After the S&P 500 lost 2.7 percent last week in a sharp
sell-off, investors are likely to be cautious this week as they
worry about the possibility of a correction.
Investors haven't seen a decline of more than ten percent in
about three years, so most believe that a correction is long
However, analysts are maintaining their optimism and expecting
stocks to rebound as the U.S. economic environment remains
conductive to a bullish market.
In other news around the markets:
On Sunday, Lisbon announced that it was planning to spend almost
five billion euros in order to rescue its largest bank, Banco
Espirito Santo. The news created a wave of relief across the
eurozone as the collapse of Banco Espirito Santo could have sparked
a fresh wave of banking troubles for the region's already fragile
financial markets. Rebel groups continued to jockey for position in
Tripoli over the weekend, leaving more than 20 people dead in
battles for control of the nation's airport. As the Libyan conflict
worsened, most Western nations evacuated their embassies and
advised citizens to leave the country. On Sunday Britain sent a
Navy ship to evacuate more than 100 British nationals as the
fighting looked to be sliding out of control. On Monday, Russia
made plans to begin new military exercises at the Ukrainian border
that will include the use of bombers and fighter jets as
accusations that Moscow is supplying rebel groups with arms and
training continued to circulate. The demonstration is likely a show
of strength to Western nations after Western officials condemned
Russia back in March for performing military drills at the border.
After a 6.1 magnitude earthquake struck China on Sunday, rescue
officials are working to rescue survivors and get medical attention
and supplies to those in need. However, the already difficult task
of getting through heavy rubble was made more difficult by bad
weather conditions, making the rescue effort a slow process.
Reports of nearly 400 people dead and 1,800 more injured are likely
to increase as rescuers continue their efforts.
Asian markets were higher except the NIKKEI, which lost 0.31
percent. The Shanghai composite was up 1.74 percent, the Shenzhen
composite gained 1.59 percent, the KOSPI rose 0.35 percent and the
Hang Seng index was up 0.28 percent.
European markets were mostly higher with the exception of the
DAX, which lost 0.21 percent. The FTSE rose 0.30 percent, the STOXX
600 was up 0.06 percent, the CAC 40 gained 0.51 percent and the MIB
was up 0.46 percent.
Energy futures rose after having a tough week last week; Brent
futures were up 0.19 percent and WTI futures gained 0.25
percent. Gold gained 0.01 percent and silver was up 0.31
percent, but industrial metals were down across the board. Copper
lost 0.06 percent, aluminum fell 0.65 percent and tin was down 1.75
Currency markets were quiet on Monday; the euro was down 0.06
percent against the dollar and 0.04 percent against the pound, but
gained 0.02 percent against the franc and was flat against the yen.
The dollar was also flat against the yen but gained 0.16 percent
against the Canadian dollar and 0.06 percent against the Australian
Notable earnings released on Friday included:
) reported second quarter EPS of $2.98 on revenue of $55.60
billion, compared to last year's EPS of $2.77 on revenue of $57.37
billion. Procter & Gamble (NYSE:
) reported second quarter EPS of $0.95 on revenue of $20.16
billion, compared to last year's EPS of $0.79 on revenue of $20.66
billion. PBF Energy (NYSE:
) reported second quarter EPS of $0.29 on revenue of $5.30 billion,
compared to last year's EPS of $0.68 on revenue of $4.68 billion.
) reported second quarter EPS of $0.40 on revenue of $2.00 billion,
compared to last year's EPS of $0.35 on revenue of $2.14 billion.
Stocks moving in the Premarket included:
) was up 0.93 percent in premarket trade after choppy trading took
the stock down 0.96 percent last week. Apple (NASDAQ:
) rose 0.38 percent in premarket trade after losing 1.58 percent
last week. Carnival Corp (NYSE:
) was down 1.02 percent in premarket trade after rising 0.61
percent on Friday. Transocean (NYSE:
) was down 0.52 percent in premarket trade after falling 3.87
percent last week.
Notable earnings releases expected on Monday include:
Cardinal Health (NYSE:
) is expected to report fourth quarter EPS of $0.81 on revenue of
$21.90 billion, compared to last year's EPS of $0.79 on revenue of
$25.42 billion. American International Group (NYSE:
) is expected to report second quarter EPS of $1.06 on revenue of
$8.13 billion, compared to last year's EPS of $1.12 on revenue of
$8.35 billion. Marathon Oil (NYSE:
) is expected to report second quarter EPS of $0.75 on revenue of
$3.40 billion, compared to last year's EPS of $0.67 on revenue of
$3.90 billion. Tenet Healthcare (NYSE:
) is expected to report second quarter EPS of $0.01 on revenue of
$3.94 billion, compared to last year's EPS of $0.66 on revenue of
Notable economic releases expected on Monday include the U.S.
trade balance, British manufacturing PMI and U.S. ISM manufacturing
and non-manufacturing PMI.
For a recap of Friday's market action, click .
Tune into Benzinga's #PreMarket Prep today to hear Larry
McDonald, Phil Davis & Jeffrey Barron by clicking
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