The Day Ahead: Open Looks Mixed

 | Jan 20, 2012 | 8:30 AM EST  | Comments
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In the Headlines

NYSE futures pointed lower Friday, following a revenue miss by DJIA component General Electric (GE). Nasdaq stocks, however, appeared poised for a higher open following mixed news from big techs late Thursday.

Google (GOOG) was a big loser ahead of the bell after missing its fourth-quarter views on lower ad rates.

In European trade, decliners outpaced advancers, as stocks took a breather after gains earlier in the week. Markets continue to await news from Greece about a deal with its creditors, but bond yields headed lower in the region, reflecting optimism about the outcome.

Asian stocks closed higher ahead of some market holidays in the region next week because of the Chinese New Year. HSBC's (HSBC) survey of purchasing managers, released Friday, showed activity in China contracting at a slower rate than anticipated, giving traders some cheer.

Economic Docket

Today's economic calendar is fairly empty. A high-profile report on December existing home sales is due out from the National Association of Realtors at 10 a.m. EST. Economists are eyeing sales of 4.6 million units, up from November's level of 4.42 million. 

Commodities Corner

Crude oil fell $0.75 in early trade, hovering below the $100 line, at $99.64 per barrel. Gold slipped $7.20 per ounce, to $1,647.30.

Earnings

Friday's earnings news included a fourth-quarter earnings beat from blue chip GE. Income was $0.39 a share, a penny ahead of views. Revenue disappointed, coming in at $38 billion, a shortfall of approximately $2 billion. The company said European business was slowing and the U.S. appliance market remained challenging. Its GE Capital unit is still not paying a dividend, defying expectations of many analysts. GE skidded $0.66, or 3.5%, to $18.49 early Friday.

Also reporting before today's open was oil-and-gas services company Schlumberger (SLB), which said quarterly profit was $1.11 per share, topping views of $1.09. Revenue came in at $10.97 billion, beating expectations of $10.88 billion. Schlumberger shares rose $0.24 in premarket trade to $73.10.

Early Movers

A fourth-quarter earnings miss late Thursday from Google sent shares tumbling $50.73, or 7.9%, to $588.84 in the premarket. The company said the online ad market has weakened, as many keyword searches did not fetch the same rates as in the past. Analysts say competition from Facebook ads and a growing number of searches from mobile devices, rather than PCs, are among factors the company is grappling with.

DJIA component IBM (IBM) was a big gainer ahead of the bell, following a better-than-expected report Thursday. The stock was up $3.88, or 2.2%, to $184.40 in the premarket. The company said quarterly results were strong in its services and software business units.

Microsoft (MSFT) advanced $0.60, 2.1%, to $28.72 in early trade after beating fourth-quarter expectations.

Still another DJIA tech name, Intel (INTC), also got a post-earnings bounce Friday morning. The stock was up $0.20 to $25.83 ahead of the bell.

Analyst Actions

Kaufman Bros. downgraded Intel to Hold from Buy, citing margin pressures, valuation and aggressive sales guidance.

Other analyst moves Friday included Northland Securities' initiation on several sporting goods retailers. Dick's Sporting Goods (DKS), Foot Locker (FL), Hibbett Sports (HIBB) and Cabela's (CAB) all received a rating of Market Perform.

Finish Line (FINL) got the gold star, earning a rating of Outperform.

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