Morning Report: February 24, 2012

Ahead of the Bell: Dow futures are trading up 29 points and S&P futures are trading up 3 points as the euro hits fresh highs against the dollar and global markets rally.  However, concerns over rising oil costs and the implementation of the Greek rescue plan continue to temper enthusiasm. G20 finance leaders will be meeting this weekend in Mexico with European sovereign debt at the top of the discussion list.

• On the economic calendar today, the Reuters/University of Michigan's consumer sentiment index for February will be out after the market opens, and economists are forecasting a reading of 73.0 versus 72.5 for the previous month.  New home sales for January will also be out after the market opens, and is anticipated to be 315K compared with 307K for December. 


• Companies reporting earnings today include American Water Works, J.C. Penney, Newmont Mining, Portland General Electric, and Westar Energy. The dollar down against the major currencies.  Crude oil is currently trading at $106 a barrel.  Gold is trading at $1,776.    


• Yesterday, stock rose, as better-than-estimated jobless claims and housing reports outweighed disappointing earnings, and guidance from computer maker Hewlett Packard.


• On CNBC today, James Bullard, President of the Federal Reserve Bank of St. Louis, talked about US monetary policy.  Bullard said the US has a very easy monetary policy right now, with operations twist still going on, and it’s a natural time for the FOMC to pause, get more data, and collect their thoughts of what is affecting the economy.  He believes the current monetary policy is walking a fine line, and the Fed has a lot on the table, so it’s time to let it work.  He would not take QE3 off the table completely, especially if the economy deteriorates. Ultimately, the Fed’s future actions depend on how the economy performs. 


• Happy Friday, have a nice day, and a wonderful weekend.

Thursday’s Close

DJIA up 46.02 pts/+0.36%/12,984.69

S&P up 5.80 pts/+0.43/1,363.46

Nasdaq up 23.81 pts/+0.81/2,956.98

Friday’s Futures

Dow Futures up 29.00 pts/+0.23%

S&P Futures up 3.40 pts/+0.26%

Nasdaq Fut up 4.58 pts/+0.20%

Overseas Markets

FTSE +0.17%

CAC 40 -0.57%

NIKKEI 225 +0.54%

HANG SENG +0.12%

Overseas:  World stock markets were up today.  European and Asian markets are up on improving signs over the euro zone sovereign debt crisis and better than expected growth figures from South Korea.

Economic Reports:  Consumer Sentiment expected to be 73.0 at 9:55 a.m. and New Home Sales expected to be 315K at 10:00 a.m.

Top Headlines:    

•  Kenneth Cole proposes to acquire all outstanding shares of Kenneth Cole Productions, Inc. (KCP) for $15 per share in a move to take the company private.


• Citigroup (C) said it has sold its stake in Indian group Housing Development Finance Corp for $1.9 billion, as banks shore up their balance sheets in anticipation of stricter capital rules. 


• Apple (AAPL) is being sued in California by a Chinese firm trying to stop the company from using the iPad name, alleging that Apple used deception when it bought the trade mark. 


• Reports indicate Apollo Global Management and a group of private-equity firms are close to a deal to acquire El Paso Corp.'s (EP) oil and gas exploration unit for about $7 billion.  

Commodities/Currency:

Gold:down $5.10 to $1,781.85
Oil: down 0.45 to $108.23

EUR/USD 1.3410 +0.0036
USD/JPY 80.6000  +0.6365
GBP/USD 1.5801 +0.0050

Volatility Index (VIX): As of the close of business Thursday, February 23, the VIX is down 1.39 at 16.80

Companies Reporting Quarterly Earnings:     

Interpublic Group of Companies (IPG): Q4 EPS of $0.50 beats by $0.11. Revenue of $2.07B (+3.4% Y/Y) in-line.

Alpha Natural Resources (ANR): Q4 EPS of -$0.07 may not be comparable to consensus of $0.27. Revenue of $2.07B (+108% Y/Y) misses by $90M.

Interline Brands (IBI): Q4 EPS of $0.26 beats by $0.02. Revenue of $303M (+2.8% Y/Y) misses by $3M.

Endo Pharmaceuticals (ENDP): Q4 EPS of $1.40 beats by $0.08. Revenue of $803.4M (+57.2% Y/Y) in-line.

Elster Group (ELT): Q4 EPS of $0.41 may not be comparable to consensus of $0.11. Revenue of $474M (-0.6% Y/Y) misses by $14M.

Potomac Electric Power Company (POM): Q4 EPS of $0.15 misses by $0.03. Revenue of $1.23B (-18.6% Y/Y) misses by $520M.

Today’s Opening and Closing Bells:

Timmins Gold Corp. Visits the NYSE CEO Bruce Bragagnolo will ring the opening bell.

inMotion Inc. will ring the closing bell.