S&P futures vs fair value: -5.50. Nasdaq futures vs fair value: -9.80. Stock futures are under modest pressure this morning. The tone comes as Europe’s major bourses move lower, despite a positive overnight session in Asia. Weakness in Europe has also implicated the euro, which was last quoted with a 0.4% loss at about $1.31, but yields on the debt of countries in both the eurozone core and periphery have moved in mixed fashion.
Earnings reports have been met with varied responses. Tech giants and Dow components IBM (IBM 202.50, -4.95) and Intel (INTC 27.63, -0.84) both bested bottom line expectations for the latest quarter, but their shares are down ahead of the open. Yahoo! (YHOO 15.58, +0.57) did the same, but its shares have attracted a bid. Financial outfits BlackRock (BLK 201.81, +0.00) and PNC Financial (PNC 63.41, +0.00) both posted better-than-expected bottom line results, but Bank of New York (BK 22.70, -1.10) posted a less impressive report. Abbott Labs (ABT 61.20, +0.77) and Halliburton (HAL 33.26, +0.60) also announced earnings that exceeded what Wall Street had generally expected. Note: ticker quotes reflect premarket prices.
There aren’t any economic items of consequence scheduled for today, but the calendar does feature the latest weekly oil inventory report at 10:30 AM ET.
Fears of a resurgence in the euro zone debt crisis boosted demand for safe-haven German bonds on Wednesday, while the Bank of England and a European Central Bank official signaled more monetary policy easing measures were unlikely.
The single currency also fell against the dollar as growing bad loan problems at Spanish banks added to the country’s economic woes, and French president Nicolas Sarkozy, fighting for re-election, warned a strong euro hurt exporters.
Intel and IBM each topped earnings expectations in the first quarter despite weak demand in some parts of their developed-world operations, while also issuing stronger revenue forecasts for the rest of the year.
However, shares in the technology industry bellwethers, both of which had seen strong rallies since the start of the year, fell back by more than 2 per cent in after-market trading as investors waited for clearer evidence that revived growth was taking hold.
IBM reported revenues of $24.7bn, unchanged from a year before, as declines in hardware sales and parts of its services business offset further solid growth from software. Big Blue blamed the services performance on weaker demand from government clients and pressure in Japan, where it lost $60m on two underperforming contracts.
Sales of computer hardware also fell back by 7 per cent from the strong performance of the year before as IBM weathered a low point in its mainframe product cycle. Mark Loughridge, chief financial officer, said that the hardware division “should regain revenue growth” in the second half of this year, with services reporting “double-digit profit growth.”
Intel also said revenues remained little changed from a year before, at $12.9bn, with strong demand in emerging markets and from business customers for computers based on its chips balanced out by “softness” in the consumer segment in mature markets.
However, the world’s biggest chipmaker forecast second-quarter revenues ahead of Wall Street expectations as it looked forward to the launch of products featuring new processors, including its first to feature in smartphones. The world’s biggest chipmaker by revenues said it expected around $13.6bn in sales in the current quarter, ahead of analyst estimates of $13.4bn.
Catalyst Health Solutions [CHSI 63.54 2.34 (+3.82%) ] – The company is being acquired by SXC Health Solutions [SXCI 80.265 1.815 (+2.31%) ]in a $4.4 billion cash and stock deal. The transaction values Catalyst at $81.02 per share, 28 percent above Tuesday’s close. Both companies specialize in pharmacy benefit management tools.
BlackRock [BLK 201.81 3.63 (+1.83%) ] – The company earned $3.16 per share for its latest quarter, 12 cents above estimates. The world’s biggest asset fund manager says its results were boosted by strong demand for its exchange-traded fund offerings.
Abbott Laboratories [ABT 60.43 0.58 (+0.97%) ] – Abbott Labs earned $1.03 per share for the first quarter, three cents above estimates. Revenues also beat consensus, as Abbott saw improved sales of prescription medicines, nutritional products, and medical devices.
Polaris Industries [PII 73.13 0.97 (+1.34%) ] – The maker of off-road vehicles earned $0.85 per share for the first quarter, eight cents above estimates. Revenue was well above analyst forecasts, and the company also raised its outlook for the fiscal year because of stronger than anticipated sales.
Best Buy [BBY 21.92 0.23 (+1.06%) ] – The electronics retailer is rising as speculation increases about a possible takeover, following the recent resignation of CEO Brian Dunn. The attractiveness of Best Buy as a takeover target is highlighted in an article this morning in the Minneapolis Star-Tribune.
