Futures Slightly Lower After Wall Street Sell-Off, Surge in
U.S. equity futures traded slightly lower in early pre-market
trade after another sell-off Wednesday despite an upswing in
M&A activity. Several deals have been announced this week and
the M&A market has remained strong in 2013, a key sign of
corporate confidence in the economic recovery.
In other news around the markets:
Japanese flow of funds data showed net selling by domestics for the
second consecutive week as the Nikkei Index dropped over 5 percent
and the yen strengthened against the dollar. For the government's
stimulus policies to truly take hold, investors would want to see
Japanese domestics purchasing foreign assets, which would further
aid in the decline in the yen. Italy sold 5.75 billion euros in 5-
and 10-year bonds with yields rising in each maturity despite
strong demand. The yield on the 5-year BTP rose to 3.01 percent
from 2.84 percent at the previous auction and the yield on the
10-year BTP rose to 4.14 percent from 3.94 percent. Two large
M&A deals were announced Wednesday. The first deal involved
Smithfield Foods (NYSE:
) being bought for $4.72 billion by a Chinese company. Also,
Berkshire Hathaway's (NYSE: BRK-A) (NYSE: BRK-B) Mid-American
Energy purchased NV Energy (NYSE:
) for $5.6 billion. S&P 500 futures fell 3.00 points to
1,644.00. The EUR/USD was higher at 1.2997. Spanish 10-year
government bond yields rose 2 basis points to 4.44 percent. Italian
10-year government bond yields rose 4 basis points to 4.22 percent.
Gold rose 1.09 percent to $1,407.00 per ounce.
Asian shares were in flux overnight as Japanese stocks closed
sharply lower as the Nikkei Index officially entered correction
territory after making a 5-year high last week. The Japanese Nikkei
Index closed 5.15 percent lower as the Shanghai Composite Index
rose 0.13 percent and the Hang Seng Index declined 0.31 percent.
Also, the Korean Kospi fell 0.05 percent and Australian shares lost
European shares traded mostly higher overnight save for shares
in Spain as the government announced that GDP fell 0.5 percent last
month, in line with expectations, but the previous month's figure
was reduced to -0.8 percent growth from the initial estimate of
-0.5 percent. The Spanish Ibex Index declined 0.07 percent as the
Italian FTSE MIB Index rose 2.1 percent. Meanwhile, the German DAX
rose 1.16 percent and the French CAC 40 gained 0.12 percent while
U.K. shares added 0.08 percent.
Commodities were mixed overnight as energy futures lagged and
metals gained. WTI Crude futures fell 0.77 percent to $92.41 per
barrel and Brent Crude futures declined 0.73 percent to $101.68 per
barrel. Copper futures rose 0.29 percent to $330.65 after
Wednesday's drop. Gold was higher and silver futures rose 1.03
percent to $22.69 per ounce.
Currency markets continued Wednesday's moves as the dollar
retreated from recent highs against most other currencies. The
EUR/USD was higher at 1.2997 and the dollar fell against the yen to
100.82. Overall, the Dollar Index fell 0.35 percent on weakness
against the Swiss franc, the euro, the pound, and the yen.
Earnings Reported Yesterday
Key companies that reported earnings Wednesday include:
Bank of Montreal (NYSE:
) reported second quarter EPS of $1.46 vs. $1.50 expected on
revenue of $588.7 million vs. $609.73 million expected. DSW Inc.
) reported first quarter EPS of $1.00 vs. $0.90 a year ago on
revenue of $601.4 million vs. $588.83 million expected. Michael
Kors Holdings (NYSE:
) reported fourth quarter EPS of $0.50 vs. $0.39 expected on
revenue of $597.2 million vs. $544.71 million expected. The Fresh
) reported first quarter EPS of $0.46 vs. $0.44 expected on revenue
of $366.6 million vs. $369.83 million expected.
Stocks moving in the pre-market included:
NV Energy (NYSE:
) shares rose 24.43 percent pre-market after the acquisition
announcement yesterday. Alcoa (NYSE:
) shares declined 1.63 percent pre-market after Moody's cut its
credit rating to Ba1 from Baa3 which now places the company in junk
bond territory. Newmont Mining (NYSE:
) shares rose 0.88 percent as gold futures rose back above
$1,400.00 per ounce. Royal Caribbean (NYSE:
) shares declined 1.00 percent pre-market after the ship fire
earlier this week.
Notable companies expected to report earnings Thursday
) is expected to report third quarter EPS of $1.03 vs. $0.88 a year
ago. Joy Global (NYSE:
) is expected to report second quarter EPS of $1.58 vs. $2.04 a
year ago. Krispy Kreme Doughnuts (NYSE:
) is expected to report first quarter EPS of $0.17 vs. $0.14 a year
ago. Palo Alto Networks (NYSE:
) is expected to report third quarter EPS of $0.05 vs. $0.07 a year
ago. Splunk (NASDAQ:
) is expected to report a first quarter loss of $0.06 per share vs.
a loss of $0.04 per share a year ago.
On the economics calendar Thursday, the latest revision to first
quarter GDP is due out as well as initial jobless claims, corporate
profits, and the Pending Home Sales Index. Also, the Treasury is
set to auction 7-year notes. Overnight, Japanese Industrial
Production and the Eurozone Unemployment Rate are expected to be
Good luck and good trading.
to view Benzinga's Market Wrap for Wednesday, May 29.
(c) 2013 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.
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