News Column

MARKET ANALYSIS: Wall Street Stays Defensive Ahead Of Consumer Confidence Data, Earnings

July 29, 2014

WASHINGTON (Alliance News) - Early indications suggest that Wall Street stocks may open lower on Tuesday ahead of the release of earnings by companies such as Pfizer (PFE), Merck (MRK) and UPS (UPS), and economic data on house prices and consumer confidence. A 2-day FOMC meeting gets underway, although a decision is not expected until tomorrow. Global cues are inconclusive, with Asian stocks closing mostly higher, while the European markets are trading on a weak note amid the release of mixed domestic earnings.

At 6:15 am ET, the Dow futures are slipping 11 points, the S&P 500 futures are receding 2.20 points and the Nasdaq 100 futures are moving down 2.50 points.

US stocks Monday's session on a narrowly mixed note amid the release of some mixed economic data and M&A news.

On the economic front, Standard & Poor's is due to release the results of its S&P/Case-Shiller house price survey at 9 am ET. Economists expect a 0.4% month-over-month increase in the house price index following the 0.2% increase in the previous month. Annually, prices are estimated to increase an unadjusted 9.9%.

The Conference Board is scheduled to release the results of its consumer confidence survey for July at 10 am ET. The consensus estimate calls for an increase in the consumer confidence index to 85.5 from 85.2 in June.

In corporate news, Jacob's Engineering (JEC) reported third quarter results that trailed estimates and the company said it now expects its adjusted earnings for 2014 to be below the midpoint of its previous guidance range.

Crane's (CR) second quarter adjusted earnings trailed estimates, while its revenues exceeded estimates. The company maintained its 2014 adjusted earnings per share guidance, which is in line with estimates. The company also announced a 10% increase to its quarterly divided to 30 cents per share.

Amkor's (AMKR) reported below consensus earnings for its second quarter, while its revenues beat estimates. The company's third quarter guidance was in line. XL Group (XL) reported better than expected second quarter operating income and net earned premiums. Meanwhile, Partner Re's (PRE) second quarter operating earnings trailed estimates but its revenues were ahead of expectations.

J&J Snack Foods (JJSF) reported third quarter earnings and sales that were ahead of estimates. Plum Creek's (PCL) third quarter results exceeded estimates, while it lowered its 2014 earnings outlook below the consensus estimate.

Amdocs (DOX), Ameriprise Financial (AMP), Amgen (AMGN), Anadarko Petroleum (APC), Arthur J. Gallagher (AJG), Big 5 Sports (BGFV), Boston Properties (BXP), C.H. Robinson (CHRW), CB Richard Ellis (CBG), Compuware (CPWR), Cray (CRAY), Edward Lifesciences (EW), Equity Residential (EQR), Express Scripts (ESRX), Genworth Financial (GNW), International Game Technology (IGT), Marriott (MAR), NCR Corp. (NCR), Newmont Mining (NEM), Panera Bread (PNRA), Renaissance Re (RNR), Ruby Tuesday (RT), Twitter (TWTR) and US Steel (X) are among the companies due to release their financial results after the close of trading.

Most Asian markets ended higher, with the exception of the New Zealand markets, amid the release of solid domestic economic data and earnings. The markets in the region also received encouragement from Wall Street's recovery in late trading yesterday. The Indian, Malaysian and Indonesian markets remained closed for public holidays.

The Japanese markets reacted to the weakness of the yen, which retreated in reaction to the rise in risk appetite. The Nikkei 225 average opened higher and advanced roughly steadily over the course of the session before closing up 88.67 points or 0.57% at a new 6-month high of 15,618. Australia's All Ordinaries, which nervously moved back and forth across the unchanged line till late trading, advanced thereafter, ending up 10.70 points or 0.19% at 5,581.

Hong Kong'sHang Seng Index ended up 211.90 points or 0.87% at 24,641 and China's Shanghai Composite closed 5.24 points or 0.24% higher at 2,183.

On the economic front, a slew of data released by Japan was mixed. The Ministry of Internal Affairs and Communication reported that the jobless rate in Japan came in at 3.7% in June compared to the consensus estimate of 3.5%. A separate report showed that household spending fell 3% year-over-year in June, a smaller drop than the 3.9% decline expected by economists and the 8% decline in May. Meanwhile, the Ministry of Economy, Trade and Industry showed that retail sales fell 0.6% year-over-year in June compared to the 0.5% drop expected by economists.

European stocks opened slightly highe4r and rallied strongly in early trading only to give back their gains. The major averages in the region are currently lower.

In corporate news, Swiss investment bank UBS (UBS) reported higher second quarter earnings. Meanwhile, Germany'sDeutsche Bank saw its second quarter profits and sales drop. French telecom company Orange said its second quarter earnings declined modestly, although it maintained its guidance. BP's (BP) second quarter replacement cost profit beat estimates. Notwithstanding a decline in sales, carmaker Renault reported higher profits for its first half. Linde's first half profits declined year-over-year.

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Source: Alliance News

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