slow to a 0.2% rate from 0.6% in the previous month.
Earnings
Baker Hughes (BHI) reported fourth quarter net income of 27 cents per share, notably lower than $1.41 per share in the year-ago quarter. The recent quarter's results included 16 cents per share in charges. Revenues declined 24% to $3.19 billion. Analysts' estimates, which typically exclude one-time items, called for earnings of 35 cents per share on revenues of $2.33 billion.
DuPont (DD) reported a fourth quarter profit of 44 cents per share compared to a loss of 28 cents per share last year. Sales rose 10% year-over-year to $6.4 billion. Analysts estimated earnings of 41 cents per share on revenues of $6.16 billion. The company raised its 2010 earnings guidance to $2.15-$2.45 per share from $2.10-$2.40 per share compared to the $2.01 per share consensus estimate.
Verizon's (VZ) fourth quarter results revealed a loss of 23 cents per share compared to earnings of 43 cents per share last year. On an adjusted basis, the company reported earnings of 54 cents per share, lower than the year-ago earnings of 43 cents per share. Operating revenues climbed to $27.09 billion from $24.65 billion last year. Analysts estimated earnings of 54 cents per share on revenues of $27.33 billion.
Travelers Co. (TRV) said its fourth quarter operating income rose to $2.12 per share from $1.58 per share in the year-ago quarter. Net premiums written fell 4% to $5.19 billion. The consensus estimates called for earnings of $1.49 per share on revenues of $5.26 billion.
Delta Airlines (DAL) reported a net loss of 27 cents per share for the fourth quarter . On a GAAP basis the company's operating revenues rose 1% year-over-year to $6.8 billion. On a combined basis, including contributions from Northwest Airlines, operating revenues fell 12%. Analysts estimated a loss of 24 cents per share on revenues of $6.86 billion.
Johnson & Johnson (JNJ) fourth quarter sales rose 9% to $16.6 billion. The company's adjusted net earnings were $1.02 per share, up 8.5% from the year-ago period. Analysts estimated earnings of 97 cents per share on revenues of $15.70 billion.
Stocks in Focus
Apple (AAPL) could once again prove to be the apple of investors' eye after it reported first quarter earnings of $3.67 per share compared to the year-ago's $2.50 per share and revenues climbed to $15.68 billion from $11.88 billion. The results were way ahead of analysts' estimates, which called for earnings of $2.07 per share on revenues of $12.06 billion.
Sales of Macintosh computers rose 33% year-over-year to 3.36 million and iPhone sales rose 100% to 8.7 million units, while its ageing iPod saw unit sales of 21 million. For the second quarter, the company estimates revenues of $11 billion to $11.4 billion and earnings of $2.06-$2.18 per share. Analysts estimate fiscal year second quarter earnings of $1.77 per share on revenues of $10.37 billion.
Texas Instruments (TXN) moved lower in Monday's after hours session despite reporting an increase in its fourth quarter revenues to $3.01 billion from $2.49 billion last year. The company's earnings per share surged up to 52 cents from 8 cents in the year-ago period. Analysts estimated earnings of 49 cents per share on revenues of $2.98 billion. For the first quarter, the company expects earnings of 44-52 cents per share on revenues of $2.95 billion to $3.19 billion. The consensus estimates call for earnings of 43 cents per share on revenues of $2.83 billion.
Novo Nordisk (NVO) may gain ground after it announced that the FDA has approved its new drug application for Victoza, the first once-daily human glucagons-like peptide-1 analog for the treatment of type 2 diabetes. The company noted that the treatment is used as an adjunct to diet and exercise to improve blood sugar control in adults with type 2 diabetes mellitus.
Jacobs Engineering (JEC) is likely to react to its announcement that its first quarter net earnings declined to 58 cents per share from 94 cents per share last year. Revenues fell to $2.5 billion from the year-ago's $3.2 billion. Analysts estimated earnings of 58 cents per share on revenues of $2.48 billion. Total backlogs as of January 1st 2010 were $14.9 billion compared to $16 billion as of January 2nd, 2009.
