Pre-Market Primer: Herbalife Ltd. Exceeds Expectations; Stocks Rise Ahead of Consumer Confidence, Home Prices
Stocks are set to erase some of yesterday's losses as investors await consumer confidence and housing figures.
After declining yesterday, Dow (INDEXDJX:.DJI) futures were up 0.13% at 15,503 before the opening bell. Futures contracts on the S&P 500 (INDEXSP:.INX) rose 0.20% to 1,685.80 and Nasdaq (INDEXNASDAQ:.IXIC) futures climbed 0.30% to 3,074.75.
Later this morning, the May Case-Shiller Home Price Index is expected to print a 1.3% monthly rise in the 20 cities that it tracks. Home prices were up 12.3% from the year earlier. Consumer confidence, a major leading indicator of retail sales, is expected to decline 0.4 points to 81 in July.
On the corporate front, Sprint ( S ) reported that losses increased in the second quarter. The telco's net loss widened to $1.6 billion from $1.4 billion a year ago, including charges related to shuttering Nextel. Excluding one-time items, Sprint shares rose 2.3% in the pre-market.
Pfizer ( PFE ) shares are up just slightly this morning as its adjusted earnings per share rose 10% to $4 billion, or $0.56 per share. This exceeded expectations, but revenue missed, declining 7% to $13 billion. The drug maker said yesterday that it will reorganize into two branded drug businesses and a generic drugs unit as well. It also expects to buy back "in the mid-teens of billions of dollars" in stock this year.
Herbalife ( HLF ), the multi-level marketer that hedge fund investor Bill Ackman targets in a short, rallied 6.5% in pre-market trading after reporting a record second quarter. Earnings per share were $1.41 and management raised its EPS outlook for fiscal 2013 to $4.83-$4.95.
Stocks in Europe and Asia also rose on Tuesday. Japan released a bevy of economic reports overnight. Industrial output unexpectedly fell 3.3% between May and June, or 3.6% from June 2012. A 1.7% fall was anticipated. Household expenditures fell 0.4% from a year before and the unemployment rate ticked down 0.2 percentage points to 3.9%. Japanese shares rose, however. The Nikkei (INDEXNIKKEI:NI225) gained 1.53%.
Eurozone economic sentiment rose to a 15-month high of 92.5 in July. Construction was the only sector to see confidence fall across the region. While the survey showed that consumers and businesses are less pessimistic, consumers are still too nervous to increase spending.
Spain reported its eighth-straight quarter of negative GDP growth. In the past quarter, GDP in the country fell 0.1%.
Sweden unexpectedly reported that its economy fell into a contraction in the second quarter. After expanding 0.6% in the first three months of the year, Sweden shrank 0.1% in the June quarter.
Italy is currently awaiting the verdict in the tax fraud trial against Silvio Berlusconi. If Berlusconi is convicted, he will be prevented from holding office, and the ruling coalition could possibly crumble.
The Federal Reserve begins its two-day policy meeting today. Experts expect no change in either interest rates or tapering of its $85 billion monthly diet of asset purchases. The big focus tomorrow will be on the US economy, as we get a newly-recalculated GDP report and ADP's private sector payrolls report, a good preview for Friday's BLS report.
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