THQ [THQI 0.4501 -0.0199 (-4.23%) ] – The videogame maker has raised its fourth-quarter revenue outlook, due to strong sales of its “Saints Row: The Third” game.
PNC Financial [PNC 63.41 1.27 (+2.04%) ] – PNC reported first-quarter profit of $1.44 per share, one cent above estimates, with revenues also registering a slight beat. Quarterly results were helped by a drop in the bank’s provision for credit losses.
Quest Diagnostics [DGX 60.29 1.86 (+3.18%) ] – The medical lab operator earned $1.07 per share for the first quarter, excluding certain items, six cents above estimates. Quest is also raising its 2012 outlook, as cost reductions kick in and as demand grows for its gene-based testing services.
Halliburton [HAL 32.66 0.60 (+1.87%) ] – The oilfield services company earned 89 cents per share, excluding certain items, four cents above estimates. Halliburton’s results were helped by strong North American markets.
Textron [TXT 27.65 0.64 (+2.37%) ] – The diversified manufacturer earned 41 cents a share, excluding certain items, for the first quarter, six cents above estimates, as the company saw a strong recovery in its aircraft and helicopter business
International Business Machines [IBM 207.45 4.73 (+2.33%) ] – The company earned $2.78 per share for its first quarter, 13 cents above estimates, and also raised its outlook, but its revenues were also somewhat short of analyst estimates.
Berkshire Hathaway [BRK.A 121310.00 1785.00 (+1.49%) ] – Warren Buffett has disclosed that he has Stage One prostate cancer. Buffett says the cancer has not spread to any other part of his body and that his doctors do not consider this to be in the least bit life threatening.
Intel [INTC 28.47 0.065 (+0.23%) ] – The chipmaker earned 53 cents per share for the first quarter, three cents above estimates, with revenues also above consensus. But Intel says expenses related to ramping up new production would impact gross margins more than Wall Street has been forecasting.
Yahoo [YHOO 15.01 0.225 (+1.52%) ] – Yahoo earned 24 cents per share for the first quarter, 7 cents above estimates. Investors are taking this as a sign of progress under new CEO Scott Thompson, with net income up 28 percent from a year earlier.
CSX [CSX 22.44 0.36 (+1.63%) ] – The railroad operator earned 43 cents a share for the first quarter, five cents above estimates. Coal volume continues to slump, but CSX reported increases in so-called “intermodal” volume, which refers to freight moved by two or more modes of transportation.
Cree [CREE 31.90 0.98 (+3.17%) ] – The electronic components maker forecast current quarter profit below Street forecasts. Cree sees fiscal fourth-quarter profit at 20 cents to 26 cents per share, compared to estimates of 28 cents, because of softer demand and a glut in its key component markets.
Intuitive Surgical [ISRG 545.53 4.44 (+0.82%) ] – The company earned $3.50 per share for the first quarter, well above estimates of $3.14. The maker of surgical products benefited from the growing use of robotic surgical procedures, with its da Vinci line gaining popularity in procedures designed to treat cancer.
Amazon.com [AMZN 188.39 2.89 (+1.56%) ] – The online retailer has acquired the exclusive North American rights to the 14 James Bond books written by the late Ian Fleming. All retailers will be able to sell paperback editions, with the digital versions available — at least at first — only in Amazon’s Kindle e-book store.
Apple [AAPL 609.70 29.57 (+5.1%) ] – Goldman Sachs has raised its price target for Apple to $750 from $700, and also raised earnings estimates for the current quarter. Additionally, a Wall Street Journal “Heard On The Street” column suggests that — despite the recent pause in the meteoric rise of its stock price — Apple shares may still be undervalued.
GNC [GNC 34.71 1.26 (+3.77%) ] – The health products retailer will sell a new line of nutrition products in a venture with actor Mark Wahlberg.
Seagate Technology [STX 27.89 -0.615 (-2.16%) ] – The hard drive maker earned $2.64 per share for its fiscal third quarter, well above estimates of $2.11. Seagate’s results were helped by higher hard drive prices, driven by the floods in Thailand that resulted in a drive shortage.
St. Jude Medical [STJ 39.07 0.82 (+2.14%) ] – The maker of medical products earned 86 cents per share for the first quarter, three cents above estimates. It also raised its fiscal year outlook, as the benefits from new products begin to add to the bottom line.