The latest round of data has done nothing to inspire action ahead of the open. Retail sales increased by 0.4% during January. That’s only half of the 0.8% increase that had been expected, on average, among economists polled by Briefing.com. Although the increase in sales failed to match what had been broadly predicted, it did mark an improvement from the flat sales rate posted for the prior month.
Excluding autos, retail sales actually climbed by 0.7%, which is greater than the 0.5% increase that had been widely anticipated. The surprisingly strong increase comes after prior month sales were revised downward to reflect a 0.5% decline, though.
Separately, export prices that exclude agricultural items were flat in January after they declined by 0.2% in the prior month. Meanwhile, import prices that exclude oil increased by 0.1% in January, just as they had in the prior month.
Rating agency Moody’s warned it may cut the triple-A ratings of France, Britain and Austria and it downgraded six other European nations including Italy, Spain and Portugal, citing growing risks from Europe’s debt crisis.
Moody’s move was less aggressive than rival agency Standard & Poor’s, but its action puts London’s prized top credit rating in jeopardy for the first time.
It said it was worried about Europe’s ability to undertake the reforms needed to address the crisis and the amount of funds available to fight it. It also said the region’s weak economy could undermine austerity drives by governments to fix their finances.
The euro and sterling fell after the announcement, with pound falling 0.4 percent to $1.5703 and the single currency dipping 0.3 percent to $1.3154. European and U.S. equity index futures were also lower.
The U.S. rating agency said it changed the outlooks for the ratings of France, Britain and Austria to negative due to “a number of specific credit pressures that would exacerbate the susceptibility of these sovereigns’ balance sheets.”
Germany’s top-tier rating was described as “appropriate” by Moody’s, and it affirmed the triple-A rating on the euro zone’s bailout fund, the European Financial Stability Fund (EFSF).
Advancers
Health Management Associates Inc. HMA +4.49% shares climbed 5.2% a day after the hospital operator reported fourth-quarter earnings that topped estimates.
Michael Kors Holdings Ltd. KORS +16.78% shares climbed 15% after the fashion house, which went public in mid-December, reported fiscal third-quarter earnings that topped forecasts.
Ultra Clean Holdings Inc. UCTT +16.67% shares rallied 16% after the provider of equipment to semiconductor manufacturers projected first-quarter earnings above expectations.
Decliners
Masco Corp. MAS -6.27% shares declined 6.7% after the building-products supplier late Monday reported a fourth-quarter loss wider than consensus estimates.
Seattle Genetics Inc. SGEN -6.38% shares fell 5.2% a day after the drug developer reported net losses more than doubled in 2011 from the year before.
Stocks to Watch
Among the companies whose shares are expected to actively trade in Tuesday’s session are Insight Enterprises Inc. (NSIT), Ultra Clean Holdings (UCTT) and Masco Corp. (MAS).
Insight Enterprises’ fourth-quarter earnings surged 39% as the informational technology services company reported sharply higher sales in its Asia Pacific region. Shares were up 14% at $21.65 as the company easily beat earnings expectations and forecast upbeat 2012 income.
Ultra Clean’s fourth-quarter earnings more than doubled after a tax benefit, though the supplier for original equipment manufacturers in the semiconductor, flat panel and other industries saw its revenue hurt by weak demand. Shares jumped 17% to $9.10 after hours.
Masco’s fourth-quarter loss narrowed as the building-products maker reported lower impairment charges as well as an income tax benefit, though the company’s sales grew less-than-expected. Shares fell 4.8% to $12.60 as Masco’s adjusted loss also missed analyst expectations.
Overnight Headlines (Links)
Greek Economy Shrinking Rapidly
Economics/FedSpeak
- 7:30 am ET: NFIB small business survey for January
- 8:30 am: Retail sales for January. Economists expect a 0.9% increase compared to a 0.1% advance during the previous month.
- 8:30 am: Import prices for January, which are expected to rise 0.3%. In December import prices ticked 0.1% lower.
- 10:00 am: Business inventories for December. Economists expect a 0.5% gain, compared to the 0.3% rise a month earlier.
- 8:45 am: Philadelphia Fed President Charles Plosser speaks
- 5:40 pm: Atlanta Fed President Dennis Lockhart speaks
Earnings:
- Arch Capital
- Avon Products
- Bob Evans Farms
- BorgWarner
- Chemed
- Fossil
- Goodyear Tire
- HCP
- Hospira
- Host Hotels
- Marsh & McLennan
- MetLife
- Michael Kors
- Omnicom
- Questar
- TransCanada
- Valmont Indus
- Valspar
- Watson Pharma
- Weight Watchers
- Willis Group
- Yingli Green Energy
- Zipcar
- Zynga
From an intermediate perspective, the S&P 500 is 99.8% above the March 2009 closing low and 13.6% below the nominal all-time high of October 2007.
