Futures higher on earnings

US markets are set for a higher open on China's possible stimulus moves as more corporate results are on tap.

By Benzinga Jul 23, 2013 8:16AM

zurbar age fotostockBy Matthew Kanterman


U.S. equity futures rose on the back of some strong earnings from notable U.S. companies, including Halliburton (HAL) and Texas Instruments (TXN). As earnings season kicks into high gear this week, expect results to continue to drive markets.


In other news, the Bank of Spain updated its economic forecasts overnight and now says that Spain's recession eased to a 0.1% contraction in the second quarter from 0.5% contraction in the first. They noted a rise in exports and a gain in tourism as growth drivers in the second quarter.


After weeks of speculation, KPN (KKPNY) announced that it would sell its German business to Telefonica (TEF).


Economists estimate the fever surrounding the Royal Baby, born Monday could have boosted the U.K. economy by more than $300 million.

  • S&P 500 futures rose 2.6 points to 1,692.90.

  • The EUR/USD was lower at 1.3176.

  • Spanish 10-year government bond yields fell 3 basis points to 4.58%.

  • Italian 10-year government bond yields were flat at 4.31%.

  • Gold fell 0.39% to $1,332.10.

Asian markets

Asian shares were higher overnight following some rumors that another fiscal stimulus may be in the pipeline in Japan. The Japanese Nikkei 225 Index rose 0.82% and the Topix Index gained 0.51%. In Hong Kong, the Hang Seng Index rose 2.33% while the Shanghai Composite Index rose 1.95% in China. Also, the Korean Kospi gained 1.27% and Australian shares rose 0.3%.


European markets

European shares were higher overnight following some positive earnings, some strong merger and acquisition activity, and the positive Bank of Spain guidance. The Spanish Ibex Index rose 1.56% while the Italian FTSE MIB Index gained 0.95%. Meanwhile, the German DAX rose 0.27% and the French CAC 40 Index gained 0.18% while U.K. shares rose 0.21%.


Commodities

Commodities were lower overnight as WTI returned to trade at a discount to Brent. WTI crude futures fell 0.7% to $106.19 per barrel and Brent crude futures declined 0.35% to $107.77 per barrel. Copper futures fell 0.49% to $316.95 per pound. Gold was lower and silver futures declined 1.09% to $20.22 per ounce.


Currencies

Currency markets were rather quiet overnight as moves were tepid. The EUR/USD was lower at 1.3176 and the dollar gained against the yen to 99.83. Overall, the Dollar Index rose 0.1% on strength against the Swiss franc, the yen, the euro, and the pound.


Earnings reported Monday

Key companies that reported earnings Monday include:

  • Halliburton (HAL) reported second quarter earnings per share of $0.73 vs. $0.72 expected on revenue of $7.3 billion vs. $7.25 billion.

  • McDonald's (MCD) reported second quarter earnings per share of $1.38 vs. $1.40 expected on revenue of $7.08 billion vs. $7.1 billion expected.

  • Kimberly-Clark (KMB) reported second quarter earnings per share of $1.41 vs. $1.39 a year ago on revenue of $5.27 billion vs. $5.34 billion a year ago.

  • Gannett (GCI) reported second quarter earnings per share of $0.58, in line, on revenue of $1.3 billion vs. $1.33 billion a year ago.

  • Texas Instruments (TXN) reported second quarter earnings per share of $0.42 vs. $0.41 expected on revenue of $3.05 billion vs. $3.06 billion expected. The company also sees third quarter earnings per share of $0.49-0.57 vs. the $0.51 estimate on revenue of $3.09-3.35 billion vs. the $3.2 billion estimate.

  • Canadian National Railway (CNI) reported second quarter earnings per share of $1.66 vs. $1.62 on revenue of $2.67 billion vs. $2.69 billion expected.

  • Netflix (NFLX) reported second quarter earnings per share of $0.49 vs. $0.40 on revenue of $1.07 billion, in line. Netflix sees Q3 earnings per share $0.30-0.56 but revenue guidance was short of expectations.

Premarket movers

Stocks moving in the premarket included:

  • Texas Instruments (TXN) shares gained 1.95% after reporting strong guidance.

  • Netflix (NFLX) shares fell 5.33% after the company reported a better than expected quarter but guidance was light.

  • Southwest Airlines (LUV) shares declined 1.15% after a plane's nose gear collapsed on landing. No injuries were reported.

Earnings

Notable companies expected to report earnings Tuesday include:

  • Apple (AAPL) is expected to report third quarter earnings per share of $7.31 vs. $9.32 a year ago on revenue of $35.09 billion vs. $35.00 billion a year ago.

  • AT&T (T) is expected to report second quarter earnings per share of $0.68 vs. $0.66 a year ago on revenue of $31.82 billion vs. $31.6 billion a year ago.

  • Valero (VLO) is expected to report second quarter earnings per share of $0.92 vs. $1.50 a year ago on revenue of $30.18 billion vs. $34.66 billion a year ago.

  • United Technologies (UTX) is expected to report second quarter earnings per share of $1.58 vs. $1.62 a year ago on revenue of $16.37 billion vs. $13.81 billion a year ago.

Economics

On the economics calendar Tuesday, the weekly Redbook is due out followed by the FHFA house price index and the Richmond Fed manufacturing index, while Canada is expected to release its retail sales report. Also, the Treasury is set to auction 4-week, 52-week, and 2-year notes. Overnight, the Chinese flash manufacturing PMI is due out. The eurozone, French and German manufacturing and services PMIs are also due out.


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