US equities look to open sharply lower as investors flee to safe-haven assets as concerns rise about potential aid requirements for Spanish municipal regions. Short-selling bans in Italian and Spain have weighed on financial stocks in core EU states, which has seen particular weakness in the Dax.
US Chicago Fed Nat Activity Index (Jun) M/M -0.15 vs. (Prev. -0.45, Rev. -0.48)
FTSE (-2.37%), CAC (-2.70%), DAX (-3.08%), SMI (-1.45%), IBEX (-3.13%), EURO STOXX (-2.89%) prices taken at 1343BST
Pre-market activity in US stocks following corporate earnings:
Hasbro +0.9%
Halliburton - flat
Coca-Cola Enterprises - flat
Eaton -1.0%
McDonalds -2.2%
DJI
Corporate Earnings
McDonald's - Q2 EPS USD 1.32 vs. Exp. USD 1.38, Q2 revenue USD 6.92bln vs. Exp. USD 6.96bln. (Newswires)
- Co. says FX cut EPS USD 0.07
- Q2 global same-store sales up 3.7%
- Q2 Europe comp sales up 3.8% vs. Exp. up 2.4%
Other News
Boeing - Rolls Royce announced they are replacing a component in a number of engines in Boeing 787 Dreamliners, as a result the ANA have grounded 3 Dreamliners. (Newswires)
United Technologies - GenCorp announced that it has signed a definitive agreement to acquire Pratt & Whitney Rocketdyne from United Technologies for USD 550mln. (Newswires)
Pfizer – Co. has reported top-line results of study from Lyrica's effects on male reproduction. (Newswires)
S&P 500
Corporate Earnings
Halliburton - Q2 adjusted EPS USD 0.82 vs. Exp. USD 0.75, Q2 total revenue USD 7.23bln vs. Exp. USD 6.92bln (vs. 2011 Q2 USD 6.87bln). (Newswires)
- Q2 includes USD 0.02 share costs
Coca-Cola Enterprises - Q2 adjusted EPS USD 0.73 vs. Exp. USD 0.73, Q2 revenue USD 2.2bln vs. Exp. USD 2.27bln. (Newswires)
- Co. now sees buyback at least USD 600mln by the year end
- Co. sees year comp EPS USD 2.18-2.24
Eaton - Q2 EPS USD 1.12 (operating EPS USD 1.15) vs. Exp. USD 1.08, Q2 revenue USD 4.07bln vs. Exp. USD 4.254bln. (Newswires)
- Co. sees year operating EPS USD 4.20-4.50, saw USD 4.30-4.70 vs. Exp. USD 4.33
Hasbro - Q2 EPS USD 0.33 vs. Exp. USD 0.24, Q2 revenue USD 811.47mln vs. Exp. USD 835.25mln. (Newswires)
Other News
KKR - The sale of thetrainline.com has been cancelled after bids failed to reach the owner's GBP 400mln target, KKR had been rumoured as a potential acquirer. (Telegraph)
Talbots – Co. and Sycamore Partners announced the execution of an amendment to the agreement and plan of Merger which deletes the financing proceeds condition to the purchaser's tender offer to acquire all of the outstanding shares of the company's common stock. (Newswires)
Williams – Co. announced their intent to pursue an agreement for Williams Partners to acquire Williams’ 83.3% interest and operatorship of the olefins-production facility in Geismar, La. (Newswires) In related news the co. updated their guidance, they see Q2 adjusted EPS approximately USD 0.21 vs. Exp. USD 0.33 and see FY 2012 EPS at 1.15 vs. Exp. USD 1.39. (Newswires)
NRG Energy/GenOn Energy – Co. announced they have signed a definitive agreement to combine the two companies in a stock-for-stock tax-free transaction, the new co. will have a combined enterprise value of USD 18bln. (theflyonthewall.com)
Companies paying dividend: McCormick (USD 0.3100)
Companies going ex-dividend: Clorox (USD 0.6400), Lowe's (USD 0.1600)
Nasdaq 100
Corporate Earnings
N/A
Other News
