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U.S. futures mixed ahead of earnings, data; Dow Jones up 0.42%

Published 07/25/2012, 06:55 AM
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Investing.com - U.S. stock futures pointed to a mixed open on Wednesday, as investors awaited the release of a fresh series of earnings reports as well as U.S. economic data, while concerns over the worsening of the debt crisis in the euro zone continued to weigh.

Ahead of the open, the Dow Jones Industrial Average futures pointed to a 0.42% rise, S&P 500 futures signaled a 0.46% increase, while the Nasdaq 100 futures indicated a 0.38% drop.

Investors remained cautious as the yield on Spanish 10-year government bonds remained above the 7.50% level, beyond the 7% threshold widely considered unsustainable in the long run, fuelling concerns that a full-scale sovereign bailout is inevitable.

Meanwhile, weak economic data out of German and the U.K. indicated that Europe’s largest economies are being affected by the debt crisis in the region.

In addition, officials from the European Union and the International Monetary Fund said Greece had little hope of meeting the terms of its bailout, casting fresh doubts over the country’s future in the euro zone.

Tech stocks were expected to be active, after Apple’s earnings fell short of expectations due to the sagging European economy and as consumers held off on buying its flagship iPhone ahead of a new version expected in the fall. Apple shares plummeted 4.77% in pre-market trade.

Blackberry maker and rival Research In Motion tumbled 1.88% following the results.

The Internet sector was also likely to be in focus after Netflix, the world’s largest video-subscription service, raised doubts over whether the company will meet its user growth targets this year. Shares dove 19.14% in early trading.

On the other hand, Yahoo edged up 0.13% in pre-market trade after hedge fund manager Dan Loeb of Third Point purchased another 2.5 million shares of the company for about USD39.5 million.

Elsewhere, shares in Broadcom jumped 1.56% in late trading, after the chip maker forecast third-quarter sales that may exceed some analysts’ estimates, helped by strong demand from its smartphone customers.

Also in earnings, ArcelorMittal saw shares surge 3.04% in early trading, although the steel company announced a 63% fall in net income in the first half due to weak prices and falling deliveries.

Other stocks in focus included auto maker Ford, expected to report sharply lower quarterly earnings later in the day, hurt by sliding demand in Europe. In June, Ford said economic conditions in Europe had deteriorated sharply since the beginning of the year.

Visa, PepsiCo, Caterpillar, Eli Lilly, WellPoint, Boeing and Bristol-Myers Squibb were also scheduled to announce results later Wednesday.

Across the Atlantic, European stock markets were higher. The EURO STOXX 50 jumped 0.98%, France’s CAC 40 climbed 0.77%, Germany's DAX advanced 0.57%, while Britain's FTSE 100 rose 0.21%.

During the Asian trading session, Hong Kong's Hang Seng Index fell 0.7%, while Japan’s Nikkei 225 Index tumbled 1.4%.

Later in the day, the U.S. was to release official data on new home sales, as well as a report on crude oil stockpiles.


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