May 8th, 2013
Dow Jones Futures - U.S. stock futures fell, after the Dow Jones Industrial Average climbed above 15,000 for the first time yesterday, as investors awaited earnings from News Corp. and Monster Beverage Corp.
Symantec Corp. lost 6.4 percent after it said quarterly sales and revenue will miss analyst estimates. Whole Foods Market Inc. (WFM) gained 8.2 percent after the biggest U.S. natural- goods grocer posted better-than-estimated earnings and raised its full-year profit forecast. Electronic Arts Inc. rallied 6.5 percent as the video-game maker predicted annual profit that exceeded analyst projections.
S&P 500 (SPX) futures expiring in June declined 0.1 percent to 1,618.30 at 9:15 a.m. in New York. Contracts on the Dow Jones Industrial Average (INDU) fell 11 points, or 0.1 percent, to 14,972 today.
“We’ve recovered from the nervousness that we saw in the market in April and we’ve built a nice base here,” Peter Jankovskis, who helps oversee $3.5 billion as co-chief investment officer of Lisle, Illinois-based Oakbrook Investments LLC, said by phone. “We’ve gotten through the earnings season and we’re turning to the phase in the quarter where economic reports will determine if the market can hold up.”
The S&P 500 rose to its fourth straight record yesterday and the Dow closed above 15,000 for the first time on optimism over global central bank stimulus and better-than-estimated corporate earnings. U.S. stocks are in the fifth year of a bull market amid three rounds of bond purchases by the Federal Reserve.
Dow Jones Futures: Earnings Scorecard
About 72 percent of the S&P 500 companies that have released results since the start of the earnings season have exceeded profit projections, while 52 percent have missed sales estimates, data compiled’ by Bloomberg show. News Corp. and Monster Beverage are among five S&P 500 companies reporting earnings today.
“The earnings season has confirmed that we are in a low growth environment, with companies missing sales estimates and reporting sluggish top-line growth, but beating earnings-per- share estimates,” said Ivo Weinoehrl, who helps oversee about $657 billion at Deutsche Asset & Wealth Management in Frankfurt. “Companies are managing to squeeze out profits while margins are already at record highs. Share buybacks are also driving EPS through reduced share count.”
Economic data from China and Germany today came in better than estimated. Chinese export growth unexpectedly accelerated in April even as shipments to the U.S. and Europe fell. German industrial production also rose more than forecast, increasing for a second month in March in a further sign that Europe’s largest economy is returning to growth.
Dow Jones Futures: Symantec Slumps
Symantec declined 6.4 percent to $23.50. Revenue in the current period, which ends in June, will be $1.61 billion to $1.65 billion, the biggest maker of security software said yesterday. Profit excluding some costs will be 35 cents to 36 cents a share. Analysts on average had projected sales of $1.7 billion and profit of 44 cents.
Williams Cos. (WMB) lost 4 percent to $35.50. The third-largest U.S. pipeline company posted its full-year earnings forecasts through to 2015, trailing current analyst estimates for all three years.
Whole Foods gained 8.2 percent to $100.40. Net income rose to about $142 million, or 76 cents a share, from $118 million, or 64 cents, a year earlier, the Austin, Texas-based company said yesterday. Analysts had projected profit of 73 cents a share, the average of 24 estimates compiled by Bloomberg.
Whole Foods also said that profit excluding certain items will be as much as $2.89 a share in fiscal 2013, up from a previous estimate of as much as $2.87. Analysts estimate $2.87 a share, on average.
Dow Jones Futures: EA Forecast
Electronic Arts increased 6.5 percent to $19.60. The company, which makes the “FIFA” and “SimCity” video games, forecast adjusted earnings of $1.20 a share in the year ending in March, exceeding the $1.10 average estimate compiled by Bloomberg.
Sotheby’s surged 8.2 percent to $37.80. The auction house sold a Paul Cezanne painting for $41.6 million in its Impressionist and modern art sale yesterday.
The S&P 500 will continue its advance and may trigger a longer-term buy signal for global equity markets, even as the benchmark gauge for U.S stocks nears a resistance level, according to Roelof-Jan van den Akker, a technical analyst at ING Groep NV.
Dow Jones Futures: Buy Signal
The measure is nearing its short-term resistance of 1,635, signaling a possible 1.6 percent decline from yesterday’s finish to 1,600 within the next two weeks. Still, a monthly close above the longer-term resistance level of 1,600 would send a buy signal for the next year, triggering a greater increase in the S&P 500 that will lead global stock markets higher, van den Akker said.
“Prices are slowly breaking the upward rising resistance line around 1,600,” he said via phone from Amsterdam. “Even though we may see a short-term pullback that we will consider normal, the S&P 500’s uptrend is intact and likely to continue. Prices are still in a steep upward move in the next few weeks.”
In technical analysis, investors and analysts study charts of trading patterns and prices to predict changes in a security, commodity, currency or index.
- Sofia Horta e Costa in London and Nikolaj Gammeltoft in New York at Bloomberg.