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Wall Street Skeptical Amid Monetary Policy Uncertainty


The trading in U.S. index futures suggests that stocks may open slightly lower on Wednesday. The light corporate and economic news flow has increased the nervousness of traders. With the FOMC meeting scheduled for next week, traders are anxious on whether the central bank will start trimming its stimulus as early as next week in the wake of recent strong data. Meanwhile, the striking of an accord among lawmakers to end the fiscal impasse could offer some consolation to traders.

At 6:15 am ET, the Dow futures are receding 7 points, the S&P 500 futures are receding 0.50 points and the Nasdaq 100 futures are down 1.75 points.

U.S. stocks retreated on Tuesday on profit taking amid a lack of any major trading catalysts to keep the momentum going.

On the economic front, the Energy Information Administration is scheduled to release its weekly petroleum status report at 10:30 am ET.

The Treasury is due to announce the results of its auction of 10-year notes at 1 pm ET. At 2 pm ET, the Treasury will release its monthly budgetary report for November. Economists expect a budgetary deficit of $155 billion compared to a deficit of $91.6 billion in October.

In corporate news, H&R Block (HRB) reported a second quarter non-GAAP net loss from continuing operations of 42 cents per share on revenues of $134 million, down 2 percent year-over-year. The results trailed expectations.

Photronics (PLAB) reported fourth quarter non-GAAP earnings of 9 cents per share on sales of $106 million. The earnings were ahead of estimates, while the revenues were slightly below estimates. MasterCard (MA) announced a 10-for-1 stock split, an 83% hike to its quarterly dividend and a new $3.5 billion stock buyback program.

Smith & Wesson (SWHC) reported better than expected second quarter results and the company's full year guidance was in line. PDL BioPharma (PDLI) announced its fourth quarter revenue guidance of $109 million, up 27 percent year-over-year, with the revenue growth premised on higher royalty payments. Analysts estimate revenues of $107.67 million for the quarter.

LabCorp. (LH) reaffirmed its previous revenue growth guidance of 3 percent, while its updated its 2013 non-GAAP earnings guidance to $6.90-$7.05 per share. The company also issued 2014 preliminary revenue growth guidance of 2 percent and non-GAAP earnings guidance of $6.50 per share. Analysts estimate earnings close to the upper end of the 2013 guidance range and the revenue guidance was in line. However, the 2014 guidance was weak.

Franklin Resources (BEN) announced a 20 percent increase to its regular quarterly dividend. The company also said its board approved the repurchase of 30 million shares.

Coldwater Creek (CWTR), Men's Wearhouse (MW), Nordson (NDSN) and Oxford Industries (OXM) are among the companies due to release their quarterly results after the close of trading.

The major Asian markets retreated across the board, tracking the weakness on Wall Street overnight. The Chinese and the Hong Kong markets led the region's declines.

The Japanese markets fell, as the yen remained firm, weighing down on export stocks. The Nikkei 225 average ended down 96.25 points or 0.62 percent at 15,515. Australia's All Ordinaries languished below the unchanged line throughout the session, with the weakness intensifying in late trading. The index ended 36.70 points or 0.71 percent lower at 5,110. Healthcare, material, consumer staple, energy and financial stocks came under intense selling pressure.

Hong Kong's Hang Seng Index closed at 23,338, down 405.95 points or 1.71 percent, and China's Shanghai Composite Index lost 33.33 points or 1.49 percent before closing down at 2,204.

On the economic front, the results of a survey by Westpac and the Melbourne Institute showed that confidence among consumers in Australia receded in December. The consumer confidence index fell to 105 in December from 110.3 in November, slipping to the lowest level to a 4-month low.

Japan's Cabinet Office reported that core Japanese machinery orders rose 0.6 percent month-over-month in October. The increase was below the 0.7 percent growth expected by economists. A report released by the Bank of Japan showed that its index measuring domestic corporate goods prices in Japan edged up 0.1 percent month-over-month in November, in line with expectations. Annually, prices rose a steeper than expected 2.7 percent.

European stocks opened on a mixed note, with the French CAC 40 Index opening higher and rallying sharply in early trading, while the German DAX Index and the U.K. FTSE 100 Index opened lower but have since then recouped some of their losses.

In corporate news, Inditex reported a small increase in its net profit for the nine month period, while sales were up 5 percent. For the period from November 1st to December 8th, the company reported a 10 percent increase in store sales in local currencies.

In economic news, German inflation as per the harmonized index of consumer prices rose to 1.6 percent in November from 1.2 percent in October, final figures released by the Federal Statistical Office showed, matching the preliminary estimates.

France's current account deficit dropped to EUR2.1 billion in October from 3.6 billion in September, helped mainly by an improvement in foreign trade, data released by the Bank of France showed.

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