N AMERICAN MORNING BRIEFING: Stocks Seen Up Amid Intel Cheer

14th Jul 2010 11:39

DJIA Futures 10327.0 +39.0 +0.4% S&P 500 Futures 1094.1 +4.4 +0.4% Nasdaq Futures 1858.0 +15.5 +0.8% Above are as of 0615 ET FTSE 100 5244.8 -26.2 -0.5% Xetra DAX 6190.9 -0.2 -0.0% CAC40 3623.8 -14.0 -0.4% Above are as of 0615 ET Nikkei 225 9795.3 +258.0 +2.7% Hang Seng 20560.8 +129.7 +0.6% Above are closing prices SNAPSHOT: -Stocks seen mostly higher; Treasurys rangebound; dollar up; Nymex crude lower at $76.74; gold higher at $1,212.94 -Watch for: retail sales at 0830 ET OPENING CALL: Stock futures are indicating a higher open after Intel's strong results late Tuesday continued a positive start to the earnings season. "We're looking fairly positive at the open today on the back of those Intel numbers," said Joshua Raymond at City Index in London. "There are no major corporate earnings out and people are really looking to Google and JP Morgan's results tomorrow, so we will probably see investors having a bit of a pause for breath." The FOMC minutes later Wednesday will be closely watched, particularly for Fed officials' views on the prospects of a double-dip recession, Raymond added. EQUITIES: Nokia Siemens Networks is in talks to buy the telecom-equipment arm of Motorola (MOT), the Wall Street Journal reported, a deal that would hasten the dismantling of the U.S. technology company. The two companies are discussing terms, and a deal could be worth $1.1 billion to $1.3 billion, a person familiar with the matter said. A deal could be reached in the next few weeks, though talks could still fall apart, people familiar with the matter said. Motorola shares were up 1.2% in Frankfurt at 0632 ET. Time Warner Cable (TWC), in the midst of renegotiating its contract to air ESPN, some ABC stations and other Walt Disney (DIS) television networks, is planning print advertisements and an online campaign aimed at stirring up consumer support for its negotiating position. TWC shares were down 0.4% in Frankfurt at 0632 ET. The start of BP's (BP) crucial integrity test of the leaking Gulf of Mexico oil well has been delayed until at least later Wednesday, the U.S. official leading the disaster response said late Tuesday. Adm. Thad Allen, the former U.S. Coast Guard chief, said he had taken the decision to delay the test after meetings with Energy Secretary Steven Chu, a Nobel Prize-winning physicist, and other top experts. BP is poised to test whether a huge 75-ton cap can choke off the leak without threatening the structural integrity of the well. Home-health-care providers Gentiva Health Services (GTIV) and LHC Group (LHCG) are targets of a Securities and Exchange Commission investigation related to possible abuse of Medicare rules, both said separately after the markets closed Tuesday. The investigations concern whether the companies pushed patients into extra, sometimes unnecessary, home-health-care visits to reach a threshold level that secured them thousands more in reimbursements from the government's healthcare program. That practice was brought to light by a Wall Street Journal article in April and followed up weeks later by requests from the Senate Finance Committee. LHC was down 4.4% in Frankfurt at 0632 ET. Europe's antitrust regulator Wednesday cleared a business alliance between AMR's (AMR) American Airlines, British Airways and Spain's Iberia that will allow them to cooperate closely on trans-Atlantic flights. AMR shares were up 3.7% in Frankfurt at 0633 ET. Northrop Grumman (NOC), one of the largest contractors to the U.S. Navy, said late Tuesday it would close one of its seven shipbuilding yards and may sell or spin-off the entire naval business. Northrop Grumman shares were down 0.6% in Frankfurt at 0633 ET. Computer security vendor McAfee (MFE) on Wednesday plans to begin selling a new service that will monitor online records for evidence of consumer identity theft. McAfee shares were up 0.2% in Frankfurt at 0634 ET. BONDS: Treasurys were trading in a tight range in London ahead of retail sales--which were expected to show a 0.3% drop on the month-- while inflationary pressures were expected to remain subdued. The 2-year note was up at 99-30/32 to yield 0.653%, the 10-year note was up at 103-08/32 to yield 3.112%; the 30-year bond was up at 104-22/32, yielding 4.10%. Corporate bonds: Spreads on European corporate credit derivatives indexes tightened Wednesday after strong corporate earnings, a successful Greek treasury bill auction and growing optimism that bank stress tests will help to remove uncertainty from the financial system. FOREX: Poor industrial production data from the euro zone knocked the single currency down from its earlier highs, especially against the dollar. Unexpectedly good employment numbers out of the U.K. also helped to push the pound