N AMERICAN MORNING BRIEFING: Stocks Seen Down, Sentiment Poor

7th Jul 2010 11:35

DJIA Futures 9630.5 -53.5 -0.6% S&P 500 Futures 1018.0 -6.2 -0.6% Nasdaq Futures 1725.1 -9.4 -0.5% Above are as of 0615 ET FTSE 100 4908.8 -56.2 -1.1% Xetra DAX 5866.0 -75.0 -1.3% CAC40 3370.2 -53.2 -1.6% Above are as of 0615 ET Nikkei 225 9279.7 -58.4 -0.6% Hang Seng 19857.1 -227.0 -1.1% Above are closing prices SNAPSHOT: -Stocks seen lower; Treasurys higher; dollar mixed; Nymex crude lower at $71.96; gold lower at $1187.45. -Watch for: ICSC-Goldman Sachs Chain Store Sales Index at 0745 ET. OPENING CALL: Stock futures are indicating a lower open, following weak sessions in Europe and Asia as fears about global growth continue to dent investors' sentiment. James Hughes from CMC Markets in London said the negative tone was set to continue Wednesday after the previous session's late selloff on Wall Street. "We had some weak ISM numbers yesterday and there's a growing fear that the U.S. recovery isn't all that strong," he said. EQUITIES: BP's (BP) chief executive Tony Hayward met this week with Abu Dhabi's powerful Crown Prince Mohammed bin Zayed Al Nahyan and would be happy to sell the oil-rich sheikdom a 10% stake in the U.K. oil giant that's struggling to cap the Gulf of Mexico oil-spill disaster, a person with knowledge of the meeting said. Hayward flew into Abu Dhabi on Tuesday for meetings with officials including the Crown Prince and also spoke to the company's employees in the emirate in a town hall gathering, according to a person familiar with his itinerary. "He'd be happy for Abu Dhabi to take a 10% equity stake," the person who asked not to be identified said. A spokeswoman for BP in London declined to comment on specific meetings but said Hayward "is visiting key business partners as well as staff." BP shares were up 4.6% in Frankfurt at 0601 ET. Family Dollar Stores' (FDO) fiscal third-quarter earnings increased 19% as the discount retailer continued to report higher sales and margins. The company said the strength continued into June, with the month's same-store sales up 5.5%. As such, it predicted growth of 5% to 7% for the fourth quarter, but sees a profit of 46 cents to 51 cents as it anticipates continued cautiousness by shoppers. Analysts were projecting a profit of 53 cents. Family Dollar shares were up 1.8% in Frankfurt at 0615 ET. China's Ministry of Industry and Information Technology said Wednesday it is still examining Google's (GOOG) application to renew its content license, in the government's first comments on the tech giant's status since it announced it was changing how users in China access its search service. Wang Lijian, spokesman for the ministry, said Google's application for annual renewal of its Internet license came close to the end-of-June deadline, pushing back the approval process. The license Google uses technically expires in 2012, but must be renewed annually. Without a license, Google likely wouldn't be able to use its mainland Chinese search address. Meanwhile, Google's Chrome Web browser reached 7.24% of the world-wide browser market in June and is the fastest-growing program for surfing the Web, according to data from NetApplications.com. Google says Chrome had more than 70 million active users in May, up from 30 million in June 2009. Google shares were down 0.2% in Frankfurt at 0538 ET. Microsoft (MSFT) is planning to lay off a small number of employees as early as this week, the Wall Street Journal reported, according to a person familiar with the matter. The number of jobs cuts planned by the Redmond, Wash., software company couldn't be learned. But this person said the number of people affected is far smaller than the approximately 5,000 employees Microsoft laid off last year. Microsoft shares were down 0.4% in Frankfurt at 0533 ET. In M&A news, Alcon (ACL) said late Tuesday it was buying a privately held eye-surgery laser company for $361.5 million in cash plus more in possible milestone payments, as the eye-care products company remains in the midst of an uncertain takeover itself. The company--which makes eye drugs, lens solutions and surgical products--said it was acquiring LenSx Lasers, which makes lasers that perform cataract surgery. It developed the first femtosecond laser to get approval for cataract surgeries from the Food and Drug Administration, the company said. A femtosecond is one millionth of a nanosecond. Walt Disney (DIS) plans to expand a program in China that aims to teach English to 150,000 children a year by 2015, the Financial Times reported, citing a company official. Russell Hampton, president of Disney Publishing Worldwide, said the company wants to