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Pre-Market: Alibaba's IPO Is Good News for Yahoo; US Productivity Falls

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Janet Yellen delivers a speech before Congress.

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Stock futures pointed toward a higher open on Wednesday morning. Before the opening bell, Dow Jones (INDEXDJX:.DJI) futures rose 0.39% to 16,424. Futures on the S&P 500 (INDEXSP:.INX) were up 0.33% to 1,870. Nasdaq (INDEXNASDAQ:.IXIC) futures moved higher, rising 0.39% to 3,564.75.

Stocks

In its initial public offering filed yesterday, Chinese e-commerce giant Alibaba said it plans to raise $1 billion when it goes public later this year. That amount could be much higher when shares price later this year, and Alibaba's IPO is widely expected to surpass Facebook's (NASDAQ:FB) 2012 initial public offering, which raised $16.9 billion. Alibaba's public offering is set to be a boon for Yahoo (NASDAQ:YHOO), which is planning to sell 40% of its stake in Alibaba. That gives Yahoo the potential to generate somewhere around $10 billion (depending on where Alibaba prices), more than doubling Yahoo's cash reserves. With that kind of money lying around, Yahoo has a chance to level the playing field between itself and competitors such as Google (NASDAQ:GOOG) and Facebook. Shares of Yahoo were down 0.03% in pre-market trading.

Earnings came in hot and heavy overnight. HSBC (NYSE:HSBC) reported a 20% drop in profits in the first quarter, despite winning market share in several areas, including equity and debt capital markets and advisory. The Walt Disney Company (NYSE:DIS) delivered double-digit revenue growth driven by a 35% increase in its studio division. After the closing bell, Twenty-First Century Fox (NASDAQ:FOX) will report its third fiscal quarter earnings, with the company's cautious attitude toward its television and film division igniting investor concern. Shares of HSBC were down 0.68% in pre-market trading. Disney was trading up 0.96%.

Sears Holdings (NASDAQ:SHLD) will reportedly announce an unspecified number of store closings as part of an ongoing effort to mitigate losses. Sears plans to lease out the space to other stores as opposed to selling the real estate. The news follows Office Depot's (NYSE:ODP) announcement that it will shutter 400 stores, which sent shares of the office supply retailer up 15%. Shares of Sears were down 0.20% in pre-market trading.

Japan's two biggest car makers, Toyota (NYSE:TM) and Nissan (OTCMKTS:NSANY), both saw double-digit sales growth in April. The companies reported 12% and 15% growth, respectively, with sales in China driving growth -- both companies have designed vehicles especially for that market. Honda (NYSE:HMC) reports sales later this week. Nissan was trading up 0.03% ahead of the opening bell.

Economy

Federal Reserve Chairperson Janet Yellen will begin a two-day testimony before Congress, speaking before the Joint Economic Committee at 10:00 a.m. EDT. Before that, investors can chew on the 9% rise in mortgage applications, which saw purchase applications rising to 51% over refinancing applications at 49% for the first time since 2009. The productivity of workers declined by 1.7% in the first quarter due in part to cold weather, following a 2.3% rise in the previous quarter. The Gallup weekly job creation index ticked up to 26 from 25 a week earlier. At 10:30 a.m., the EIA petroleum inventories are released. The global composite purchasing managers index and the global composite services purchasing managers index will be released at 11:00 a.m. The results of the $24 billion 10-year note auction arrive at 1:00 p.m. Consumer credit will be released at 3:00 p.m.

Global Markets

Asian stocks declined the most in seven weeks after Japanese technology shares dropped. Standard and Poor's has warned of the risks to the finances of regional borrowers in China as the country's budget moves into deficit. Gold consumption rose in China in the first quarter. In Europe, stocks fell for a fourth day. Germany factory orders saw an unexpected drop of 2.8% in March, signaling uncertainty for Europe's largest economy. US Secretary of State John Kerry has warned it will increase sanctions against Russia if it attempts to sabotage presidential elections in Ukraine.

Twitter: @brokawbrokaw
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