to a two-month high against the dollar. The euro extended its recent gains against the yen Wednesday as global risk sentiment improved and global equities continued to rally. By 0515 ET, the dollar was up in Europe at Y88.85, while the euro was down at $1.2711 and the pound had risen to $1.5377. COMMODITIES: Crude oil futures prices were little changed but a positive start to the second-quarter earnings season has, to a certain extent overpowered worries over energy demand and is seen lending support to crude for the rest of this week. Monday's caution turned into renewed optimism yesterday, said a PVM Oil Associates analyst. A strong Wall Street start Wednesday would "provide more momentum for the oil bulls." Spot gold was slightly higher in Europe in narrow range trading, however, the euro was softening against the dollar, removing the prime driver behind gold's rally Tuesday. Analysts said gold would look to economic data and the euro for direction in the near term, with resistance still seen around $1,219 a troy ounce. =======TODAY'S CALENDAR======= ET PERIOD 0700 Jul 9 MBA Weekly Mortgage Applications Survey 0830 Jun Advance Monthly Sales for Retail & Food Services 0830 Jun Import & Export Price Indexes 1000 May Manufacturing & Trade: Inventories & Sales 1030 Jul 9 EIA Weekly Petroleum Status Report 1400 FOMC meeting minutes and economic forecast ============================== OTHER TOP STORIES OF THE DAY: WSJ: FED SEES SLOWER GROWTH Federal Reserve officials, who are likely to reveal Wednesday a cut in their assessment of the growth outlook, are divided on how aggressively the central bank should act if the economy slows further. EBAY HIT WITH $3.8 BILLION PATENT SUIT TIED TO PAYPAL EBay has been sued for at least $3.8 billion by a small firm claiming the ecommerce giant infringed several patents to develop its PayPal online payments unit. CALIFORNIA INITIATES 'MAJOR ACTION' AGAINST FANNIE, FREDDIE OVER PACE PROGRAM California Attorney General Jerry Brown said Tuesday he is initiating a "major action" against mortgage giants Fannie Mae (FNM) and Freddie Mac (FRE) and the federal agency that regulates the companies for blocking a green-energy financing program backed by the White House that California and other states were relying on as a way to cut greenhouse gas emissions and consumer energy bills while creating jobs. WSJ: IPHONE STILL IN DEMAND DESPITE GLITCHES Consumers continue to clamor for Apple Inc.'s (AAPL) new iPhone 4, even as negative publicity mounts because of problems with its antenna that can cause dropped calls. EURO-ZONE INFLATION SLOWS ON ENERGY PRICES Euro-zone inflation slowed in line with expectations in June due to weaker energy price gains, indicating the European Central Bank has ample room to keep interest rates at record low levels for some time, official data showed Wednesday. EURO BAILOUT FUND MAKES PROGRESS Plans moved ahead to shore up confidence in the financial health of the euro zone's shaky governments and banks, as the head of a new bailout fund said it would be operational by the end of July and finance ministers agreed to publish the results of Europe-wide bank stress tests on July 23. BOJ LIKELY TO LIFT THIS FY GROWTH FORECAST The Bank of Japan is likely to upgrade Thursday its real economic growth projection for the fiscal year started April from 1.8% to around 2.5%, people familiar with the matter said, due to expectations that strong exports will continue to benefit the overall economy. CHINA REVISES UP 1ST-QUARTER 2009 GDP GROWTH TO 6.5% FROM 6.2% China revised up the first-quarter 2009 gross domestic product growth figure to 6.5% from the original 6.2% growth from the previous year, data on the National Bureau of Statistics' website showed Wednesday. PORTUGAL SELLS EUR1.68B JUNE 2012, JUNE 2019 BONDS, ABOVE PLAN Portugal's Treasury and Government Debt Agency sold EUR1.68 billion of government bonds, or OT, at an auction Wednesday, it said. ECB FUNDING FOR SPANISH BANKS JUMPS 48% IN JUNE FROM MAY European Central Bank funding to Spanish banks hit a new record in June as the banks face increasing difficulties to finance themselves on international markets. GERMAN BOBL SALE SEES GOOD DEMAND AS YIELD OFF FROM LOWS Germany's auction of the five-year federal note met with solid demand Wednesday, in sharp contrast with the previous auction of the same note in May, on a combination of factors. PBOC TO SELL CNY205 BLN BILLS, BONDS IN THURSDAY OPERATION China's central bank said Wednesday it plans to sell CNY45 billion (US$6.64 billion) worth of three-month bills and CNY160 billion worth of three-year bonds in its regular open market operation Thursday. -By David Crawshaw, Dow Jones Newswires; +44 207 842 9252; [email protected] (MORE TO FOLLOW) Dow Jones Newswires July 14, 2010 06:39 ET (10:39 GMT)