PRE-MARKET UPDATE
Stocks are looking higher on the heels of Alcoa earnings and after yesterday's late-day rally. DJIA futures are up 0.8% and S&P futures are up 0.9%. Europe is also trading higher as the UK's FTSE is up 0.8%, Germany's DAX is up 0.9%, and France's CAC is up 0.9%. Asian stocks were mixed and uncorrelated to US markets as Japan's NIKKEI 225 was down by -0.5% and Hong Kong's Hang Seng was up by +0.4%.
Bonds prices are marginally lower after yesterday's bond rally after the 10-Year Treasury auction went so well in demand. Yields are still much lower than yesterday morning with the 10-Year Treasury yield at 3.35% and the 30-Year yield is 4.22% in early indications.
Commodities are firm but prices are still feeling soft in the trend. NYMEX WTI Crude is up above $61.00/barrel. Gold is up 0.7% around $914.75/oz in early trading indications.
ECONOMIC & MACRO EVENTS
These are today’s top economic data:
8:30 AM ESY Weekly Jobless Claims
10:00 AM EST Wholesale Inventories (MAY)
10:30 AM EST Weekly EIA Natural Gas Inventories
Today's Earnings: 3Com (COMS), Chattem (CHTT), FC Stone (FCSX), Lawson Software (LWSN), Shaw Group (SGR), Value Line (VALU). Chevron (CVX) has its preliminary earnings update.
ANALYST UPGRADES & DOWNGRADES
Upgrades
Amdocs (DOX) Raised to Outperform at Oppenheimer.
Chevron (CVX) Started as Buy at Societe Generale.
Goldman Sachs Group (GS) Raised to Buy at BofA/Merrill.
Illumina (ILMN) Raised to Buy at Auriga.
Intuit (INTU) Started as Buy at Deutsche Bank.
KB Home (KBH) Raised to Outperform at Credit Suisse.
Starwood Hotels (HOT) Raised to Market Perform at FBR.
Western Union (WU) Raised to Outperform at Credit Suisse.
Downgrades
Conoco Philips (COP) Started as Sell at Societe Generale.
Corporate Executive Board (EXBD) Cut to Underperform at Baird.
Gaylord Entertainment Co. (GET) Cut to Underperform at FBR.
Neustar (NSR) Cut to Hold at Deutsche Bank.
Public Storage (PSA) Started as Underperform at KBW.
Rangold Resources (GOLD) Cut to Hold at Citigroup.
BULLISH EVENTS
Alcoa Inc. (NYSE: AA) was a fairly solid report if you compare it to estimates and do not look at peak earnings. The company posted -$0.26 EPS vs -$0.38 estimates, it beat revenues, and grew cash flow. Shares are indicated up 5% this morning but were up almost 10% at one point last night after the trading halt was lifted.
NetApp, Inc. (NASDAQ: NTAP) is backing down. It is terminating its bid to acquire Data Domain (DDUP) in the bidding war with EMC. This has shares up almost 5% now that it won't be diluting earnings so much on the buyout.
Walgreen (WAG) is doing what it can to show that the drugstore chain and pharmacy benefit manager is doing well during hard times. The company jacked up its quarterly dividend by some 22% to $0.1375 per quarter.
Rigel Pharmaceuticals (RIGL) announced that its R788 candidate reached significant clinical improvement in rheumatoid arthritis patients in its completed TASKi2 Phase IIb clinical trial of 457 patients treated for up to 6 months.
Deluxe (DLX) raised guidance. It now sees adjusted EPS estimates to $0.54 to $0.56 from a prior range of $0.43 to $0.51 EPS. This is also above First Call consensus of $0.45. Revenues were put at $332M vs. consensus of $334.18M.
BEARISH EVENTS
Hot Topic, Inc. (NASDAQ: HOTT) was a dud on the same store sales front. The teen apparel retailer isn't getting any boost from the Twilight teen vampire movie apparel now and the company expects to lose more than what analyst were looking for.
Zumiez Inc. (NASDAQ: ZUMZ) is going to have a hard time attracting much positive momentum compared to its past. The apparel and equipment seller for skating, skiiing, and more saw its June same store sales fall by 19.3% for the month.
Exactech, Inc. (Nasdaq:EXAC) isn't doing as well in bone and joint restoration products. It forecast that sales for Q2 will be lower than originally expected at close to $43 million and full year sales are now expected to be $167 to $173 million. Estimates are $44.76 million and $177.26 million, respectively.
Costco (COST) said that its June same store sales were down 6%. That is in-line with estimates but may not give hope that a recovery is imminent at the upscale big box retailer.
Silicon Motion (SIMO) is not feeling any love in flash memory. It lowered Q2 revenue guidance below consensus from +5% to +15% down to -5% to -10%. This looks close to 15% below analyst expectations anc could be under $20 million for the quarter. It did manage to raise its gross margin guidance to 47% to 48% from a prior range of 44% to 46%.
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