U.S. Stock Futures Little Changed Before Earnings, Data
U.S. stock-index futures were little changed as Morgan Stanley and General Electric Co. posted earnings that beat analysts’ estimates, and as investors awaited a report on consumer confidence.
Morgan Stanley rose 2.8 percent to $21.34 in early New York trading as earnings beat expectations. GE gained 3.1 percent as earnings topped estimates. Research In Motion Ltd. (RIM) added 6.8 percent after Jefferies & Co. recommended investors buy the shares. Intel (INTC) Corp. lost 5.2 percent after saying sales dropped for a second straight quarter. AT&T Inc. fell 1.4 percent after announcing a pension charge and saying smartphone subsidies put pressure on earnings.
Standard & Poor’s 500 Index (SPX) futures expiring in March fell less than 0.1 percent to 1,475.5 at 7:34 a.m. in New York. The equity benchmark surged to a five-year high yesterday amid better-than-forecast initial jobless claims and housing data. Dow Jones Industrial Average futures lost 1 point, less than 0.1 percent, to 13,541 today.
“Earnings are probably going to be more company-specific, and that moves single stocks more than it moves the market; you’ll have investors digest this information and you could see a little pause,” said Andreas Nigg, head of equity and commodity strategy at Vontobel Asset Management in Zurich, which oversees about $32 billion. “The underlying economy is starting to gain traction, most of the indicators I look at suggest the worst is behind us and there are a lot of good things happening.”
A report due at 9:55 New York time may show U.S. consumer confidence recovered from a five-month low in January. The Thomson Reuters/University of Michigan index of U.S. consumer sentiment for January rose to 75 from 72.9 at the end of last month, according to the median projection of 74 economists in a Bloomberg survey.
In China, economic growth accelerated for the first time in two years. A rebound in industrial output, retail sales and the housing market drove gross domestic product 7.9 percent higher in the fourth quarter from a year earlier, the National Bureau of Statistics said in Beijing today. That compared with the 7.8 percent median estimate in a Bloomberg News survey and 7.4 percent in the previous period.
Industrial output in December rose a more-than-expected 10.3 percent and fixed-asset investment for the year gained 20.6 percent.
Eleven companies in the S&P 500 scheduled to report fourth- quarter earnings today. Some 71 percent of the 62 companies in the gauge to have released results so far have beaten analysts’ forecasts, according to data compiled by Bloomberg.
Fourth-quarter profits at S&P 500 companies grew 2.5 percent, according to analysts’ estimates compiled by Bloomberg. That would be the second-slowest quarterly growth since 2009.
Morgan Stanley (MS), the top equity global underwriter last year, rose 2.8 percent to $21.34 in early New York trading after reporting fourth-quarter earnings that beat estimates. Profit was $507 million, or 25 cents a share, compared with a loss of $250 million, or 15 cents, a year earlier, the New York-based company said today in a statement. Excluding accounting charges tied to the firm’s own debt, profit was 45 cents a share, beating the 27-cent average estimate of analysts surveyed by Bloomberg.
GE added 3.1 percent to $21.95 after reporting higher profit than analysts estimated as earnings at all of its industrial business climbed for the second straight quarter. Adjusted income from continuing operations grew 13 percent to $4.67 billion, or 44 cents a share, in the fourth quarter, GE (GE) said today in a statement. That topped an average estimate of 43 cents a share in a Bloomberg survey.
RIM rose 6.8 percent to $15.93 in early New York trading after Jefferies raised its recommendation on the stock to buy from hold, saying the Blackberry smartphone manufacturer’s quarterly earnings are likely to beat estimates in May and August.
Intel plunged 5.2 percent to $21.50 in New York after the world’s largest semiconductor maker reported a second straight quarter of declining sales.
Fourth-quarter revenue dropped 3 percent to $13.5 billion, the Santa Clara, California-based company said in a statement late yesterday. Net income fell to $2.47 billion, or 48 cents a share. Analysts estimated sales of $13.5 billion and earnings of 45 cents, according to data compiled by Bloomberg.
AT&T (T) retreated 1.4 percent to $32.75 in early New York trading. The largest U.S. phone company recorded a $10 billion fourth-quarter charge for its pension plan and said smartphone subsidies put pressure on profit. Hurricane Sandy and other storms also hurt earnings, lowering fourth-quarter operating income by $175 million, the Dallas-based company said in a filing yesterday. AT&T reports fourth-quarter earnings on Jan. 24.
Capital One (COF) dropped 6.6 percent to $57.50 in New York as fourth-quarter profit missed analyst estimates because of higher loan losses. Net income advanced to $843 million, or $1.41 a share, from $407 million, or 88 cents, a year earlier, the lender said late yesterday. That fell short of the $1.59 average estimate of 21 analysts surveyed by Bloomberg.
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