Pre-Market Primer: Stocks Bounce Back Ahead of Busy Earnings Week, Spaniards Back Rajoy's Party

By Vincent Trivett  OCT 22, 2012 8:40 AM

And Japan is already feeling the heat from Chinese boycotts.

 


MINYANVILLE ORIGINAL After Friday brought the biggest broad sell-off of US equities since June, stocks are set to climb today as investors eye earnings results from key companies.

Future contracts on the Dow (INDEXDJX:.DJI) edged up 0.22% to 13,281.00.  S&P 500 (INDEXSP:.INX) futures gained 0.25% to 1,427.60, and Nasdaq (INDEXNASDAQ:.IXIC) futures gained 0.45% to 2,676.00. There will be no major economic announcements from the United States today.

Caterpillar (NYSE:CAT) beat the Street on earnings, but missed on revenue. The earth-mover company earned $2.54 per share on $16.45 billion in sales. The company lowered its outlook for the fiscal year 2012 to $66 billion in revenue and as little as $9 per share of earnings. Caterpillar is an economic bellwether company, and traders seem to have priced in expectations of weak sales. Shares are down just 1.14% in the pre-market.

After the bell this afternoon, Yahoo (NASDAQ:YHOO) will deliver its first earnings results with CEO Marissa Mayer at the helm. Yahoo is expected to book a profit of $0.26 per share on revenue of $1.08 billion, up from $0.23 per share a year ago. Analysts and investors will be looking for clues to Mayer's long-term plans to turn the struggling Web portal around. The company has gone through a bit of a management shake-up over the course of the quarter. Other notable tech companies including Apple (NASDAQ:AAPL) will report earnings this week as well. Apple is also scheduled to formally unveil a smaller version of the iPad tomorrow and Microsoft (NASDAQ:MSFT) will release Windows 8 later in the week.

Shares of Ancestry.com (NASDAQ:ACOM) jumped 8.02% after the company agreed to be bought by European private equity firm Permira for $32 per share, a 41% premium over Friday's closing price.

Japan's exports fell 10.3% in September, partly due to Chinese boycotts of Japanese products. Japan's claim over a few islands led to protests in which Chinese smashed Japanese cars, leading would-be buyers to think twice before buying a Toyota (NYSE:TM). The yen's strength and global economic weakness didn't help. Imports of oil and gas -- which became subject to an extra tariff on Oct. 1 -- pushed imports up 2.9%. Japan's trade deficit for the month was 547.9 billion yen.  

Germany's Finance Ministry said in its monthly report that industrial production and exports were stronger than expected, making it likely that GDP will show growth in the third quarter after slowing to just 0.3% expansion in the second. The ministry warns that a contraction is likely for the fourth quarter. The growth forecast for 2013 was also slashed to 1%.

Spanish Prime Minister Mariano Rajoy's party swept regional elections in Galicia, but Nationalists won seats in the Basque region. Still, Rajoy's People's Party is seeing the election as a vindication of the national austerity program. On Nov. 25, Catalonia, a region that accounts for 20% of Spain's economy, will hold a referendum on seeking independence from Madrid.

Twitter: @vincent_trivett
No positions in stocks mentioned.

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