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Pre-Market: GE Posts Earnings In Line With Estimates; FedEx Faces Indictment Over Illegal Prescription Drug Shipments


Global stocks retreat on Malaysian Airlines plane crash and Israel's deployment of troops in Gaza.

Stock futures pointed toward a higher open for the week's final session. Before the opening bell, Dow Jones (INDEXDJX:.DJI) futures rose 0.05% to 16,950. Futures on the S&P 500 (INDEXSP:.INX) were up 0.12% to 1,956. Nasdaq (INDEXNASDAQ:.IXIC) futures moved higher, rising 0.28% to 3,886.75.  


General Electric (NYSE:GE) reported profits in line with estimates at $3.55 billion, or $0.35 per share, a 13% year-on-year increase. Gross revenue was $36.2 billion. The Fairfield, Connecticut-based company said orders were strong, especially in developing countries. GE also said it plans on spinning off its credit card business via an IPO later this month and selling 15% of that company, which it plans to call Synchrony Financial. The sales would raise $3.1 billion, GE says, which values Synchrony at $20.7 billion. In other earnings news, Honeywell International (NYSE:HON) said second quarter earnings rose 7.6% with the majority of its segments showing sales growth. Honeywell's earnings, which beat expectations, came in at $1.1 billion, or $1.38 per share, for the quarter, rising from $1.02 billion, or $1.28 per share, a year earlier.  Shares of GE were up 0.90% ahead of the opening bell. Honeywell remained unchanged.

Michael Millikin, General Motors' (NYSE:GM) general counsel, testified before Congress yesterday, where committee chair Senator Claire McCaskill (D-MO) blamed GM's legal department for a "stunning" failure related to ignition-switch failures. Millikin revealed that he had received notifications on four separate occasions that GM could face damages related to crashes, yet failed to alert GM's board and securities regulators. GM CEO Mary Barra defended Millikin, explaining the full extent of the problem was hidden from Millikin by his subordinates. In other auto-industry news, Toyota (NYSE:TM) is moving beyond electric-gasoline hybrid vehicles and will begin producing hydrogen fuel cell vehicles. Toyota says its fuel cell-powered cars will go on sale before April 2015. Shares of GM fell 0.19% in pre-market trading.

Twitter (NYSE:TWTR) has acquired San Francisco-based  payment start-up CardSpring, a platform that will allow people to redeem coupons and special deals through tweets. While the price of the deal remains undisclosed, the acquisition is the first major deal by Nathan Hubbard, the former president of Live Nation Entertainment (NYSE:LYV)-owned Ticketmaster who Twitter hired last year to build Twitter's e-commerce capabilities. Meanwhile, Facebook (NASDAQ:FB) is also making a move in the e-commerce space, with the test run of a button on its site that allows users to make purchases directly through advertisements. Shares of Twitter rose 0.30% ahead of the opening bell. Facebook was up 0.71%.

FedEx (NYSE:FDX) is facing US criminal charges for continuing to ship packages of illegal online pharmacies despite six warnings reaching back to 2004 from the Drug Enforcement Administration. FedEx, which reported second quarter revenues of $11.8 billion in June, has been given a 15-count indictment by a federal grand jury in San Francisco, which include charges for conspiracy to distribute controlled substances. The indictment claims FedEx gained $820 million from these illegal operations. The company says it is innocent and plans to plead "not guilty" to the charges. Shares of FedEx fell 0.92% ahead of the open.


Closing out the week's economic calendar, Reuters/University of Michigan will provide a sample of financial conditions and attitudes about the economy of 500 US households for the month of July when it releases its consumer sentiment report at 9:55 a.m. At 10:00 a.m., the Conference Board will publish its composite index of 10 leading economic indicators that are supposed to lead overall economic activity.

Global Markets

Asian stocks declined for the first time in five days overnight following the deployment of Israeli troops in Gaza and the suspect crash of a Malaysian Airline's civilian passenger plane on the Russia-Ukraine border. Shares of Malaysian Airline System Bhd. (KLSE:MAS) fell 8.9% in Kuala Lumpur. In China, Premier Li Keqiang said that growth slightly above or below 7.5% throughout the rest of the year would be acceptable as long as it facilitated new jobs and higher wages. Chinese real estate-developer stocks overcame negative housing data and rallied on Friday after investors took it as a sign Beijing would relax restrictions on the sector. In Japan, the Nikkei (INDEXNIKKEI:NI225) posted its biggest one-day drop in three weeks following the downing of the Malaysian Airlines jet. Japan's Topix index was also dragged down by Toyota, which fell 0.7% in Japanese trading. In Europe, the same concerns plaguing Asian markets dragged stocks lower, falling for a second consecutive day. A day after imposing further sanctions on Russia, President Obama warned his Russian counterpart Vladimir Putin that the US and its allies were prepared to enact further sanctions if Russia did not cease its actions in the Ukraine. In Russia, the country's top oil producer Rosneft (OTCMKTS:RNFTF) said it would continue to work on existing projects and honor obligations despite US sanctions.  

Twitter: @brokawbrokaw
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