Stock futures pointed to a slightly higher open as strong quarterly report
s from Ford 3M (MMM) and other companies offset concerns about the budget standoff in Washington, D.C.
Futures for the Dow Jones Industrial Average ($INDU) were up by 3 points at 12,553. Futures for the S&P 500 ($INX) were up by 3.3 points, or 3.3 p
oints above fair value, at 1,337. Nasdaq ($COMPX) futures were up 4 points, or 7 points above fair value, at 2,4228.
While both Democrats and Republicans would accept a deal that would rai
se the debt limit, cut spending and include no new taxes, Republicans are backing a proposal that would raise the debt ceiling just enough to avoid a Treasury default. That means the issue would likely resurface next year, in time for the 2012 presidential elections, which some observers believe wo
uld threaten President Barack Obama’s re-election. Monday, stocks finished firmly in the red.
Obama assailed what he called the Republicans’ “cuts only” approach to d
eficit reduction in a televised speech Monday night, urging Americans who agree with him to contact their congressmen to show their support. House Speaker John Boehner offered up the Republican response, noting his background as a small-business man and saying Obama “wants a blank check.”
In earnings news, Ford (F) reported second-quarter earnings of $2.4 bi
llion, or 65 cents a share excluding items, down from $2.6 billion, or 68 cents a share, a year ago. Revenue jumped to $35.5 billion. Analysts were looking for 60 cents a share on revenue of $31.6 billion. Shares were rising 4% to $13.70 in premarket trading Tuesday.
Dow component 3M (MMM) said it earned $1.60 a share during the second quarter, meeting analysts’ estimates. The company said profit was clipped by disruptions from the March earthquake and tsunami in Japan. 3M said it expects to earn $6.10 to $6.25 a share this year, up from a previous forecast of $6.05 to $6.25.
China’s largest Internet company Baidu (BIDU) was also giving a boost to the overall market with shares gaining 6% to $9.19. A surge in ad sales helped the company bring in $252.6 million in quarterly income.
Late Monday, Netflix (NFLX) missed revenue estimates when it reporte
d quarterly earnings of $1.26 a share on sales of $788.6 million. Its shares were plunging 8% to $257.40.
Broadcom (BRCM) shares were rising 8.3% to $37.80 after the mobile chipmaker gave a better-than-expectedsales forecast for the third-
quarter Monday. The company said it expected to generate revenue of $1.9 billion to $2 billion. Analysts had forecast $1.93 billion, according to Thomson Reuters.
Texas Instruments (TXN) reported quarterly earnings of 56 cents per
share, beating forecasts for 52 cents. Its $3.46 billion in revenue was slightly ahead of expectations for $3.44 billion. Disruptions from the Japanese earthquake delivered a blow to supply orders, but the chip-maker expects to rebound during the second half of the year. Shares were gaining 0.4% to $31.60.
Gold (-GC) prices were little changed after hitting a record high of $1,624
during intraday trading on Monday. Gold for August delivery was last slipping 90 cents to $1,611.30 an ounce.
European markets hover close to the flat line after oil company BP (BP) and Swiss bank UBS (UBS) delivered disappointing earnings reports. The FTSE
in London was ticking up 0.1%, and the DAX in Frankfurt was little changed.
BP’s profits came short of expectations because of higher oil price costs. The company reported $5.6 billion in profits while analysts were expecting around $5.9 billion. Its shares were losing 2.2% to $464.75 per share. UBS was dropping 2.5% to $17.43 per share after reporting new jobs cuts and a
drop in second quarter profits.
Hong Kong’s Hang Seng was gaining 1.3%, and Japan’s Nikkei ticked up 0.5%.
The benchmark 10-year Treasury was losing 5/32, pushing the yield abov
e 3%. The dollar was weakening against a basket of currencies, with the dollar index down 0.6%.
Concerns over whether a $157 billion bailout for Greece will contain Europe’s debt crisis remained in investors’ minds. The country is expected to slip into a temporary default. The euro was gaining against the dollar by 1.4%.
At 10 a.m. ET, to see the Consumer Confidence Index slide to 56 for July from 58.5 in June.
The latest update on the housing market is also expected to show little improvement in the economic recovery. The S&P/Case-Shiller 20-city home price index for May is expected to drop 4.4%, worse than April’s 4% decline. New-home sales for June are expected to be little changed from May at 320,000.
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Category: Business/ Economy
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