Activision (NASDAQ: ATVI) late Thursday reported a fourth-quarter profit that handily beat expectations as video games sales nearly doubled with strong demand for Guitar Hero 3 and Call of Duty 4 games. ATVI shares are up over 4.5% in premarket trading.
Bristol-Myers Squibb (NYSE: BMY) and Sanofi-Aventis (NYSE: SNY) are about to face a generic threat from Swiss drug firm, Schweizerhall Holding, that said it's going to soon launch a generic version in Germany of Plavix blood-thinning drug.
Clear Channel (NYSE: CCU) reported its profit soared to $799.7 million or $1.61 per share in the first quarter while revenues rose 4% to $1.56 billion. The results beat expectation even when taken excluding one-time items that have earnings rising 70% to $161.4 million or 32 cents a share.
Stock futures were once again lower this morning, setting up stocks for a sharp decline after AIG reported a big $7.8 billion loss and oil set a record above $125 a barrel. With credit crunch concerns resurfacing and inflation worries on investors' minds, futures point to heavy losses today.
On Thursday, U.S. stocks ended higher despite another surge in oil prices following better-than-expected April sales reports from many retailers including Wal-Mart and Costco. The Dow industrials ended 52 points, or 0.41%, higher, the S&P 500 rose 5 points, or 0.37% and the Nasdaq Composite rose 12 points, or 0.52%.
Without much economic news set for today except for the March U.S. trade gap, investors will focus on AIG's results and their implication on the financial and credit market as well as on oil prices.
American International Group (NYSE: AIG) reported a quarterly $7.8 billion loss after the market close Thursday. AIG also said it will raise $12.5 billion in the coming months as its capital base has deteriorated due to the crisis in the credit markets. Shares of AIG have declined over 7.2% in premarket trading, but the real affect of its results can seen across the financials as fears have resurfaced once again about the impact of the credit crunch on financial firms.
As if that was not enough, adding to the negative sentiment is oil. Crude oil for June delivery climbed as much as $1.43, or 1.3%, to $125.12 a barrel. While prices have retreated somewhat, they remained near $125 at around $124.8 a barrel. For the week, oil has risen 7.4%, making Wall Street nervous about inflation. Mind you, 55%of 372 petroleum industry executives surveyed by KPMG LLP said they think the price of a barrel of crude will drop below $100 by the end of the year.
Unilever (NYSE: UL) is the world's second-largest maker of food and detergent, so you would expect the company to hurt with rising commodity prices. But Unilever has been proactive and has raised prices 4.8% in the quarter to offset its rising costs. In fact, the company said revenue will beat its forecast for the first time in six years on increased prices and sales of Dove soap, Hellmann's mayonnaise and Lipton tea. First-quarter net income climbed 33%, exceeding analysts' estimates.
As expected, April retail sales have so far indeed been strong, although there are some ares weakness is seen.
Costco (NASDAQ: COST) shares are up 1.2% in premarket trading after the warehouse club retailer said April same-store sales increased 8%, beating analysts' expectations of 6.1%.
Wal-Mart Stores Inc. (NYSE: WMT) shares are also higher in premarket trading, up 1.8%, after the world's largest retailer, said same-store sales climbed 3.2%, beating the 2.1% forecast by analysts. Staying with Wal-Mart for a moment, it said it plans to invest millions in Canada and open more supercenters.
The more luxurious items, though, such as lingerie sold at Limited Brands (NYSE: LTD) have seen a slowdown as the company said that April same-store sales fell 5%, falling short of the 2.3% sales decline analysts had anticipated.
U.S. stock futures were higher early Thursday morning as investors digested Toyota's earnings and awaited sales reports from several large retailers.
This is after on Wednesday, U.S. stocks dropped as oil futures surged past $123 a barrel and financials showed more weakness. The Dow industrials fell 206 points, or 1.59%, the Nasdaq Composite fell 44 points, or 1.80%, and the S&P 500 dropped 25 points, or 1.81%.
But today stocks looked set to recover from the previous session large pull back. While Toyota's results show the automaker also struggling in the U.S. market, a stronger dollar may have helped boost sentiment. Investors also expect April retail sales to be strong rising about 1.5% to 2% due to an extra selling day and warmer weather at the beginning of the month.
Not much economic data is due today, only weekly initial jobless claims and March wholesale inventories.
Also on the docket today is a vote the housing aid bill, the Democrats' plan to help strapped homeowners refinance into government-backed mortgages. Already blamed by many for not doing enough to address the crisis, President Bush will likely veto the measures.
News Corp (NYSE: NWS) is scheduled to report earning Wednesday and is estimated to post a profit of 31 cents a share in the fiscal third quarter.
