Pre-Market: RBS Profits Climb 49%; US Payrolls Post Biggest Gain in Two Years

By Alex Brokaw  MAY 02, 2014 9:04 AM

General Motors recalls 50,000 SUVs.

 


Stock futures pointed toward a mixed open for the week's final trading session. Before the opening bell, Dow Jones (INDEXDJX:.DJI) futures were down 0.80% to 15,981. Futures on the S&P 500 (INDEXSP:.INX) were up 0.29% to 1,883.20. Nasdaq (INDEXNASDAQ:.IXIC) futures moved higher, too, rising 0.38% to 3,600.50.

Stocks

The Royal Bank of Scotland (NYSE:RBS) rallied on positive first-quarter results, in which the state-owned lender reported earnings of $2 billion versus $675 million a year earlier. Analysts had predicted net profits of $340 million. Reporting for Reuters UK, Matt Scuffham and Steve Slater expand on the gains: "The results, which come a day after fellow bailed-out bank Lloyds (NYSE:LYG) also reported improved earnings, reflect the impact of RBS's decision last November to create an internal 'bad bank,' designed to fence off its riskiest assets and leaving the rest of the bank in a better position to lend." Shares of RBS were up 8.76% in pre-market trading.

In other earnings news, CVS Caremark (NYSE:CVS) saw its profit rise 18% in the first quarter, driven by its specialty pharmacy business -- results did, however, come in under estimates. LinkedIn (NYSE:LNKD), on the other hand, beat expectations, although it still posted a quarterly loss of $13.4 million after its acquisition of the networking software Bright and a costly expansion into China. Australia's largest investment bank, Macquarie Group (ASX:MQG), reported a 49% rise in net income -- posting its largest full-year profit since 2008 -- sending shares to a six-year high. Ahead of the opening bell, shares of CVS were down 2.86%. Shares of LinkedIn fell 1.78%.

General Motors (NYSE:GM) will recall 50,000 luxury SRX 2013 SUVs to fix a computer error that can potentially delay acceleration by three to four seconds. GM has pinpointed the exact circumstances when the delay can occur and said the error can increase the risk of a crash. GM has recalled roughly 7 million vehicles since February, including 2.6 million because of ignition switch problems that led to 12 deaths. Shares of GM were trading up 0.57% before the open.

In acquisition news, Pfizer (NYSE:PFE) raised its cash bid for AstraZeneca (NYSE:AZN) to $106.5 billion after AstraZeneca said Pfizer's original $78.64 billion bid was too low. AstraZeneca has rejected Pfizer's second bid now, citing it's still too low. Meanwhile, Bayer AG (OTCMKTS:BAYRY) is reportedly in exclusive talks to buy Merck & Co's (NYSE:MRK) consumer health business for $14 billion. Shares of Pfizer fell 0.29% in pre-market trading. AstraZeneca was down 0.54%. Merck fell 0.20%.

Economy

The labor market showed significant improvement in April as nonfarm payrolls increased to 288,000 following a 203,000 gain in March. April's payroll gain marks the largest rise in two years. The unemployment rate fell to 6.3% from 6.7% last month, a sharp decline that beat consensus forecasts of 6.6%. Factory orders will arrive at 10:00 a.m. EDT.

Global Markets

Asian stocks moved higher overnight to a one-week high. Casino stocks led the gains. Wynn Macau Ltd. (OTCMKTS:WYNMF) rose 4.1% after its casino revenues in Macau beat expectations. In Japan, household spending hit a 39-year high in March -- a result of consumers trying to beat the April 1 sales tax hike. In Europe, stocks were little changed ahead of US jobs. Eurozone manufacturing grew, with April PMI clocking in at 53.4 from 53 a month prior. Unemployment, however, remained just off the record 12% rate it reached in December 2013. Energy chiefs from Russia, Ukraine, and the European Union met in Poland on Friday to discuss energy security. Meanwhile, pro-Russian rebels shot down two Ukrainian military helicopters in Eastern Ukraine overnight.
No positions in stocks mentioned.

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