By RTT News,
January 21, 2014, 05:33:00 AM EDT
(RTTNews.com) - Early indications suggest that Wall Street stocks may get off to a positive start on Tuesday, thanks to efforts by China to cool its money market rates. The move has spread cheer in Asia, while also ameliorating the negative sentiment generated by insipid earnings in Europe. With little domestic catalysts to drive trading, as the markets open for the week after Monday's public holiday in observance of Martin Luther King's Day, it remains to be seen if the China cheer can sustain the mood throughout the session. Earnings from some blue chips, including Johnson & Johnson, Verizon and Travelers Companies also drive performance in the markets.
At 6:15 am ET, the Dow futures are rising 45 points, the S&P 500 futures are adding 3.75 points and the Nasdaq 100 futures are advancing 13.25 points.
U.S. stocks closed mixed in the week ended January 17th, as mixed economic data and earnings led to indecision among traders, causing some volatility.
On the economic front, the unfolding holiday shortened week's economic calendar is very light, with only a very few market moving economic reports due for the week. Traders are likely to closely track the jobless claims report and the National Association of Realtors' existing home sales report for December to get some clarity on the economic outlook.
Preliminary results of Market's U.S. manufacturing survey for January, the Federal House Finance Agency's house price index for November, the Conference Board's leading economic indicators index for December, announcements concerning the Treasury auctions of 2-year, 5-year and 7-year notes round up the economic events of the week.
In corporate news, reports suggest that Renovo is in preliminary discussion to buy IBM's ( IBM ) low-end server business. Lenovo has reportedly completed due diligence.
General Electric ( GE ) and Cameron (CAM) announced that GE has agreed to acquire Cameron's reciprocating compression division for $550 million. The division generated sales of about $355 million in 2012. The companies expect the deal to be completed later this year.
Jos. A. Bank Clothiers (JOSB) announced that its board has determined that the unsolicited tender offer from Men's Warehouse (MW) to acquire all of the outstanding shares of Jos. A. Bank Clothiers at $57.50 per share is inadequate. Accordingly, the company has recommended that its shareholders reject the offer.
Eaton (ETN) announced an agreement to sell its Aerospace Power Distribution Management Solutions and Integrated Cockpit Solutions business to Saran for $270 million. The deal is expected to close in the first half of 2014. The business generated sales of about $102 million in 2013.
Kroger (KR) and Harris Teeter Supermarket (HTSI) announced that the Federal Trade Commission has granted early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 with respect of the pending merger between the two companies. Brocade (BRCD) announced the sale of its network adapter business to Qlogic (QLGC) in a bid to focus on its data center networking business. CenterPoint Energy ( CNP ) said its board approved a 14.5 percent increase in its quarterly dividend to 23.75 cents per share.
ADTRAN ( ADTN ), AMD (AMD), CA Technologies (CA), Cree (CREE), Fulton Financial ( FULT ), IBM ( IBM ), Interactive Brokers (IBKR), Texas Instruments (TXN) and Xilinx (XLNX) are among the companies due to release their quarterly results after the close of trading.
Asian stocks ended higher, helped by the China boost, although the Taiwanese market retreated modestly. The Chinese and the Japanese markets were the best performers of the region.
The People Bank's of China added funds into the markets twice this week ahead of the Lunar New Year holiday, easing short-term rates. On Tuesday, the bank pumped 225 billion yuan through reverse repurchase agreements. The action is seen as an effort to ensure adequate liquidity, ensuring stability in the financial markets.
The Japanese market was the beneficiary of a weaker yen, which fell on an increase in risk appetite. The Nikkei 225 average ended up 154.28 points or 0.99 percent at 15,796. Australia's All Ordinaries closed 34.40 points or 0.65 percent higher at 5,342. Most sector stocks advanced, led by financial stocks, although energy and material stocks came under selling pressure. Hong Kong's Hang Seng Index closed at 23,033, up 104.17 points or 0.45 percent, and China's Shanghai Composite ended 17.06 points or 0.86 percent higher at 2,008.
European stocks opened higher and have been experiencing volatility in early trading, as traders digest domestic earnings and the cues from Asia. The major averages in the region are currently higher.
In corporate news, SAP (SAP) reported higher profit and revenues for the fourth quarter, but the company pushed back its time schedule for achieving 35 percent in adjusted operating profit margin to 2017 from the 2015, as it invests heavily in cloud. French power equipment maker Alstom also cut its operating margin forecast for fiscal year ending March 2014, citing weaker sales.
Meanwhile, Unilever reported underlying sales growth of 4.1 percent for the fourth quarter. The company's full year earnings and revenues were ahead of expectations. Brewer SABMiller reported third quarter sales volumes that were below expectations. Remy Cointreau's third quarter sales also missed estimates on weakness in China.
On the economic front, survey data from the Centre for European Economic Research/ZEW showed that German economic confidence weakened unexpectedly in January, with the indicator of economic sentiment falling 0.3 points to 61.7 versus 64.0 expected.
Separately, the value of mortgages disbursed by U.K. banks remained broadly stable in December from the previous month, figures released by the Council for Mortgage Lenders revealed.
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