Stock index futures pointed to a higher opening Friday on Wall Street, amid speculation that technology stocks would rise on Microsoft (NASDAQ: MSFT)'s strong earnings report late Thursday. Optimism was tempered on expectations that the monthly consumer confidence survey due Friday morning will show a declining economic outlook.
Yesterday, the Dow Jones Industrial Average lost just 3.33, ending a volatile trading session that saw the index swing as low as far as 100 points down. The Nasdaq Composite Index fared worse, falling 23.90, or 0.86%, to 2,750.86, while the S&P slipped 1.48 to 1,514.40.
The University of Michigan will release final consumer confidence figures for October at 10 this morning. The monthly survey is expected to show Americans more pessimistic about the nation's economic future.
Trucking group Arkansas Best Corp. (NASDAQ: ABFS) and industrial conglomerate Ingersoll-Rand (NYSE: IR) are among other companies reporting earnings Friday.
Abroad, stocks headed higher in Asia, with Japan's Nikkei and Hong Kong's Hang Seng indexes rising. Stocks were flat in early European trading.
Microsoft reported first-quarter earnings after the market close Thursday, posting a 23 percent rise that exceeding analysts' expectations. The software giant raised its forecasts for the year, citing sales of Windows Vista and its new Xbox 360 game Halo 3.
MOST NOTEWORTHY: Motorola (MOT), SanDisk (SNDK), Time Warner (TWX), Schering-Plough (SGP), GlaxoSmithKline (GSK) and Openwave Systems (OPWV) were some of today's noteworthy upgrades:
Deutsche Bank believes the worst is over for Motorola (NYSE: MOT) and expects an improvement in growth over the next several quarters, upgrading shares to Buy from Hold.
CIBC upgraded shares of SanDisk (NASDAQ: SNDK) to Sector Outperformer from Sector Performer following checks that indicate NAND supply is being allocated, visibility is improving, and SanDisk positioning is strengthening.
Pali Capital raised Time Warner (NYSE: TWX) shares to Buy from Neutral as they believe the "valuation has become too attractive to ignore."
CIBC upgraded Openwave Systems (NASDAQ: OPWV) to Sector Performer from Sector Underperformer believing the Street's expectations are now in line with expectations, limiting downside potential at these levels...
OTHER UPGRADES:
Merrill upgraded BT Group (NYSE: BT) to Buy from Sell.
JP Morgan assumed coverage of Arkansas Best (NASDAQ: ABFS) with a Neutral rating, up from an Underweight rating.
The markets saw a third day of selling today. While some may attribute it to the lower retail sales numbers, foreign interest rate worries or North Korean missile tests, I think it just may be the summer trading session. The market has been shooting up like crazy recently and it is time it takes a breather. Summer time has also been a historical rough time for the market as it makes very little in gains. Last summer is a good example of this. Just because the Dow dropped in the beginning of June last year doesn't mean it has to drop in the beginning of June this year; but it is food for thought.
The NYSE had volume of 2.5 billion shares with a paltry 279 shares advancing while 3058 declined for a loss of 174.07 points to close at 9,720.94. On the NASDAQ, 1.4 billion shares traded, 669 advanced and 2,372 declined for a loss of 45.8 to 2,541.38.
Most of the major long-haul trucking companies have reported quarterly earnings by now, and the news has been about as welcome as a state trooper with a ticket quota to meet. All trucking companies were affected by the same negative factors for the winter quarter:
1. Slowing economy, with particular weakness in the housing and auto sales sectors, resulting in weakening demand for the past eight months.
2. Excess capacity, though not necessarily excess drivers, as many companies bought new truck engines prior to the deadline for more fuel efficient (and expensive) and less polluting engines.
3. Soaring fuel costs, up 17 cents per gallon in March alone, with no end in sight for the next several quarters.
4. Wretched weather for days on end in many parts of the country.
Despite what might initially appear to be a uniformly negative scenario, the long-haul trucking sector is more fragmented than investors may realize, so results were NOT NEGATIVE across the board. In many cases, revenues were up, but then again, so were operating expenses. The degree to which senior management can control costs and utilize existing equipment effectively often made the difference.
MOST NOTEWORTHY: Whirlpool Corp (WHR), Amazon.com, Inc (AMZN), Arkansas Best Corp (ABFS) and Capital One Financial Corp (COF) were today's more noteworthy upgrades:
Citigroup upgraded Whirlpool Corp (NYSE: WHR) to Hold from Sell with a $107 target after better-than-expected Q1 results.
Amazon.com Inc (NASDAQ: AMZN) was upgraded to Market Perform from Underperform at Piper Jaffray, to Hold from Sell at Citigroup, to Neutral from Underperform at Cowen, to Sector Perform from Underperform at Pacific Crest and to Buy from Hold at BWS Financial.
Elsewhere, Stephens raised Arkansas Best Corp (NASDAQ: ABFS) to Equal Weight from Underweight with a $30 target.
MOST NOTEWORTHY: The trucking sector, PepsiCo (PEP) and Electronic Arts (ERTS) were the most notable upgrades today.
Wachovia upgraded the trucking sector to Market Weight from Underweight, as they believe the negative sentiment towards the group is starting to bottom, also noting that trucking stocks tend to rally before fundamentals fully bottom. Wachovia upgraded Con-Way Inc (NYSE: CNW) and Covenant Transport 'A' NASDAQ: CVTI) to Outperform from Market Perform, and Arkansas Best (NASDAQ: ABFS), Heartland Express Inc (NASDAQ: HTLD), Werner Enterprises (NASDAQ: WERN), US Xpress Enterprises 'A' (NASDAQ: XPRSA) to Market Perform from Underperform.
JP Morgan added PepsiCo (NYSE: PEP) to their Focus List, as the firm believes the recent pullback due to concerns over commodities costs and margins is overdone.
Janco upgraded Electronic Arts (NASDAQ: ERTS) to Buy from Hold with a $69 target, citing valuation.
OTHER UPGRADES:
Amgen Inc (NASDAQ: AMGN) was upgraded to Outperform from Peer Perform with a $77 target at Bear Stearns; the firm views Amgen's risk/reward as favorable as the most reasonable of CERA's launch scenarios, owned by Roche Holdings AG (OTC: RHHBY), are priced into valuation, and sees significant upside if CERA does not launch.
Caris upgraded LSI Logic (NYSE: LSI) to Buy from Above Average with a $12 target; they believe investors are underestimating the synergies involved with the Agere Systems (NYSE: AGR) deal. The broker sees upside to earnings estimates and raised their target of LSI Logic to $12 from $11.
Merrill Lynch upgraded shares of ImClone Systems (NASDAQ: IMCL) to Neutral from Sell, and sees a short-term trading opportunity due to the overly negative sentiment into the upcoming sales figures. The broker thinks Imclone could meet its Erbitux sales estimates despite weak prescription data.
Stock index futures pointed to a higher opening Friday on Wall Street, amid speculation that technology stocks would rise on Microsoft (NASDAQ: MSFT)'s strong earnings report late Thursday. Optimism was tempered on expectations that the monthly consumer confidence survey due Friday morning will show a declining economic outlook.
The markets saw a third day of selling today. While some may attribute it to the lower retail sales numbers, foreign interest rate worries or North Korean missile tests, I think it just may be the summer trading session. The market has been shooting up like crazy recently and it is time it takes a breather. Summer time has also been a historical rough time for the market as it makes very little in gains. Last summer is a good example of this. Just because the Dow dropped in the beginning of June last year doesn't mean it has to drop in the beginning of June this year; but it is food for thought.
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