Monday, December 10, 2012

Futures Defy Weak Overseas Sentiment; Target, JCP in Spotlight

Overseas stocks were mostly down on Wednesday, particularly in Hong Kong, but U.S. index futures pointed higher early on Wednesday. It’s a curious situation given the pattern of the past two weeks — U.S. stocks have tended to trade on European sentiment.

My colleague Brendan Conway sees a possible shift in sentiment, with some investors trading emerging market risk for U.S. risk. Barrons.com Editor Randall Forsyth also quotes Richard Russell saying that investors may simply be picking up some oversold stocks given that the market has been down 10 of the last 11 days. Either way, “risk-on” is peeking its frightened little head out this morning.

Housing starts rose in April, and March numbers were revised upwards, which gave U.S. stocks an extra jolt.

Dow futures rose 61 points to 12,666; S&P 500 futures rose 7.8 points to 1,336.

Target (TGT) rose 1.7% in pre-market trading on better than expected earnings.

JC Penney (JCP) plunged 15% after a very messy earnings report in which it withdrew its GAAP guidance and suspended its dividend.

General Electric (GE) rose 2.7% after GE Capital resumed paying a dividend to the parent company.

General Motors (GM) rose 3.9% after Berkshire Hathaway (BRKB) revealed a new stake in the company

Abercrombie & Fitch (ANF) fell 5.9% after the retailer’s same-store sales declined on weakness in Europe.

This afternoon we’ll be posting updates from the Ira Sohn investment conference in New York, where top investors like John Paulson, David Einhorn and Bill Ackman are expected to speak and give their latest investment ideas. Stocks tend to move based on presentations at the conference. We’ll also have more on what top investors have been buying and selling, based on 13f SEC filings that were released late on Tuesday.

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