The major U.S. index futures are pointing to a lower opening on Tuesday, with the recovery theme getting a hit following the release of an economic report from across the Atlantic showing a dip in German business confidence. In reaction, commodities prices are experiencing weakness. However, corporate earnings were bordering on the positive, with home improvement retailer Home Depot (HD) reporting better than expected results and announcing an increase in its dividend.
Sentiment may largely track the results of the consumer confidence survey to be released shortly after the markets open. Activity may remain light, given the apprehensions of traders ahead of Federal Reserve Chairman Ben Bernanke's semi-annual Congressional testimony and the week's housing reports.
After showing a lack of direction for the better part of Monday's session amid a lack of any major catalysts, the major averages closed modestly lower. Traders expressed apprehension ahead of Federal Reserve Chairman Ben Bernanke's Congressional testimony on Wednesday and Thursday. The Dow Industrials ended down 18.97 points or 0.18% at 10,383 and the Nasdaq Composite Index receded 1.84 points or 0.08% to 2,242, while the S&P 500 Index fell 1.16 points or 0.10% to 1,108.
Nineteen of the thirty Dow components ended the session lower, with Chevron (CVX), 3M Co. (MMM) and Merck (MRK) leading the slide with declines of 1% declines. On the other hand, JP Morgan Chase (JPM) rose 2.05% and Bank of America (BAC) rose 2.08%.
Among sector indexes, the NYSE Arca Oil Index fell 0.90% compared to a 1.36% drop by the NYSE Arca Gold Bugs Index. The NYSE Arca Computer Hardware Index slipped 1.10%. However, the NYSE Arca Biotechnology Index rose 1.01% and the KWB Bank Index rallied 1.91%.
Commodity, Currency Markets
Crude oil futures for April delivery are trading down $1.59 at $78.72 a barrel in their first trading session as the front-month contract. The March futures expired at $80.16 a barrel on Monday, up $0.35.
Gold futures are moving down $3.50 to $1,109.60 an ounce. In the previous session, the precious metal receded $9 to $1,113.10 an ounce.
Among the currencies, the U.S. dollar is trading at 90.666 yen compared to the 91.1438 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.3571.
Asia
The major Asian markets closed Tuesday's session on a mixed note amid a lack of clear direction from Wall Street. A pullback in commodities prices also impacted sentiment.
Japan's Nikkei 225 average opened lower and declined steadily in the morning. While the index regained some ground in the afternoon, it still closed down 48.37 points or 0.47% at 10,352, off the lows of 10,280.
Pharma, technology, utility, auto, resource and heavy machinery stocks showed weakness in the session. On the other hand, construction and financial stocks closed mostly higher.
On the economic front, the minutes of the Bank of Japan's January monetary policy meeting showed that the central bank may keep interest rates at extremely low levels as it fights a deflationary environment domestically. Some committee members seem to think that the fiscal situation in Japan is very serious and therefore felt that it is all the more important to maintain market confidence in the conduct of fiscal and monetary policy.
Australia's All Ordinaries languished below the unchanged line for most the session before closing down 1.70 points or 0.04% at 4,731. Most sectors, with the exception of financial and utility stocks declined in the session. In the mining space, BHP Billiton, Fortescue, Incitec and Newcrest Mining declined, while Rio Tinto and Lihir Gold advanced. Among the four major banks, ANZ, Commonwealth Bank and Westpac rose, but National Australia Bank receded.
After seeing some weakness in the morning, Hong Kong's Hang Seng Index recovered by early afternoon and moved into positive territory. Thereafter, the index moved sideways to close up 245.73 points or 1.21% at 20,623. All index components, with the exception of China Unicom, Ping An and Swire Pacific, advanced.
Europe
The major European averages are extending their slide on Tuesday, as they opened higher, but surrendered their gains by late morning trading and are currently trading lower. The French CAC 40 Index and the German DAX Index are declining 0.44% and 0.73%, respectively, while the U.K.'s FTSE 100 Index is edging up 0.20%.
On the economic front, the results of the Ifo Institute's survey showed that Germany's business confidence index fell to 95.2 in February from 95.8 in January. The current assessment index fell 1.4 points to 89.8, while the expectations index continued to rise, advancing to 100.9.
Economists attribute the decline to a harsh winter and doubts about the recovery in Germany amid the fiscal crisis plaguing some of the countries in the euro zone. That said, it is believed that the underlying trend of the German recovery remains healthy.
Meanwhile, French Statistical Office INSEE reported that French consumer spending fell 2.7% month-over-month in January compared to the 1.3% increase in the previous month. Economists had expected a more modest decline of 1.1%. Spending on durable goods fell 7.8% and spending on other manufactured goods edged down 0.4%, while spending on textile-leather rose 1.6%. Annually, consumer spending rose 1.5%, slower than the 5.8% growth in December.
An inflation report released by INSEE showed that the French consumer price index rose 1.1% year-over-year in January compared to the 0.9% increase in December. On a monthly basis, consumer prices slipped 0.2%, partly reversing the 0.3% increase in the previous month. Economists had expected 1.1% growth compared to the previous year, but a 0.3% decline compared to the previous month.
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 3.1% year-over-year decline in the 20-city composite house price index for December.
The index declined 5.3% year-over-year in November, steeper than the 5% drop expected by economists. However, the decline was the smallest since September 2007. Four cities, Denver, Dallas, San Francisco and San Diego saw year-over-year gains.
The Conference Board is scheduled to release its consumer confidence report for February 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 fell to 55 in February.
The consumer confidence index rose to 55.9 in January from 53.6 in December, with the reading representing the highest level since September 2008. The present situation index rose about 5 points to 25, while the expectations index increased by 0.6 points to 76.
