Futures lower ahead of Bernanke's testimony
The Federal Reserve chairman is set to appear in front of the House Financial Services Committee.
By Matthew Kanterman
U.S. equity futures fell in early premarket trade after some mixed earnings Tuesday and ahead of Ben Bernanke's first of two days of testimony on Capitol Hill. On Wednesday, the Federal Reserve chief will speak to the House Financial Services Committee. For a preview of Bernanke's testimony, read more on Benzinga.
In other news, the number of people claiming unemployment in the U.K. in June fell much faster than expected, new data revealed. The British claimant count fell 21,200 vs. the expected drop of 8,000, while May's figure was revised lower to show a drop of 16,200 from the previous estimate of 8,200.
The minutes of the latest meeting of the Bank of England's Monetary Policy Committee were released and showed that the nine-member board voted 9-0 in favor of keeping the current policy. Previously, the vote was only 6-3, and the new-found consensus for less easing sent the pound higher.
The minutes of the most recent meeting of the Bank of Japan were also released and showed that the BOJ expects the economy to return to a modest recovery path. They also showed some contention to intervene in the bond markets to cap rate volatility as it could be seen as a change of policy.
S&P 500 futures fell 3.6 points to 1,667.60.
The EUR/USD was lower at 1.3146.
Spanish 10-year government bond yields fell 1 basis point to 4.68%.
Italian 10-year government bond yields fell 1 basis point to 4.45%.
Gold fell 0.46% to $1,284.40 per ounce.
Asian shares were mixed overnight with Chinese shares lagging on comments from a former high-ranking politician who said that the government could revise down its GDP target to 7%. The Japanese Nikkei Index rose 0.11% and the Topix Index gained 0.22%. In Hong Kong, the Hang Seng index gained 0.28% while the Shanghai Composite Index dropped 1.01% in China. Also, the Korean Kospi rose 1.13% and Australian shares fell 0.09%.
European shares were lower overnight on global growth fears ahead of Bernanke's testimony. The Spanish Ibex Index fell 1.01% (is now down 5.12% in the last month) and the Italian FTSE MIB Index fell 0.67%. Meanwhile, the German DAX dropped 0.47% and the French CAC 40 Index declined 0.53% while U.K. shares fell 0.4%.
Commodities were mixed overnight as copper lagged on China fears. WTI crude futures fell 0.74% to $105.22 per barrel and Brent crude futures rose 0.28% to $109.40 per barrel. Copper futures fell 1.41% to $314.50 per ounce. Gold was lower and silver futures declined 0.88% to $19.76 per ounce.
Currency markets were on the move again ahead of Bernanke's testimony, as the pound gained and the dollar recouped some of Tuesday's losses against other majors. The EUR/USD was lower at 1.3146 and the dollar rose against the yen to 99.63 while the pound gained against the dollar to 1.5191. Overall, the Dollar Index rose 0.12% on strength against the yen, the Canadian dollar, and the euro.
Earnings reported Tuesday
Key companies that reported earnings Tuesday include:
Johnson & Johnson (JNJ) reported second quarter earnings per share of $1.48 vs. $1.39 expected on revenue of $17.9 billion vs. $17.71 billion a year ago.
Coca-Cola (KO) reported second quarter earnings per share of $0.63, in line, on revenue of $12.75 billion vs. $12.97 billion expected.
Goldman Sachs (GS) reported second quarter earnings per share of $3.70 vs. $2.82 expected on revenue of $8.61 billion vs. $7.98 billion expected.
CSX Corp. (CSX) reported second quarter earnings per share of $0.52 vs. $0.47 expected on revenue of $3.01 billion vs. $3.02 billion expected.
Mosaic (MOS) reported fourth quarter earnings per share of $1.14 vs. $1.15 expected on revenue of $2.69 billion vs. $2.67 billion expected.
Yahoo (YHOO) reported second quarter earnings per share of $0.35 vs. $0.30 a year ago on revenue of $1.14 billion vs. $1.08 billion expected.
Stocks moving in the premarket included:
American Tower (AMT) shares fell 3.74% premarket following a downgrade from "buy" to "neutral" at ISI Group.
Zagg Inc. (ZAGG) shares fell 12.12% premarket as the company lowered guidance for the second time this year.
Meade Instruments (MEAD) shares rose 14.75% premarket as the company terminated its merger agreement with Ningbo Sunny Electric.
Realogy (RLGY) shares rose 0.43% as the company reported decent guidance and announced the sale of 25.125 million shares of stock by selling holders.
Notable companies expected to report earnings Wednesday include:
IBM (IBM) is expected to report second quarter earnings per share of $3.77 vs. $3.51 a year ago on revenue of $25.36 billion vs. $25.78 billion a year ago.
Bank of America (BAC) is expected to report second quarter earnings per share of $0.25 vs. $0.19 a year ago on revenue of $22.79 billion vs. $21.97 billion a year ago.
Intel (INTC) is expected to report second quarter earnings per share of $0.39 vs. $0.54 a year ago on revenue of $12.89 billion vs. $13.5 billion a year ago.
American Express (AXP) is expected to report second quarter earnings per share of $1.22 vs. $1.15 a year ago on revenue of $8.3 billion vs. $7.96 billion a year ago.
Abbott Labs (ABT) is expected to report second quarter earnings per share of $0.44 vs. $0.43 a year ago on revenue of $5.52 billion vs. $9.81 billion a year ago.
EBay (EBAY) is expected to report second quarter earnings per share of $0.64 vs. $0.56 a year ago on revenue of $3.89 billion vs. $3.4 billion a year ago.
On the economics calendar Wednesday, MBA purchase applications and housing starts are out ahead of Bernanke's testimony in front of the House Financial Services Committee. Also, the Beige Book is due out. Overnight, British retail sales are due out and Spain and France are set to auction bonds.
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