U.S. Stock Futures Mixed; Apple Tanks Nasdaq 100
First Published Thursday, 24th January 2013 11:53 am - © 2013 Dow Jones
U.S. stock index futures posted a mixed performance Thursday, with heavy losses for the Nasdaq 100 contract as Apple Inc. shares tanked in premarket trading a day after disappointing investors who had already braced for a drop in the company's fiscal first-quarter earnings.
Weekly jobless claims and leading indicators were among data on offer later.
Nasdaq 100 futures dropped 34.50 points, or 1.3%, to 2724.50.
Futures on the Dow Jones Industrial Average rose 7 points to 13726, while S&P 500 futures lost 2.7 points to 1487.60.
"Disappointing results from Apple as North Korea threatens to play with nuclear weapons again has given investors some cause for concern despite some more encouraging economic data from China," said Mike McCudden, head of derivatives at stockbroker Interactive Investor in London.
"A nuclear test of a higher level will be carried out," the North Korea's National Defense Commission said in a 1,000-word statement released Thursday, The Wall Street Journal reported.
Apple (AAPL) shares remained down around 8% in Frankfurt trading and had dropped as much as 10% in after-hours action Wednesday after the technology behemoth reported first-quarter sales that fell slightly short of Wall Street targets, while iPhone sales were on the low side of expectations.
The company's forecast for current quarter revenues and gross margin also disappointed.
Thanks to its huge market capitalization and wide ownership, Apple can have a big influence on the movement of the broader market. It makes up 10% of the Nasdaq Composite Index and 3.6% of the S&P 500. The stock is held by nearly a fifth of U.S. mutual funds, according to Morningstar.
But Apple wasn't the only factor in play for Wall Street on Thursday.
Shares of Netflix Inc. (NFLX) will also be in focus after soaring as much as 35% in aftermarket action Wednesday after the company reported strong fourth-quarter results that included strong growth in U.S. video-streaming subscribers.
U.S. economic data on tap for Thursday includes weekly jobless claims.
First-time claims for benefits are expected to jump back up in the week ended Jan 19 after falling sharply to 335,000 in the prior week, according to economists surveyed by MarketWatch. They forecast claims to rise to 360,000 when the Labor Department issues the report on Thursday at 8:30 a.m. EST.
The decline two weeks ago put claims at the lowest level in four years, but economists believe it stemmed from a seasonal quirk that often occurs after the holidays and is probably an aberration.
But if claims stick close to the 335,000 mark, it would mean a big improvement for the labor market. That could boost stocks and hurt bond prices.
Economists forecast a preliminary flash manufacturing index for the U.S. released by Markit to dip to 53.0 in January after hitting a seven-month high of 54.0 in December. The index will be released at 9 a.m. EST. The Markit index is similar to the ISM manufacturing index and tries to gauge the health of the factory sector. It has been signaling stronger conditions than the ISM factory index for a few months.
An index of leading economic indicators is expected to rise 0.4% in December, signaling a modestly improving economy after the index declined 0.2% in November, according to economists surveyed by MarketWatch. The Conference Board will release its leading economic index at 10 a.m. EST.
Outside of the U.S., the initial reading of HSBC's monthly purchasing-managers' index for China's manufacturing sector rose to a 24-month high of 51.9 versus 51.5 in December. A reading of more than 50 signals expansion in activity.
The preliminary Markit euro-zone composite purchasing-managers' index, meanwhile, showed activity continued to contract across the region, but at the slowest pace in 10 months--reinforcing indications the downturn bottomed in the fourth quarter.
In overseas markets, most Asian stocks fell, while European markets traded lower in the wake of Apple's results.
Write to William L. Watts at BWatts@marketwatch.com
HOT STOCKS TO WATCH
Among the companies with shares expected to actively trade in Thursday's session are Netflix Inc. (NFLX), Apple Inc. (AAPL) and Mellanox Technologies Ltd. (MLNX, MLNX.TV).
Netflix capped a turbulent year by posting a surprise fourth-quarter profit and adding more Internet subscribers than expected, news that sent its stock rocketing about 35% to $139.80 in after-hours trading.
Apple reported mostly flat year-over-year earnings for the December quarter, the first of its fiscal year, despite record iPhone and iPad sales. Shares of the Cupertino, Calif., company fell 9.8% in after-hours trading to $463.49 as the increased product sales failed to satisfy Wall Street's expectations. The results built on growing concerns that Apple may be losing its edge with consumers and have a tough time topping its past success.
Mellanox's fourth-quarter earnings surged as the data-storage company recorded a double-digit increase in revenue, though it offered revenue guidance sharply below analyst expectations for the current quarter. Shares tumbled 20% to $41.16 after hours.