Apple – Industry sources report Pegatron has begun production of a new version of Apple's iPhone in its Shanghai factory. (DigiTimes) In other news Sanford Bernstein analyst Toni Sacconaghi said that Apple's results may disappoint due to lower iPhone sales. (CNBC) Finally the co.’s new iPhone will end use of the wide dock connector used in the company's gadgets for the nearly a decade in favour of a smaller one, a change likely to upset the Apple faithful. (Newswires)
Google – Co. is reported to have underestimated the demand for the 16GB version of its Nexus 7 tablet while overestimating the demand for the smaller 8GB version, prompting the company to halt further orders of the 16GB tablet though the cheaper one remains available. (Guardian)
Apple/Google – Co.’s have appealed a federal judge's decision to reject their requests to temporarily ban sales of each others' cell phones for patent violation. (Newswires)
News Corp - Companies House filings show that Mr Murdoch stepped down from the boards of the NI Group, Times Newspaper Holdings and News Corp Investments in the UK last week. He also quit a number of News Corp’s US boards, the details of which have yet to be disclosed by the US SEC. This has lead to fresh speculation that he may be planning for an eventual sale of the newspapers. (Telegraph/NY Times)
Broker Moves
Upgrades
Mosaic – Co. upgraded to Buy from Neutral at Citigroup, firm raised its price target for shares to USD 66 from USD 62
KB Home - Co. upgraded to Buy from Neutral at Goldman, Price target raised to USD 15 from USD 10
Onyx Pharmaceuticals – Co. upgraded to Buy from Hold at Jefferies, firm raised its price target for shares to USD 101 from USD 55
Valero Energy – Co. upgraded to Buy from Neutral at UBS, Price target is USD 26
Illumina – Co. upgraded to Outperform from Market Perform at Leerink, firm raised its price target range for shares to USD 54-56 from USD 46-50
Schlumberger – Co. upgraded to Buy from Hold at Argus, Price target is USD 85
Downgrades
Walgreen – Co. downgraded to Neutral from Buy at UBS, Price target lowered to USD 37 from USD 38
AK Steel – Co. downgraded to Neutral from Buy at UBS, Price target lowered to USD 5 from USD 10
LaSalle Hotel – Co. downgraded to Neutral from Buy at Goldman, Price target lowered to USD 29.50 from USD 32.50
Marriott – Co. downgraded to Buy from Conviction Buy at Goldman, Price target remains USD 43
DTE Energy – Co. downgraded to Hold from Buy at Argus
Textron – Co. downgraded to Sector Perform from Outperform at RBC Capital, Price target lowered to USD 28 from USD 32
Deckers Outdoor – Co. downgraded to Underperform from Neutral at Sterne Agee
Other News
Onyx Pharmaceuticals - Co. has received accelerated approval from the U.S. FDA for Kyprolis for Injection, a proteasome inhibitor indicated for the treatment of patients with multiple myeloma. (Newswires)
Digital General – According to analysts the co.’s shares could double if the co splits its television and internet advertising units. (Newswires)
Talisman Energy – Co. announced that it has reached an agreement in the North Sea with Sinopec, whereby Sinopec will acquire a 49% equity interest in Talisman's UK North Sea business for USD 1.5bln. (Newswires)
DigitalGlobe/GeoEye – Co.’s have agreed to combine in transaction valued at about USD 900mln. (theflyonthewall.com)
CNOOC – Co. has announced the acquisition of Nexen for USD 15.1bln or USD 27.50 a share, a 60% premium to the closing price from July 20. (Newswires)
Genesee & Wyoming – Co. announced that they have entered into an agreement under which Genesee & Wyoming will acquire RailAmerica for an all cash purchase price of USD 27.50 per share or USD 1.4bln. (Newswires)
Baltic Dry Index falls 1.4% to 1,022 points
USD Index up 0.35% at 1345BST (0745CDT)