Futures Lower On Portugal Fears, Bank Earnings In Focus
U.S. equity futures traded lower on renewed fears that Portugal
could be the first nation to leave the eurozone after the recent
political crisis has put in doubt the nation's attempts to meet its
bailout goals. Meanwhile, key bank earnings before the bell should
set the tone for U.S. trading.
In other news around the markets:
Portugal's government requested to delay its latest bailout review
in a sign that it has not made the required reforms to receive the
next payment. Should the nation fail to do so, it could go bankrupt
and leave the eurozone. European Central Bank Chief Economist Peter
Praet, formerly of the Bank of Belgium, was quoted overnight in
German paper Handlesblatt as saying that interest rates in the
eurozone will remain at current levels or lower as long as
inflation remains moderate. This subtle hint is further clarity to
the guidance President Mario Draghi gave last week in the that the
market can now expect rate movements to be tied to medium-term
inflation expectations. S&P raised its outlook on Ireland
overnight to positive from stable in a sign that the ratings agency
could upgrade the rating of the bailed out nation from its current
BBB+ to an A rating. S&P 500 futures fell 1.1 points to
1,669.00. The EUR/USD was lower at 1.3045. Spanish 10-year
government bond yields fell 2 basis points to 4.8 percent. Italian
10-year government bond yields fell 2 basis points to 4.44 percent.
Gold fell 0.39 percent to $1,276.25 per ounce.
Asian shares were mixed overnight as Chinese and Hong Kong
shares lagged as Chinese Finance Minister Lou said that growth
would come in closer to 7 percent this year but would avoid a hard
landing. The Japanese Nikkei 225 Index rose 0.23 percent and the
Topix Index gained 0.6 percent. In Hong Kong, the Hang Seng Index
dropped 0.75 percent while the Shanghai Composite Index slipped
1.62 percent. Also, the Korean Kospi fell 0.41 percent and
Australian shares rose 0.16 percent.
European shares were mixed as peripheral indexes fell on
Portuguese fears. The Spanish Ibex Index declined 0.93 percent and
the Italian FTSE MIB Index fell 0.06 percent. Meanwhile, the German
DAX rose 0.81 percent and the French CAC 40 Index rose 0.35 percent
while U.K. shares gained 0.43 percent.
Commodities were lower overnight as the dollar retraced some
losses. WTI Crude futures fell 0.13 percent to $104.77 and Brent
Crude futures declined 0.09 percent to $107.63 per barrel. Copper
futures rose 1.89 percent to $314.95 per pound. Gold was lower and
silver futures declined 0.93 percent to $19.77 per ounce.
Currency markets were on the move as the dollar strengthened
while the euro weakened on Portugal fears. The EUR/USD was lower at
1.3045 and the dollar rose against the yen to 99.02. Overall, the
Dollar Index rose 0.26 percent on strength against the euro, the
pound, the yen, and the Swiss franc.
Earnings Reported Yesterday
Key companies that reported earnings Thursday include:
Commerce Bancshares (NASDAQ:
) reported second quarter EPS of $0.72 vs. $0.71 on revenue of
$262.13 million vs. $262.43 million expected.
Stocks moving in the pre-market included:
Fly Leasing (NYSE:
) shares fell 1.36 percent pre-market after the company priced a
follow-on offering of 11.428 million shares at $14 from the close
of $14.75. RadioShack (NYSE:
) shares gained 1.52 percent pre-market as the company did not deny
allegations after the close that it has hired advisors to prepare
for bankruptcy. Dell(NASDAQ:
) shares whip-sawed following a
Bloomberg TV interview with Carl Icahn
in which he said he will make a higher offer for the company by
this morning. Valero (NYSE:
) shares fell 4.26 percent as the company gave a profit warnings
and sees Q2 EPS of $0.85-0.95 vs. $1.27 estimate.
Notable companies expected to report earnings Friday
J.P. Morgan Chase and Co. (NYSE:
) is expected to report Q2 EPS of $1.44 vs. $1.21 a year ago on
revenue of $24.84 billion vs. $22.89 billion a year ago. Wells
) is expected to report second quarter EPS of $0.93 vs. $0.82 a
year on revenue of $21.21 billion vs. $21.29 billion a year ago.
Webster Financial Corp. (NYSE:
) is expected to report second quarter EPS of $0.48 vs. $0.44 a
year ago on revenue of $147.63 million vs. $144.38 million a year
ago. Infosys (NYSE:
) is expected to report first quarter EPS of $0.70 vs. $0.73 on
revenue of $1.93 billion vs. $1.75 billion a year ago.
On the economics calendar Friday, the Reuters/University of
Michigan Consumer Sentiment Index is expected to be released and
Fed members Bullard, Plosser, and Williams are set to speak.
Good luck and good trading.
Tune into Benzinga's PreMarket Info show with Dennis Dick and
For a recap of Thursday's market action, read Benzinga's daily
market wrap .
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