U.S. Stock Futures Edge Lower Before Data, Alcoa
Published Tuesday, 8th January 2013 07:03 pm - © 2013 Dow Jones
U.S. stock-market futures fell on Tuesday as investors geared up for earnings from Alcoa Inc. later in the day, which will kick off the start of the fourth-quarter reporting season, while a gauge of small-business optimism and consumer credit make up data on offer.
Futures for the Dow Jones Industrial Average fell 17 points to 13,290, while those for the Standard & Poor's 500 index fell 3 points to 1,452.80.
Futures for the Nasdaq 100 index fell 7 points to 2,710.75.
The data calendar is fairly thin for Tuesday. At 7:30 a.m. U.S. EST, the National Federation of Independent Business will release its small-business-optimism index for December. The November reading was the worst since March 2010.
The Federal Reserve, meanwhile, will release consumer-credit data for November at 3 p.m. EST. Led by student and car loans, credit grew 6.2%, or by $14.2 billion, in October.
Richmond Federal Reserve President Jeffrey Lacker will present his economic outlook to the South Carolina Business and Industry Political Education Committee on Tuesday. Lacker, who this year isn't a voting member on the Federal Open Market Committee, said last week that he expects growth of around 2% for 2013.
Providing some distraction to lingering fiscal-cliff issues, investors will turn attention to the start of earnings season, which kicks off with aluminum producer Alcoa Inc. (AA) after the close of markets Tuesday.
Analysts surveyed by FactSet Research were forecasting the company earned 6 cents a share in the fourth quarter, versus 7 cents they forecast at the end of September.
"With a global footprint and being the first cyclical name to report, investors will be keenly watching management's guidance for forward aluminum demand as a gauge of global economic conditions," said Jim Reid, strategist at Deutsche Bank, in a note to investors.
The outlook for fourth-quarter earnings is looking somewhat flat, given sharply scaled-back forecasts for companies in the technology and financial sectors.
Some jitters ahead of earnings season poked through on Monday as the Standard & Poor's 500 index backed off a five-year high, falling 4.58 points, or 0.3%, to finish at 1,461.89.
Technology stocks will be in sharp focus on Tuesday as the Consumer Electronics Show in Las Vegas got underway on Monday night.
Chip makers like Nvidia Corp. (NVDA), Intel Corp. (INTC), Qualcomm Inc. (QCOM) and Advanced Micro Devices (AMD) Inc. and electronics manufacturers like Sony (SNE), Samsung Electronics Co. , LG Electronics Inc. and Panasonic Corp. (PC) along with dozens more companies in many sectors will be spotlighted.
Samsung shares fell 1.1% in South Korean trading after the company announced fourth-quarter operating-profit and sales guidance that largely met forecasts.
Among other companies in the spotlight, shares of Sears Holding Corp. (SHLD) could be active after the company said late Monday that Chief Executive Officer Louis D'Ambrosio will step down at the end of the current fiscal year on Feb. 2 due to family health reasons.
Sears also forecast a net loss attributable to shareholders of $280 million to $360 million, or $2.64 to $3.40 a diluted share, for the quarter ending Feb. 2.
Shares of Celgene Corp. (CELG) could also be active after the biopharma group was upgraded to outperform from sector perform at RBC Capital Markets.
Within other markets, European stocks were trading mostly flat as investors took to the sidelines ahead of Alcoa's results.
Asia stocks were also on guard ahead of U.S. earnings season, with most indexes dropping and Japanese shares especially weak as the yen rose.
Crude-oil prices rebounded from earlier losses, last trading up 21 cents to $93.40 a barrel, while gold rose $7.30 to $1,653.60 an ounce.
The dollar fell against the euro after Japan's finance minister said Tokyo will use part of its foreign exchange reserves to buy bonds issued by the European Stability Mechanism bailout fund.
Write to Barbara Kollmeyer at BKollmeyer@marketwatch.com
HOT STOCKS TO WATCH
Among the companies expected to trade actively in Tuesday's session are Yum Brands Inc. (YUM), Wet Seal Inc. (WTSLA) and Team Inc. (TISI).
Yum said it expects its China division's fourth-quarter same-store sales to fall more than previously expected, as it said poor publicity from a government review of China poultry supplies badly impacted its KFC operations there during the last two weeks of December. Shares sank 5.4% after hours to $64.26.
Wet Seal named John D. Goodman as its new chief executive, effective Monday, filling a post that had been empty for several months with someone who has led and sold another teen retailer. Class A shares rose 3.7% after hours to $2.80, as the appointment was seen ending a period of tumult for the company.
Team's fiscal second-quarter profit rose 35% as the industrial-services company saw continued revenue growth, particularly in its inspection and assessment business. Shares were up 4.9% after hours to $38.91.
Calumet Specialty Products Partners LP (CLMT) is offering 5 million shares, as it seeks to raise funds to repay debt and for general purposes. The maker of oil and fuel products recently had 57.6 million shares outstanding. Shares fell 4.4% after hours to $31.80.
Manufacturing services company Plexus Corp. (PLXS) said it expects fiscal first-quarter earnings and revenue to fall short of its previous guidance, due to weak demand in its networking and communications business. Shares fell 4.3% in after-hours trading to $24.70.
Solar Capital Ltd. (SLRC) has initiated an offering of 6 million shares. The investment firm plans to use the proceeds to pay down borrowings and to acquire debt or equity securities. Solar Capital recently had around 38.7 million shares outstanding. Shares fell 2.4% after hours to $24.31.
ConAgra Foods Inc. (CAG) is offering to sell around $240 million of its shares, in order to help fund its proposed $6.8 billion acquisition of Ralcorp Holdings Inc. (RAH). The food company recently had a market capitalization of roughly $12.2 billion.
Dynegy Inc.'s (DYN) chief operating officer Kevin Howell has stepped down, and the power company said it expects to name his successor in the first quarter. Mr. Howell will remain at the company in an advisory role and to support the transition, and will continue reporting to Chief Executive Robert Flexon.
Lockheed Martin Corp. (LMT) has agreed to acquire certain assets of the engine-maintenance, repair and overhaul business of insolvent Canadian aircraft maintenance company Aveos Fleet Performance Inc. as the U.S. defense contractor seeks to expand in Canada. Terms of the deal weren't disclosed.
Newcastle Investment Corp.'s (NCT) larger-than-expected offering of 50 million shares priced at a 2.6% discount to its Monday close. The company intends to use the proceeds for general corporate needs and to make several investments.
Weight-loss program provider Medifast Inc. (MED) has named Timothy G. Robinson as its new chief financial officer, filling a role that has been in flux in recent months.
Summit Hotel Properties Inc. (INN) has launched an offering of 13 million shares, intending to put the proceeds in part toward planned acquisitions of Hyatt Hotels Corp. (H) properties, and to pay down debt. The real-estate investment trust recently had 11.9 million shares outstanding.
Tesoro Logistics LP (TLLP) is offering 8.5 million units representing limited partner interests. The company plans to use the proceeds to help fund its proposed acquisition of Chevron Corp.'s (CVX) northwest products system, including a 760-mile pipeline. Tesoro recently had 35.5 million units outstanding.
Williams Partners L.P. (WPZ) is seeking regulatory approval to build an additional natural gas delivery point from its Transco pipeline to Brooklyn and Queens, New York.
Yingli Green Energy Holding Co. (YGE) said it expects photovoltaic module shipments for 2012 to be slightly ahead of its latest guidance, as the Chinese solar-products maker saw strong results in its fourth quarter.
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