St. Louis Federal Reserve Bank President James Bullard will speak on regulatory reform to the Chartered Financial Analysts Virginia Society in Richmond, Virginia, at 5 PM ET.
Earnings
Medco Health (MHS) reported fourth quarter net revenues of $15.2 billion, up 17.6% year-over-year. The company's adjusted earnings rose to 70 cents per share from 54 cents per share last year. Analysts estimated earnings of 75 cents per share on revenues of $15.09 billion. The company reaffirmed its 2010 adjusted earnings guidance of $3.28-$3.38 per share compared to the $3.36 per share consensus estimate.
Home Depot (HD) reported fourth quarter earnings from continuing operations pf 18 cents per share compared to break-even results in the year-ago quarter. On an adjusted basis, the company's earnings from continuing operations were 24 cents per share. Sales fell 0.3% to $14.6 billion. The consensus estimates called for earnings of 17 cents per share on revenues of $14.07 billion. The company announced a 5% increase in its quarterly cash dividend to 23.625 cents per share. For 2010, the company expects sales growth of 2.5% and earnings per share from continuing operations of $1.79. Analysts estimate earnings of $1.73 per share on revenue growth of $66.43 billion.
Office Depot (ODP) said its fourth quarter sales fell 6% to $3.1 billion. The company reported a loss of 6 cents for the quarter compared to a loss of 73 cents per share last year. Sales fell 6% to $3.1 billion. Analysts expected a loss of 22 cents per share on revenues of $2.97 billion.
Cracker Barrel (CBRL) reported second quarter revenues of $632.6 million, up 0.4% year-over-year. The company's earnings per share rose 35% to $1.09. The consensus estimates called for earnings of 90 cents per share on revenues of $634.75 million. For the full year, the company estimates earnings of $3.35-$3.50 per share.
Stocks in Focus
RadioShack (RSH) saw notable weakness in Monday's after hours session despite saying its fourth quarter net sales and operating revenues rose 4.7% to $1.32 billion. The company's net income rose to 60 cents per share from the year-ago's 48 cents per share. Analysts estimated earnings of 59 cents per share on revenues of $1.32 billion.
Brocade Communications (BRCD) is likely to see some activity after it reported that its first quarter revenues rose 25% to $539.5 million. The company's non-GAAP earnings rose 27% to 19 cents per share. The consensus estimates called for earnings of 15 cents per share on revenues of $548.43 million.
Forest Oil (FST) may also be in focus after it reported fourth quarter adjusted earnings of 56 cents per basic sharecompared to 32 cents per basic share last year. Analysts estimated earnings of 60 cents per share on revenues of $255.99 million.
Microsoft (MSFT) and Amazon (AMZN) are likely to be in focus after they announced that they have signed a patent cross-license agreement that provides each company with access to the other's patent portfolio and covers a broad range of products and technology, including coverage for Amazon's e-reading device Kindle. Microsoft also said Amazon would pay Microsoft an undisclosed amount of money.
Helmerich & Payne (HP) could gain ground after Standard & Poor's announced that the company will replace IMS Health (RX) in the S&P 500 Index. IMS Health is being taken private by TPG Capital. Meanwhile, Prosperity Bancshares (PRSP) will replace Helmerich & Payne in the S&P SmallMidCap 400 Index and Interactive Intelligence (ININ) will replace Prosperity Bancshares in the S&P SmallCap 600 Index.
Wal-Mart (WMT) may also be in focus after it announced a deal to buy digital technology and service provider VUDU, Inc. The company expects the deal to close within the next few weeks.
Honeywell (HON) is expected to see some activity after it announced that it expects 6%-8% compounded annual sales growth over the next few years. The company also said it expects operating margins in the 8%-16% range.
Oceaneering International (OII) could move to the upside after it said its board has approved the repurchase of up to 6 million of its shares on a discretionary basis in privately negotiated transactions.
Cooper Companies (COO) is likely to move in reaction to its announcement that its women's healthcare unit has acquired the Her Option Global Endometrial Ablation product line from American Medical Systems Holdings (AMMD).
Health Management Associates (HMA) traded higher in Monday's after hours session after it reported fourth quarter net revenues of $1.20 billion, up from $1.09 billion. Excluding gains and losses, the company reported earnings from continuing operations of 12 cents per share compared to 7 cents per share last year. Analysts estimated earnings of 12 cents per share on revenues of $1.17 billion.
Nordson (NDSN) found notable buying interest in the after hours session after it reported first quarter sales of $221 million, up 18% year-over-year. The company reported earnings of 79 cents per share, including a one-time tax benefit of 9 cents per share and a charge of 1 cent per share. Analysts estimated earnings of 58 cents per share on revenues of $212.19 million. For the second quarter, the company expects 26%-30% sales growth and earnings of 81-89 cents per share, including a 1 cent per share charge. The consensus estimates call for earnings of 65 cents per share on 13.5% revenue growth.
Wilmington Trust (WL) came under selling pressure after it said it has started an underwritten public offering of $250 million of its common stock. The company noted that net proceeds from the offering would qualify both as tangible common equity and regulatory Tier I capital. Another stock that could be in focus because of a common share offering is TCF Financial (TCF), which commenced an underwritten registered public offering of $150 of its common stock.
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May 01, 2026 15:54 ET Central banks dominated the economics news flow this week with almost all major ones announcing their latest policy decisions and many boosted expectations for a rate hike in June. In other news, several countries released the preliminary data for first quarter economic growth. In the U.S., comments by Fed Chair Jerome Powell were also in focus as his term ends this month.