Albemarle (ALB) rose modestly in Monday's after hours session after it reported that its fourth quarter net sales rose 8% year-over-year to $558.2 million. The company's adjusted earnings rose 54% to 64 cents per share. The consensus estimates called for earnings of 57 cents per share on revenues of $528.87 million.
Crane (CR) could see some activity after it reported fourth quarter net income attributable to common shareholders of 81 cents per share compared to a net loss of 14 cents per share a year-ago. Excluding special items, the company reported net income of 57 cents per share, up from 56 cents per share last year. Sales fell 8% to $545 million. Analysts, on average, estimated earnings of 54 cents per share.
Kilroy Corp. (KRC) may move in reaction to its announcement that its fourth quarter funds from operations totaled 39 cents per share compared to 73 cents per share last year. Revenues from continuing operations fell to $67.38 million from $72.28 million in the year-ago period. Analysts' estimates that typically exclude one-time items called for funds from operations of 40 cents per share on revenues of $68.75 million.
Live Nation (LYV) could react to its announcement that it has completed its merger with Ticketmaster Entertainment (TKTM) following the receipt of regulatory clearances and approvals from all government authorities. Following the completion of the merger, Standar & Poor's announced that NCI (NCIT) would replace Ticketmaster in the S&P SmallCap 600 Index after the close of trading on Monday, February 1st.
RLI Corp. (RLI) is expected to see some activity after it reported fourth quarter operating earnings of $1.17 per share compared to $1.30 per share last year. The company's consolidated revenues rose 26.3% to $145.94 million. Analysts estimated earnings of 97 cents per share on revenues of $137.79 million.
Parexel (PRXL) moved to the upside in Monday's after hours session after reporting non-GAAP second quarter earnings of 26 cents per share compared with 23 cents per share last year. Revenues were $337.98 million. Analysts estimated earnings of 22 cents per share on revenues of $381.81 million.
Packaging Corp. of America (PKG) receded in Monday's after hours session after it reported that its fourth quarter adjusted earnings fell to 16 cents per share from 30 cents per share last year. The company attributed the decline to lower containerboard and corrugated products price and mix, which was partially offset by higher volume and lower energy and transportation costs. Net sales fell to $532.2 million, lower than $546.1 million last year. The consensus estimates call for earnings of 13 cents per share on revenues of $510.01 million. For the first quarter, the company estimates earnings of 12 cents per share compared to the 17 cents per share consensus estimate.
Zion Bancorp. (ZION) rose over 4% in Monday's after hours session after it reported a fourth quarter net loss applicable to common shareholders of $1.26 per share compared to a net loss of $4.37 per share last year. Taxable-equivalent revenues fell 10.07% to $462.61 million. Analysts estimated a loss of $1.64 per share on revenues of $590.39 million. However, net interest margin shrunk to 3.81% from 4.20%.
Amgen (AMGN) could be in focus after it reported that its fourth quarter adjusted earnings fell 1% year-over-year to $1.05 per share but revenues rose 8% year-over-year to $3.8 billion. Analysts estimated earnings of $1.13 per share on revenues of $3.85 billion. For 2010, the company estimates adjusted earnings of $5.05-$5.25 per share on revenues of $15.1 billion to $15.5 billion. The consensus estimates call for earnings of $5.12 per share on revenues of $15.31 billion.
JDA Software (JDAS) is likely to react to its announcement that its fourth quarter revenues rose to $107.1 million from $106.2 million in the year-ago period. Adjusted non-GAAP earnings were flat at 43 cents per share. The Street estimated earnings of 47 cents per share on revenues of $103.43 million.
SRA International (SRX) could be in focus after it announced a deal to buy privately held environment consulting firm Perrin Quarles Associates.
FMC Technologies (FTI) is likely to see some buying interest after it announced a deal with Statoil to design and supply subsea equipment to support its Snore field located in the North Sea. The contract will result in $40 million in revenues to FMC.
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June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.