U.S. stock futures were higher Tuesday morning, pointing to a continuation of Monday's strong rally, albeit with more moderate gains, as the government takes over mortgage giants Fannie Mae and Freddie Mac. Investors will eye data on pending home sales and wholesale trade due at 10:00 a.m. today, and will also be interested in the OPEC meeting as oil resumed its decline.Meanwhile, British natural gas producer BG Group PLC abandoned its hostile takeover bid for Origin Energy Ltd., Australia's second-largest power retailer, on Monday, after Origin announced a $7.9 billion coal seam liquefied natural gas joint venture with ConocoPhillips (NYSE: COP).
In what seems to be appropriate on a day housing data is on tap, Credit Suisse downgraded four U.S. homebuilders -- Toll Brothers (NYSE: TOL), Pulte Homes (NYSE: PHM), D.R. Horton (NYSE: DHI) and KB Home (NYSE: KBH) -- to Neutral from Outperform due to lower traffic and valuation. The broker also said home prices need to fall 9% further and credit availability must improve to spur sales and restore affordability.
Staying with analyst calls:
- Procter & Gamble (NYSE: PG) was downgraded by Merrill Lynch to Neutral from Outperform, citing valuation.
- Hewlett-Packard (NYSE: HPQ) was upgraded by Bernstein from Market Perform to Outperform.
- Kimberly Clark (NYSE: KMB) was upgraded by Citigroup from Hold to Buy. The target prices was upped from $60 to $71.
- eBay (NASDAQ: EBAY) was initiated by Stanford Research with Hold and $26 target price.
UAL Corp. (NYSE: UAUA) saw its stock yesterday plunge following a bankruptcy story from 2002 that resurfaced as new. Trading was halted for a while, and despite denials, the stock closed down over 11% Monday. This morning, UAUA is up over 2.5% as the stock continues its attempt to reach the level prior to this whole fiasco.
Apple Inc. (NASDAQ: AAPL) shares also fell Monday, as much as 5%, although closed down only 1.4% on Monday ahead of its "Let's Rock" event today. Many expect Apple to roll out a new iPod line and give an update on iPhone sales. While this is common with Apple share to sell ahead of announcements, there are concerns about overall consumer spending.
Dell Inc. (NASDAQ: DELL) founder Michael Dell bought $100 million of shares last week after the stock plunged following disappointing earnings, paying $20.42 a sharefor 3.5 million shares on Sept. 4, and $20.67 for 1.378 million on Sept. 5. The stock has declined 18% this year. Shares are up over 2.5% this morning.
And in financials, Wachovia (NYSE: WB) named David Zwiener chief financial officer, effective Oct. 1. WB shares were downgraded to Underperform by Merrill Lynch and cut its target price on the stock by $2 to $16. Shares are down 3% in pre-market trading.
Wells Fargo & Co. (NYSE: WFC) said it will take a third-quarter write-down on its investments in securities issued by Fannie Mae and Freddie Mac.
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