Buckeye Partners L.P. (BPL) has launched an offering of six million units representing limited partner interests. The pipeline-owning company expects to use the proceeds to pay down its debt, and said it will have around 96.4 million units outstanding after the offering. Shares were off 4.2% in after-hours trading at $52.20.
SanDisk Corp.'s (SNDK) fourth-quarter profit fell 24% as the flash memory maker's profit margin and revenue continued to erode amid a shift in the company's focus. The company's shares fell 3.7% after hours to $45.88 after the company gave investors a downbeat first-quarter and full-year revenue outlook in a conference call.
Swift Transportation Co.'s (SWFT) fourth-quarter profit rose 27% as the trucking company reported revenue gains across its segments. Shares climbed 10% to $11.30 after hours as adjusted earnings topped analyst expectations.
Teradyne Inc. (TER) swung to a fourth-quarter loss as the company reported lower sales of its chip-testing equipment. Shares fell 4.9% to $16.20 as the company also gave a downbeat view of the first quarter.
AFC Enterprises Inc. (AFCE) raised its 2012 earnings projection, as the restaurant operator continues to see strong same-store sales.
Altera Corp.'s (ALTR) fourth-quarter earnings fell 17% as the chip manufacturer said sales of its older products were soft.
Amgen Inc. (AMGN) reported an 11% increase in fourth-quarter revenue as stronger sales of its best-selling arthritis drug offset declining sales of its antianemia drugs.
Ariad Pharmaceuticals Inc. (ARIA) is offering an undisclosed number of shares. The company intends to use the proceeds for making and marketing its leukemia treatment Iclusig, and for developing its other drug candidates.
Crown Castle International Corp. (CCI) swung to a fourth-quarter loss as the cell-tower company recorded heavy debt-retirement charges, masking an increase in revenue.
Cubist Pharmaceuticals Inc.'s (CBST) fourth-quarter earnings more than quintupled as the biopharmaceutical company posted much stronger sales, while the year-earlier results were weighed down by income tax provisions.
Energen Corp.'s (EGN) fourth-quarter earnings surged as the energy company saw a double-digit revenue increase from its oil and gas operations and as mark-to-market gains on certain financial commodity contracts boosted bottom-line results.
F5 Networks Inc. (FFIV) reported a 4.5% jump in fiscal first-quarter profit and issued an encouraging earnings outlook for the current quarter as stronger services revenue helped to offset slowing growth from new product sales.
Managed-care provider Health Net Inc. (HNT) said it has reached a new agreement with Tenet Healthcare Corp. (THC), reinstating a relationship with the Tenet's network of hospitals in California that expired in December.
Hill-Rom Holdings Inc.'s (HRC) fiscal first-quarter earnings fell 27% as the hospital-bed supplier recorded significantly higher costs, partially offsetting stronger capital sales.
Lam Research Corp.'s (LRCX) fiscal second-quarter profit slumped 81% on acquisition costs as the semiconductor-equipment company said Chief Financial Officer Ernie Maddock will be leaving the company in mid-April.
LSI Corp. (LSI) swung to a fourth-quarter profit as the storage-chip manufacturer recorded strong revenue growth and wider margins.
Natural Resource Partners LP (NRP) has paid $292.5 million for an interest in OCI Wyoming LP, as well as some shares of the soda-ash producer from units of Anadarko Petroleum Corp. (APC).
Noble Corp.'s (NE) fourth-quarter earnings were roughly flat from a year earlier as the offshore-oil driller's higher revenue from contract drilling services was offset by repair costs and other operating expenses.
Polycom Inc.'s (PLCM) fourth-quarter earnings fell 96% as the video-conferencing company's revenue declined across its geographic regions from a year earlier.
Raymond James Financial Inc.'s (RJF) fiscal first-quarter earnings jumped 28% as the regional broker reported stronger results for its private client group and capital markets business.
RLI Corp.'s (RLI) fourth-quarter earnings fell 16% as the specialty property and casualty insurer was hurt by impacts from superstorm Sandy.
Sealy Corp.'s (ZZ) fourth-quarter loss narrowed as the mattress maker's sales in both the U.S. and abroad strengthened and margins improved.
Stryker Corp.'s (SYK) fourth-quarter earnings fell 33% as the medical-device maker recorded hefty charges related to a product recall, while sales continued to strengthen.
United Rentals Inc.'s (URI) fourth-quarter earnings rose 41% as the equipment-rental company benefited from a continuing recovery in demand, higher rental rates and a boost from its RSC Holdings Inc. acquisition in April. Revenue missed expectations and the company gave a cautious revenue outlook for 2013.
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