Futures rise on Alcoa beat
Earnings season kicks off with the aluminum maker surprising Wall Street. Also, JCPenney ousts CEO Ron Johnson.
U.S. equity futures rose slightly in premarket trade following a positive report from the economic bellwether Alcoa (AA).
Alcoa reported first quarter earnings per share ex-items of $0.11, which beat estimates of $0.08 per share, but sales fell slightly short of the forecast. Alcoa also reaffirmed its global aluminum forecast of 7% growth and noted strong demand, especially from U.S. automakers and construction companies, and falling global supplies as key catalysts.
In other news, J.C. Penney (JCP) ousted CEO Ron Johnson, and his replacement is former CEO Mike Ullman.
Chinese inflation gained less than expected in March, a sign that the global economy may be slowing slightly from February. Chinese CPI rose 2.1% from a year ago, slower than forecasts of 2.4%. Producer prices fell 1.9%, bigger than the 1.8% decline forecast.
Federal Reserve Chairman Ben Bernanke spoke overnight and hinted that any Fed exit policy would begin with hikes in the interest rate on excess reserves (IOER) and that asset sales would come much later, if at all.
S&P 500 futures rose 2.2 points to 1,561.70.
The EUR/USD was rose to 1.3035 after holding support at 1.3020.
Spanish 10-year government bond yields fell to 4.74% from 4.75%.
Italian 10-year government bond yields were flat at 4.35%.
Gold rose 0.01% to $1,573.70 per ounce.
Asian shares were mixed overnight as Japanese shares halted their post-Bank of Japan rally and Chinese shares rose on hopes of monetary easing in the face of slowing inflation. The Japanese Nikkei Index was flat overnight and the Shanghai Composite Index rose 0.64% while the Hang Seng Index rose 0.7%. Also, the Korean Kospi rose 0.11% and Australian shares popped 1.45%.
European shares were higher as Cyprus and Portugal fears blow over. The Spanish Ibex Index rose 0.92% and the Italian FTSE MIB Index rose 1.14%. Meanwhile, the German DAX rose 0.37% and the French CAC rose 0.48% while U.K. shares rose 0.48%.
Commodities were modestly higher overnight despite the weakness in Chinese inflation. WTI crude futures rose 0.22% to $93.60 and Brent crude futures rose 0.41% to $105.07 per barrel. Copper futures rose 0.67% to $339.55 on both the Chinese news and the Alcoa guidance on the global economy. Gold was higher and silver futures rose 0.36% to $27.24.
Currency markets took a proverbial breather overnight after the massive moves in the yen crosses over the past few days. The EUR/USD was higher at $1.3035 and the dollar fell against the yen to 98.84 after briefly probing the 100 level Monday. Overall, the Dollar Index fell 0.26% on weakness against the euro, the pound and the yen.
Earnings reported Monday
Key companies that reported earnings Monday include:
Alcoa (AA) reported first quarter earnings per share of $0.11 vs. estimates of $0.08 and better than the $0.10 reported a year ago. However, sales were light at $5.83 billion on forecasts of $5.89 billion.
A. Schulman (SHLM) reported second quarter earnings per share of $0.27 vs. $0.40 a year ago, a miss of 32.5%.
AngioDynamics (ANGO) reported third quarter earnings per share of $0.08 vs. estimates of $0.05. Sales were light at $81.6 million on forecasts of $81.7 million.
Mistras Group (MG) reported third quarter earnings per share of $0.07 vs. estimates of $0.17. Revenue was slightly stronger than forecasts at $133.7 million vs. forecasts of $131.62 million.
Stocks moving in the premarket included:
Alcoa (AA) shares fell 0.6% in volatile trading after reporting a bottom-line beat but a bottom-line miss and reaffirming guidance.
J.C. Penney (JCP) shares fell 5.1% premarket after it announced the sacking of Ron Johnson.
Cliff's Natural Resources (CLF) shares rose 2.45% premarket on bullish sentiment for global metals and mining stocks following Alcoa earnings.
Advanced Micro Devices (AMD) shares rose 0.77% premarket on news that Microsoft (MSFT) is set to include the company's chips in its latest Xbox console update. (Microsoft owns and publishes Top Stocks, an MSN Money site.)
Notable companies expected to report earnings Tuesday include:
ADTRAN (ADTN) is expected to report first quarter earnings per share of $0.08 vs. $0.20 a year ago.
PriceSmart (PSMT) is expected to report second quarter earnings per share of $0.77 vs. $0.67 a year ago.
Supervalu (SVU) is expected to report fourth quarter earnings per share of $0.18 vs. $0.36 a year ago.
On the economics calendar Tuesday, the NFIB small business optimism index and ICSC chain store sales data are expected to be released, followed by the Redbook. Also, Fed President Lacker is set to speak and wholesale trade data is due out. In addition, the Treasury is set to auction four-week bills and three-year notes. Overnight, China's trade balance, French, Spanish and Italian industrial production, and the latest OECD global economic forecasts are all due out.
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The offering could become the second-biggest this year if underwriters exercise an option to buy more shares.
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