Pre-Market Primer: Dell Inc. Offer Gets ISS Blessing; Futures Higher Before Start of Earnings Season
Stock futures pushed higher today as investors prepare for the second quarter earnings season.
Wall Street rallied after better-than-expected jobs data on Friday. The US economy added 195,000 jobs, but the unemployment rate stayed stuck at 7.6%.
No major economic releases are due today. Dow (INDEXDJX:.DJI) futures gained 0.44% to 14,142 this morning. Futures contracts on the S&P 500 (INDEXSP:.INX) rose 0.55% to 1,636.20 and Nasdaq (INDEXNASDAQ:.IXIC) futures climbed 0.59% to 2,974.00.
Europe today was preoccupied with the situation in Greece as the Troika and Greek ministers agreed to new cuts to the public sector in exchange for the next 8.1 billion euros of aid to the Mediterranean country. However, the international inspectors said that "policy implementation is behind in some areas," and their economic outlook for Greece is still "uncertain."
Europe's industrial heartland is also becoming troubling. Today, Germany released worse-than-expected industrial production and trade data. Industrial production fell 1% while its trade surplus shrank 3.4 billion euros to 14.1 billion euros in May. Economists expected production to fall by half as much and the trade surplus to fall to 17 billion euros. Imports fell 2.6% and exports are down 4.8% from May 2012.
The ISS, an institutional shareholder advocacy group, gave its blessing to Michael Dell's 24.4 billion bid to take Dell Inc. ( DELL ), the company he founded, private. The group said that the cash offer was 25% over the unaffected share price. ISS' approval could tip the scales in Dell's and Silver Lake Management's favor over rival offers since institutional investors, who own 76% of the company, usually vote according to ISS recommendations.
Priceline.com Inc ( PCLN ) shares rose 1.63% in the pre-market after Morgan Stanley analysts upgraded the shares of the travel company to overweight.
Alcoa Inc ( AA ) will be the first Dow-component company to post earnings for the second quarter after the bell this afternoon. The aluminum company is expected to earn $0.08 per share on $5.96 billion in revenue. Its shares are up 0.6% in early trading today before the bell.
Alcoa traditionally sets the tone for earnings season, which could be an ugly one. Despite the steadily improving economy, 97 S&P 500 companies have issued negative guidance, though this pessimism could already be baked into the share prices.
The US and Europe are set to begin talks about a free-trade cooperation deal, which would be the world's largest when completed. Proponents say that the agreement could unlock over $100 billion per year.