expand from 11 to 148 schools across China in five years. "It is a very sizeable opportunity, something that can deliver operating earnings of well over $100 million in the next five years," he told the paper in an interview. Disney shares were up 1.1% in Frankfurt at 0508 ET. BONDS: Treasurys were up in London on rising concerns over a slowdown in U.S. growth. Data out Tuesday showed non-manufacturing activity slowing, following from last week's disappointing jobs report and factory orders data that also pointed to the pace of economic activity decelerating. The 2-year note was up at 100-01+/32 to yield 0.597%, the 10-year note was up at 105-29+/32 to yield 2.913%, and the 30-year bond was up at 108-18/32, yielding 3.887%. Corporate bonds: Spreads on European corporate and sovereign credit default swap indexes widened as renewed worries about global economic growth weighed on financial markets. FOREX: Disappointment over the non-manufacturing ISM survey continued to ripple through financial markets, knocking the euro lower but helping the dollar and the yen to reestablish their safe-haven positions. Coming after a long line of other disappointing data, the survey increased fears that the recovery has stalled and undermined the performance of stock markets in Asia and Europe. By 0530 ET, the dollar was down in Europe at Y87.07, while the euro was down at $1.2567 and the pound had risen to $1.5098. COMMODITIES: Oil futures were stable, reversing earlier falls, despite losses on major European equities markets, which were down between 0.8% and 1.3% since opening. Prices were consolidating after a sharp slide late Tuesday wiping out a morning rally. "The market is lacking a bit of direction this morning after Tuesday afternoon," said a broker at Bache Commodities. Gold was holding relatively steady, having fallen Tuesday through the psychological $1,200-a-troy ounce to a six-week low. Analysts, however, were predicting further consolidation by investors in the days ahead, keeping downward pressure on prices. =======TODAY'S CALENDAR======= ET PERIOD 0700 Jul 2 MBA Weekly Mortgage Applications Survey 0730 Jun Challenger Job-Cut Report 0745 Jul 3 ICSC-Goldman Sachs Chain Store Sales Index 0855 Jul 3 Johnson Redbook Retail Sales Index 1530 Minneapolis Fed's Kocherlakota speaks on taxing risk in Montreal 1630 Jul 2 API Weekly Statistical Bulletin ============================== OTHER TOP STORIES OF THE DAY: WSJ: ISRAEL OFFERS PEACE STEPS, IN US AND MIDEAST Israeli Prime Minister Benjamin Netanyahu told President Barack Obama his government was prepared to take "concrete steps" to bring about direct Middle East peace talks, as the two leaders sought to heal ties that have frayed during the past year over the issue of Palestinian statehood and Israel's blockade of Gaza. GUNS MISSING FROM NETANYAHU SECURITY DETAIL - US MEDIA Four guns went missing and were believed to have been stolen from Israel Prime Minister Benjamin Netanyahu's security detail after American Airlines lost luggage containing the weapons, NBC reported. CHINA AGBANK IPO TOTALS $19.21B Agricultural Bank of China Ltd., the last of China's four big banks to go public, raised $19.21 billion in Hong Kong and Shanghai and is still in the running to pull off the biggest initial public offering ever. CHINA SAFE: HOPE US REDUCES RELIANCE ON DEBT EXPANSION China's foreign-exchange regulator said Wednesday it hopes the U.S. and other major issuers of reserve currencies can reduce their reliance on fiscal debt expansion and preserve the value of their currencies to safeguard investor interests. ABA SAYS FEWER CONSUMER DELINQUENCIES IN 1Q An American Bankers Association report released Wednesday showed fewer U.S. consumers were delinquent on loans, an indication of modest improvements as the economy forges a long haul toward sustained growth. BLACKSTONE GROUP DELAYS FINAL CLOSE FOR MEGA FUND Blackstone Group LP (BX) has delayed the final close of its latest mega fund until later this year, hoping to raise more capital, said two people familiar with the matter. WSJ: OBAMA PLANS RECESS APPOINTMENT FOR HEAD OF MEDICARE AND MEDICAID President Barack Obama plans to install his nominee to oversee Medicare and Medicaid on Wednesday, using a tactic aimed at averting a bitter fight in Congress. WSJ: SHOPPING CENTERS STRUGGLE, BUT HOPE SEEN Vacancies and lease rates at U.S. shopping centers continued to worsen in the second quarter, but the slowing pace of the deterioration hints at a recovery starting in the coming quarters. -By David Crawshaw, Dow Jones Newswires; +44 207 842 9252; [email protected] (MORE TO FOLLOW) Dow Jones Newswires July 07, 2010 06:35 ET (10:35 GMT)