The Day Ahead: Futures Point Higher

 | Jan 06, 2012 | 8:26 AM EST  | Comments
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In the Headlines

NYSE and Nasdaq futures indicated moderate gains Friday, ahead of the eagerly anticipated December jobs report. After Thursday's ADP data showed a private-sector gain of 325,000 jobs last month, many analysts have become more optimistic about today's numbers.

In Europe, stocks were trading mostly higher early Friday. U.S. economic data will be released while bourses are open, and the results could affect trade overseas.

Italy's UniCredit bank continued to be a big decliner, with traders still worried about the steep discount on a new share offering. Italian regulators are reportedly looking into the stock's enormous selloff this week.

Meanwhile, the Italian 10-year, which has been in and out of global markets' focus lately, saw its yield rise back above the 7% level.

The euro fell to a 16-month low vs. the greenback. In recent sessions, the S&P 500 managed to show gains even as the euro fell, in contrast the trend in recent months.

In Asia, concerns about further debt problems in Europe trumped optimism about U.S. employment. Most indices sold off, although the battered Shanghai Composite notched a gain of 0.70%.

Economic Docket

Back home, the Labor Department releases its nonfarm payrolls data at 8:30 a.m. EST. Economists are eyeing 150,000 new jobs last month, although the unemployment rate is expected to edge up to 8.7% from 8.6%.

Commodities Corner

Oil prices rose Friday, despite some analysts believing that there is less risk of a big price increase due to Iran's threats. West Texas Intermediate Crude was up $0.50 before Wall Street's open, to $102.31 per barrel.

Gold climbed $4.80 per ounce in early Comex trade, to $1624.90.

Earnings News

Being Friday, the earnings calendar is fairly light. PriceSmart (PSMT), which operates discount warehouses in the Caribbean and Latin America, is expected to report first-quarter earnings of $0.58 per share before the bell. Sales are seen coming in at $472.51 million. Year-over-year earnings declined in the prior quarter, although if the company meets or beats views this time, it would mark a gain from the year-ago quarter.

Mid-cap oil-and-gas-industry gear maker Robbins & Myers (RBN), reports ahead of today's open. Analysts are eyeing earnings of $0.68 per share on revenue of $242.13 million. Shares have been consolidating below July's all-time high of $55.63. The stock has been getting support above its 10-week average.

DJIA component Alcoa (AA), which kicks off the "official" start to earnings season on Monday with its fourth-quarter report, said late Thursday that it would take a restructuring charge. The charge is related to plans for slashing capacity to boost the firm's competitiveness. Shares fell $0.24, or 2.6%, to $9.12 in the premarket.

An early gainer Friday was Jazz Pharmaceuticals (JAZZ), rising $1.54, or 3.7%, to $43. On Thursday, the maker of drugs to treat narcolepsy and anxiety disorders raised its full-year earnings and revenue views.

RF Micro Devices (RFMD) tumbled $1.07, 19%, to $4.57 ahead of the open. The company, which makes integrated circuits used in wireless gear, slashed third-quarter revenue guidance.  The company said orders from China had fallen.

Analyst Actions

Goldman Sachs upgraded Vodafone (VOD) to Buy from Neutral. The analyst said a sale of Verizon's (VZ) fixed-line business unit would enable the company to merge other units with Vodafone. Vodafone shares advanced $0.34, 1.22%, to $28.10 in the premarket.

Coinstar (CSTR), operator of Redbox DVD rental kiosks, was downgraded to Market Perform from Outperform at Morgan Keegan. Redbox's deal with Warner Bros., owned by Time Warner (TWX), expires at the end of this month. Analysts believe the studio will demand a longer delay than the current 28 days before Redbox can offer $1 rentals for new movies.

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