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Pre-Market Primer: Stocks Turn Up Ahead of Apple Earnings, Home Prices


The Netherlands had a successful bond sale today, calming the markets ahead of key US economic announcements and Apple's closely-watched earnings release.

MINYANVILLE EXCLUSIVE: After dropping across the board yesterday, stock futures are looking positive ahead of key economic data releases. However, Europe's current debt crisis and upcoming political changes loom over investor sentiment. Dow (^DJI) futures are up 0.40% at 12,932.00. S&P 500 (SPY) futures rose 0.34% to 1,367.30 and Nasdaq (^IXIC) futures are up 0.21% to 2,655.75.

The S&P/Case-Shiller Home Price Index is expected to show a 0.1% monthly gain in prices in February, but home prices in the 20-city index probably fell 3.3% since last year. The index will be made available at 9:00 a.m. EDT. The rate of sales of new homes probably sped up slightly in March to an annual rate of 318,000 from 313,000 the month before. Consumer confidence in April probably fell slightly. New home sales and consumer confidence numbers will be published at 10:00 a.m.

Yesterday, the government of the Netherlands collapsed over disagreements in the ruling coalition. The far-right populist Freedom Party walked out of talks over implementing budget cuts to comply with the EU-mandated deficit targets. Since the Netherlands is a core European Union country, its failure to pass tough budget measures called on Europe's resolve to fix the debt crisis.

Despite that, the bond market expressed a vote of confidence in the Netherlands as the country successfully sold one billion euros worth of two-year bonds and 995 million euros of 25-year bonds today. The two-year yields actually fell slightly in this auction to an average of 0.5323%. Investors demanded a higher premium for 25-year debt, but at 2.782%, yields are under control. The Dutch might yet keep their coveted AAA debt rating.

In no-AAA-rating-anytime-soon Spain, borrowing costs are still spinning out of control. At an auction today, investors demanded double the yield for three- and six-month debt compared to the last auction a month ago. European equities indices rose somewhat today after yesterday's disastrous performance. French consumer sentiment crept up slightly this month.

Netflix (NFLX) plummeted over 15% in early-morning trading. In its earnings statement yesterday afternoon, the company predicted weaker-than-expected growth of 200,000 - 800,000 new US subscribers in the second quarter. This outlook puts the company's goal of adding seven million users this year into question. In the first quarter, Netflix beat expectations with an $0.08 per share loss, and revenue rose 28%.

Nokia (NOK) shares dropped 3.56% this morning after Fitch ratings cut the handset maker to BB+, or junk status, today.

Apple (AAPL) will report earnings this afternoon after the closing bell. The world's most valuable company is expected to continue its jaw-dropping revenue and income growth after it shipped nearly five million iPads in the last quarter. For a more in-depth earnings preview, check back at Minyanville for Today in Tech. Also check Buzz & Banter for Michael Comeau's pre-earnings report on Apple.

The Fed's policy meeting will take place today, but little is expected to come out of it. Policy rates are likely to stay unchanged. Ben Bernanke will be holding a press conference tomorrow afternoon.

Oil futures inched up 0.44% today to $103.56 ahead of the EIA's report on oil inventories. Crude inventories in the US are projected to have risen to an 11-month high last week.

Twitter: @vincent_trivett
No positions in stocks mentioned.
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