In its attempt to answer consumer demand, Ford Motor Co. (NYSE: F) said Wednesday it plans to greatly increase the use of more fuel-efficient six-speed automatic transmissions. The six-speed automatic transmission, which offers 4-6% better fuel economy, will be in 98% of its North American vehicles by 2012.
Seems that after the recent dealing with Yahoo! Inc. (NASDAQ: YHOO), Microsoft Corp. (NASDAQ: MSFT) Chairman Bill Gates has had enough. He said the company isn't pursuing other deals for now and that Microsoft and Yahoo! should pursue "independent paths." Microsoft still has to show shareholders improvement in Vista and its struggling internet business.
U.S. stock futures were lower early Wednesday as investors, worried about inflation, await data on pending home sales and labor costs. Earnings news in focus this morning comes from tech bellwether Cisco Systems, which gave a cautious outlook, and from Walt Disney, which reported good results.
Despite starting the day on a down note, as oil futures remained high, U.S. stocks closed higher on Tuesday, mostly due to some reassuring comments made on a Fannie Mae (NYSE: FNM) conference call. The Dow industrials ended up 51 points, or 0.40%, the S&P 500 rose 10 points, or 0.77%, and the Nasdaq Composite finished 19 points, or 0.78%, higher.
Today investors will finally have some data to sink in their teeth. First quarter labor productivity and unit costs is out at 8:30 a.m. EDT. Economists expect productivity to rise 1.5% in the first quarter, but for unit labor costs to climb as well.
Also on the docket today are March pending home sales data to be released at 10:00 a.m. and which probably fell another 1%.
After that, weekly crude inventories are scheduled to be reported. Crude futures have held up near $122 a barrel despite the dollar advancing against the yen and the euro.
Kaufman initated Google (NASDAQ:GOOG) with a "buy" and set a $680 price target according toBriefing.com. The news service also reports that Lehman resumed coverage of Microsoft (NASDAQ:MSFT) with an "equal-weght" rating and a price target of $34.
Thomas Weisel maintained at "overweight" rating on Cephalon (NASDAQ:CEPH) although the FDA rejected broader use of its pain drug Fentora according to the AP.
Douglas A. McIntyre is an editor at 247wallst.com.
D. R. Horton (NYSE: DHI) shares are down over 6% in premarket trading after the homebuilder has swung to a loss for its fiscal second quarter of $1.31 billion, or $4.14 per share. With the continued housing slump, the company took hefty charges to write down the value of its inventory. Revenue plunged to $1.62 billion from $2.62 billion a year ago.
Fannie Mae (NYSE: FNM) shares are slumping over 9% this morning after the mortgage lender said it lost $2.2 billion or $2.57 a share in the first quarter due to mounting home-loan delinquencies as the housing slump continued. The results were below, far below that of estimates.
Vodafone Group (NYSE: VOD) said Tuesday that it's signed an agreement with Apple Inc. (NASDAQ: AAPL) to sell the iPhone in ten of its markets including Australia, the Czech Republic, Italy and India.
Stock futures were lower early Tuesday morning as oil prices remained high offsetting any recent optimism about the economy in light of Monday's surprise expansion in the service sector. Several companies are also reporting earnings today and will be in focus.
U.S. stocks dropped on Monday after Microsoft withdrew its takeover bid for Yahoo and as commodity prices once again spiked. The Dow industrials lost 88 points, or 0.68%, the Nasdaq Composite fell 12 points, or 0.52%, and the S&P 500 lost 6 points, or 0.45%.
Without much economic news today, no doubt investors will have no choice but to focus on the high oil prices. After setting a record close Monday and hitting a new trading high of $120.93 a barrel Tuesday, crude retreated to $119.88, down 9 cents from Monday's close. It is interesting that just as hopes were growing the slowdown of the US economy may not be as deep and long as originally thought, crude prices surge again, concerning investors about inflation and profits once again.
Goldman Sachs upped Agco (NYSE:AG) to "buy" from "neutral" and downgraded CNH Global (NYSE:CNH) from "buy" to "neutral" according toMarketWatch.
UBS downgraded HSBC (NYSE:HBC) to "neutral" to "buy" according toBriefing.com. The news service also reports that Morgan Stanley downgraded Valero (NYSE:VLO) to "neutral" from "overweight".
Douglas A. McIntyre is an editor at 247wallst.com.
Before the bell: AIG, Citi pressure stock futures lower
The Wal-Mart Weekly: Examining shareholder resolutions, Part 2
Earnings expectations for JC Penney, Nordstrom, Macy's, Abercrombie and others
Comfort Zone Investing: Financial stocks: Is the worst over yet?
