In corporate news, Supervalu (SVU) plunged, losing nearly half of its value, after suspending its divident and withdrawing financial projections for the year for pricing pressure. Supervalu reported worse than expected quarterly results and is considering selling part o its heavy debt.
Marriott International (MAR) dropped -6.44% after warning of weakenign expansion overseas. In Europe, the Stoxx Europe lost -1.1% despite an increase in May industrial production in the euro zone. The Hang Seng fell -2% and the euro fell versus the dollar.
It looks to me like the markets are in a downward trend with the occasional short cover to wipe out anyone with a modest stop. I am active in the S&P 500 futures and EUR/USD futures markets and have found that my short entries after a strong short-term short cover perform the best.
S&P 500 futures fell 8.50 points to 1328.00, NASDAQ futures fell 25.00 points to 2536.50, and Dow Jones Industrial Average futures fell 33 points to 12503.00.
Corn had another strong rally, gaining 21.5 cents and rising to $7.2540 a bushel.
Gold futures fell $8.90 to 1566.80 and WTI crude futures fell 69 cents to $85.62.
Infosys Ltd ADR fell over 10% after weak guidance on the global economic slowdown. In my opinion this earnings season has been full of weak guidance forecasts due Europe and China’s slowdown.
Netflix Inc. (NFLX) posted yet another gain of 1.42% on another trivia bit from the CEO claiming that more than 1 billion hours of streaming video service were watched in June.
Groupon Inc. is currently up just under a percent on the day, however it reached a new low of $7.34. Maybe there is a bargain in this coupon stock?
Along with oil’s fade, Marathon Petroleum Corp. fell 2.73%.
David Cornes holds a degree in economics from the University of Montana.
Before the opening bell, India’s second largest software company posted 5% revenue growth guidance number based on customers’ budgets, as opposed to 8-10% estimated in April. The Bangalore based It company reported sales of 9,616 Indian Rupees and a 33% rise in net profit for Q1 ending June 30. Net income increased to $412 million. INFY estimates $7.34 billion in revenue for the 2012 fiscal year.
Infosys, along with other IT companies is battling a lack of demand from businesses as they are less likely to spend more on IT as the global economy is in an economic slump. Gartner Inc., an IT researcher reported that Global IT spending is slowing due to weak Chinese, European and U.S. economies.
Want Want China dropped 3%, for a third straight day of losses after hitting an all-time intra-day high on Monday. China Construction Bank dropped 3.7% due to bad debt worries.
The FTSEurofirst is currently down .4% taking hints from Asia and the US. Technology shares are hardest hit today dropping 1.7% due to weak forecasts from chipmakers Applied Materials and Advanced Micro Devices. Nike is up in pre-trade as it outpaces competition in China showing consumers prefer foreign brand to local competitors. Callaway Golf is also down in pre-trade after announcing plans to cut 12% of its workforce and expected losses of $.55-.75 per share.
Commodities are beginning grimly today with crude, natural gas, gold and oil all showing losses.
Contributer Chris Rygh is currently pursuing his MBA in Wisconsin and has a passion for the Market. Comments can be directed to ryghcw19@uww.edu
Purchase applications were announced this morning and this week the report shows and increase of 3% while the refinance applications are down 3%. At 8:30am the International Trade report will be announced. April brought a decline in the trade gap but only because of a drop in imports. At 10am the wholesale inventory consensus will be announced. In April the inventories rose 0.6% but not enough to match the increase in sales of 1.1%.
At the close yesterday the S&P 500 was still down at 0.81% decline. There is hope for today though due to the stock index futures advance, according to Reuters. As for 10-year treasuries and oil they both closed on an increase of 0.35% and 1.19% respectively. The dollar on the other hand was down 0.19% at the close.
As for the earnings season today should be a positive day with 9 out of the 15 announcements projected to be positive. The big announcement to watch out for today is Marriott, the company is estimated to increase EPS by 13.52%.
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Markets were stagnant for the majority of the day but moved sharply lower after the release of the Fed’s June meeting minutes. The Fed’s minutes showed the committte split over the merits of further monetary easing on the economy. Results have shown that QE2, and potentially QE3, could have little effect on the economy, and much less effect that intended.
Leading the equity declines were Boeing, United Technologies, Microsoft, and Travelers. On the other hand, Chevron and Exxon Mobil were the biggest Dow performers. In global markets, Europe finished roughly flat on the day with Spain tacking on gains following more austerity measures in an effort to meet budget targets.
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