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Pre-Market: Best Buy Beats Expectations; Jobless Claims Rise Unexpectedly


Chinese and Japanese manufacturing strengthen.

Stock futures pointed toward a higher open on Thursday. Before the opening bell, Dow Jones (INDEXDJX:.DJI) futures rose 0.11% to 16,517. Futures on the S&P 500 (INDEXSP:.INX) were up 0.10% to 1,886.70. Nasdaq (INDEXNASDAQ:.IXIC) futures moved higher, rising 0.17% to 3,639.50.


Best Buy (NYSE:BBY) delivered first-quarter earnings far beyond analysts expectations, posting earnings of $0.33 per a share with $9.04 billion in sales. Estimates had been $0.20 per share on $9.21 billion in sales. However, Best Buy is projecting a weaker second and third quarter, believing sales will fall between negative and low single digits then as the consumer electronics retail industry continues to decline. Best Buy isn't the only retailer reporting earnings today. Be on the lookout for results from Dollar Tree (NASDAQ:DLTR), Ross Stores (NASDAQ:ROST), Gap (NYSE:GAP), and Hewlett-Packard (NYSE:HPQ). Shares of Best Buy were trading down 3.94% ahead the open.

Unilever (NYSE:UN) is selling its North American pasta sauce business, which includes the Ragu and Bertolli brands to Japan's Mizkan Group for $2.15 billion. Unilever is shifting its focus to higher-margin personal care products. Mizkan, a 210-year-old rice vinegar and condiment maker has been diversifying its business with acquisitions outside of the Japanese market. Ragu and Bertolli, which have an annual revenue of $600 million, will help Mizkan expand its international footprint. Unilever fell 0.73% in pre-market trading.

Tobacco kings Reynolds American (NYSE:RAI) and Lorillard Inc. (NYSE:LO) are reportedly in advanced talks over a merger that could involve another tobacco company, British American Tobacco (LON:BATS), backing the merger. British American Tobacco owns 42% of Reynolds. Together, Reynolds and Lorillard would have a combined market value of close to $55 billion. The news of a deal sent shares of both companies higher yesterday. This morning, Reynolds was down 0.49%. Lorillard fell 0.21%.

Chinese online retail giant Inc (NASDAQ:JD) will begin trading on the Nasdaq today after raising $1.78 billion in its initial public offering. The offering marks the biggest ever Chinese Internet company listing in New York, with 93.7 million shares selling for $19 apiece. precedes Alibaba, which filed to go public in the US this month.


Jobless claims increased unexpectedly by 28,000 to 326,000 last week. The total number of beneficiaries (people receiving jobless benefits) dropped 13,000 -- the lowest level since December 2007. The Chicago Fed National Activity Index showed a sharp decline in the economy in April, with the index falling to -0.32 verses 0.34 in March. At 9:45 a.m., the Markit PMI Manufacturing Index Flash will be released. At 10:00 a.m., existing home sales and leading indicators will arrive. The Kansas City Manufacturing Survey will be delivered at 11:00 a.m. At 4:30 p.m. the Fed will release both the money supply and its balance sheet.

Global Markets

Asian stock climbed overnight, with the regional MSCI Asia Pacific Index reaching its highest level in three months. Chinese manufacturing activity strengthened in May, but still remains in contraction. Japanese manufacturing activity gained as well in May from April, but activity is still shrinking at a reading of 49.9. In Europe, most stocks saw gains after Chinese manufacturing data beat estimates, and the Federal Reserve's FOMC minutes showed the inflation rate was expected to stay below its target. In the UK, consumer spending rose by 0.8% in the first quarter, the tenth straight increase the country has seen. In France, the recovery weakened as the manufacturing and services contracted.

Twitter: @brokawbrokaw
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