Monday, July 13, 2009

U.S. Stocks Are Set For Lower Opening

. Monday, July 13, 2009

By stockOzone team

U.S. stocks are set for yet another lower opening Monday morning as traders turn jittery ahead of the reporting season amid conflicting views on the time frame for the end of the slowdown or the beginning of a recovery in the world's largest economy.

As of 6.30 am ET, the Dow Futures were down 29 points, the S&P Futures were down 3.70 points, and the Nasdaq 100 futures were down 6.25 points.

Friday, stocks ended mixed in a choppy session in yet another day of low volumes amid weak economic data that further dented the already weak outlook. A report released by Reuters and the University of Michigan showed that consumer sentiment index for July came in at 64.6 compared with the final reading of 70.8 for June. Economists had been expecting a more modest decrease to a reading of about 70.0. A report released by the Commerce Department showing a narrower than expected trade deficit for May and a separate report from the Labor Department that revealed a jump in import prices in June had little or no impact on the market.

Disappointing preliminary numbers from Chevron and a decline in oil prices below the $60 a barrel mark amid the strengthening of the dollar against the Euro and the Pound also impacted market sentiment. Housing and healthcare stocks showed weakness, while moderate gains were seen among airline, rail-road transportation and few technology stocks.

The tech-heavy Nasdaq managed to finish higher by 3.48 points or 0.2% at 1,756, while the Dow fell by 36.65 points or 0.5% to 8,147 and the S&P 500 dipped by 3.55 points or 0.4% to 879.

The Treasury Department's Treasury Budget for June is the lone economic report that is scheduled to be released today, with economists expecting a deficit of $77.5 million.

The financial space may see some activity after analysts expressed optimism over earnings of securities firms.

Aluminum die-cast auto parts maker J L French Automotive Castings, whose major customers include General Motors and Ford Motor, announced that it is filing for bankruptcy protection under Chapter 11 with the District Court of Delaware.

Commerical lender, CIT Group revealed that it is in discussions with the regulators seeking assistance to improve its liquidity measures in the near term.

Rail-based transportation provider C S X Corp. (CSX) is scheduled to report second quarter results before the market opens for trading. Analysts expect the company to report earnings of $0.69 per share for the quarter.

Wholesaler of industrial and construction supplies, Fastenal Co (FAST) will be reporting results for the second quarter before the market opens for trading. Analysts expect the company to report earnings of $0.33 per share for the quarter. Ahead of the earnings result, the company, announced Friday that the board of directors authorized repurchase of 2 million shares in the market.

Advanced process equipment provider Novellus Systems (NVLS) will be reporting results for the second quarter after the market closes for trading. Analysts expect the company to slip to a loss of $0.38 per share compared to profit in the same period last year.

Light sweet crude oil for August delivery recovered most of the early losses in Asian trading and is presently trading at $59.83 a barrel, down $0.06 from its previous close on Friday at $59.89 a barrel. The dollar is presently gaining against the pound, while continuing to weaken against the Japanese Yen.

The European markets are trading flat after declining in early trading, led by miners and oil stocks amid concerns about global recovery. The CAC-40 Index in France is down 0.02%, the DAX index in Germany is up 0.08% and the FTSE in the U.K is edging up 0.01%.

The Asian markets ended in negative territory on concerns about a recovery in the global economy, awaiting corporate earnings and slew of economic data later in the week to provide direction.

Disclosure: Author does not own any of the stocks discussed here.

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