Morning Report: April 12, 2012

Ahead of the Bell: Dow futures are trading up 63 points and S&P futures are trading up 7 points as investors become more optimistic that a better than expected first quarter earnings season will overshadow the deteriorating euro zone crisis. Spain, and its debt crisis, is the most recent EU member to come into focus. Central bankers in the US and Japan have signaled their easy monetary policies are expected to continue.

• On the economic calendar today, international trade numbers for February will be out before the market opens and it is expected to be $-51.7 B compared with $-52.6 B for January.  Weekly initial jobless claims will also be out before the market opens and it is forecasted to be 395K versus 357K for the previous week.  Producer price index for March will be announced before the market opens, anticipated to be 0.3% compared with 0.4% for February. 


• New York Federal Reserve President, William Dudley will be speaking to a business group in Syracuse, NY about regional and national economic conditions. The dollar is down against the major currencies.  Gold is trading at $1,654. Crude oil is currently trading at $103 a barrel.


• Yesterday, stocks rebounded from one of the worst performances of the year, after Alcoa Inc. opened the earnings season with an unexpected profit. Also, the ECB signaled that it may  restart its bond buying program.


• On CNBC today, Jim Chanos, Founder & CEO of Kynikos Associates, talked about the challenges facing China.  Chanos said China is desperately trying to cool the property sector, which he believes will prove difficult.  He doesn’t think China will break up its big banks since they currently act as arms of state policy and they have performed well over the last two years.  Chanos does see signs of the Chinese market opening up a little more for companies to invest.  He also noted that the government is having a very difficult time controlling technology and Chanos thinks the “great fire wall” in China has become porous.


• Happy Thursday and have a nice day.

Wednesday’s Close

DJIA up 89.46 pts/+0.70%/12,805.39

S&P up 10.12 pts/+0.74/1,368.71

Nasdaq up 25.24 pts/+0.84/3,016.46

Thursday’s Futures

Dow Futures up 63.00 pts/+0.35%

S&P Futures up 7.40 pts/+0.44%

Nasdaq Fut up 16.22 pts/+0.41%

Overseas Markets

FTSE -0.14%

CAC 40 -0.25%

NIKKEI 225 +0.70%

HANG SENG +0.93%

Overseas:  World stock markets were up today.  European and Asian markets are up after US markets kicked off first quarter earnings season positively with Alcoa.

Economic Reports:  International trade expected to be $-51.7B, Initial Jobless Claims expected to be 359K, & Producer Price Index expected to be 0.3% at 8:30 a.m. and Treasury Budget expected to be $-188.7 B at 2:00 p.m.

Top Headlines:    

• Reports indicate a light sheen of oil can be seen in the central part of the Gulf of Mexico. Royal Dutch Shell Plc (RDS.A), which has nearby wells says it is investigating the matter.  


• Bloomberg reports Caterpillar Inc., (CAT) is about to sell a part of its Bucyrus distribution and support business to a Australian firm for about $400 million. 


• Ford (F) and Dow Chemical (DOW) said they will work together to develop cost-effective ways of using carbon fiber in cars to cut vehicle weight to improve overall fuel economy. 


• Sony Corporation (SNE) said it will cut about 10,000 jobs, or about 6% of its global workforce, as the new CEO tries to reduce cost.


• Reports indicate Roche Holdings AG, in a letter to Illumina Inc., (ILMN) shareholders, said its latest offer of $51 a share was more than a starting point for negotiations.      

Commodities/Currency:

Gold:down $4.82 to $1,654.85
Oil: up 0.47 to $103.07

EUR/USD 1.3149 +0.0039
USD/JPY 81.0265  +0.1715
GBP/USD 1.5959 +0.0047

Volatility Index (VIX): As of the close of business Wednesday, April 11, the VIX is down 0.37 at 20.02

Companies Reporting Quarterly Earnings:     

Rite Aid reports Q4 EPS (18c) vs. Est (14c) and Q4 revenue $7.1B, vs. Est $6.98B.

ENGlobal Corp reports Q4 EPS (15c), vs. Est 3c and Q4 revenue $76.1M, vs. Est $81.5M.

Today’s Opening and Closing Bells:

Aircastle Limited (AYR) will ring the opening bell.

Valspar Kicks Off Start of Painting Season – Announces Valspar Love Your Color Guarantee, CEO Gary Hendrickson will ring the closing bell.

Paras Madho

NYSE Euronext

Market Watch and Corporation Actions

(212) 656- 5404

Nothing herein constitutes an offer to sell or a solicitation of an offer to buy any security or a recommendation of any security or trading practice. Some information included above has been aggregated from multiple public third-party financial news sources for informational purposes only and redistributed to the NYSE Euronext community.  NYSE Euronext does not control the content provided by these sources and does not guarantee the accuracy, integrity or quality of such content.