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Pre-Market: General Motors Earnings Arrive Amid More Recalls; Unemployment Hits Eight-Year Low


Chinese manufacturing PMI hits 18-month high.

Stock futures pointed toward a higher open on Thursday. Before the opening bell, Dow Jones (INDEXDJX:.DJI) futures rose 0.11% to 17,044. Futures on the S&P 500 (INDEXSP:.INX) were up 0.15% to 1,983.80. Nasdaq (INDEXNASDAQ:.IXIC) futures moved higher, rising 0.30% to 3,987.50.  


General Motors (NYSE:GM) missed analyst estimates by a penny, reporting a second-quarter EPS of 58 cents on revenue of $39.6 billion. The company announced a $900 million charge for possible future recalls and said it expects to spend at least $400 million to pay victims of faulty ignition switch crashes. This comes after the Detroit-based automaker announced six new recalls yesterday, totalling 822,000 vehicles. That brings the total number of recalls issued by the company to 60 and the number of vehicles recalled worldwide to roughly 29 million. Meanwhile, data made available to the public yesterday revealed GM has provided federal safety regulators with new details on 19 fatal crashes that occurred with models that were recalled earlier this year. On the bright side, GM said sales in China improved over the second quarter. Shares of GM were down 2.81% in pre-market trading.

In other earnings news, Caterpillar (NYSE:CAT) reported higher-than-expected second-quarter results with net profit of $999 million, or $1.57 per share, and an updated outlook for 2014. Under Armour (NYSE:UA) posted a 35% jump in revenue overall, with footwear net revenue up 35% and accessories net revenue up 18%. Potash Corp (NYSE:POT) delivered significant declines in second quarter earnings and revenue but raised its full year outlook. Shares of Caterpillar fell 1.73% before the open. Under Armour rose 5.56%. Potash was up 2.27%.

EBay (NASDAQ:EBAY) is offering $3.5 billion in debt, which it says will help fund general operating activities and pay-down outstanding loans. This development, along with news that eBay is considering bringing $9 billion in cash held oversees to the US, has led some to question whether eBay is facing a cash crunch. CEO John Donahoe assured investors last week that neither the immediate need for cash nor a possible acquisition target was behind the the move. The bond sale will last through Monday. EBay rose 0.57% in pre-market trading.

The United States has sold its first ultra-light oil, popularly known as condensate, for the first time in at least four decades following the softening of a total ban on crude exports earlier this year. South Korea's GS Caltex and Japan's Cosmo Oil Co. (OTCMKTS:CMOOY) each purchased a cargo, which will be loaded in late July. While the size of the deals are insignificant, they have symbolic importance as the first US oil exports amid the country's shale oil boom. 


Initial jobless claims fell to 284,000 in the past week. Estimates had the number pegged at 307,000, which would have been higher than the revised 303,000 reported the week prior. The latest reading marks the lowest unemployment level since 2006. At 9:45 a.m., the Markit US PMI manufacturing index for July will be published, filling in the global manufacturing picture for the past month that has come together overnight. The Bloomberg Consumer Comfort Index will be reported alongside the US PMI. At 10:00 a.m., the Census will provide data on new home sales. The Energy Information Association will update the gas inventory at 10:30 a.m. At 11:00 a.m., the Kansas City Fed will release its manufacturing survey. At 4:30 p.m., the Fed will release its balance sheet and the money supply.

Global Markets

The HSBC/Markit China PMI hit an 18-month high in July, boosting confidence in the Chinese government's ability to reach its 7.5% economic growth target for 2014. The reading, which came in at 52 versus estimates of 51, helped propel Asian stocks higher for a fourth day, with the regional MSCI Asia Pacific Index pushing past a six-year high. The manufacturing PMI in Japan did not fare as well. Japan's PMI dropped to 50.8 in July, while the country's trade deficit expanded to $8.1 billion. In South Korea, GDP grew by 0.6%, weaker than analysts expected. European stocks rose as Markit's euro zone PMI rose to 54.0 in July from 52.8 a month earlier, its highest level and fastest rate of expansion since April. Hampering the mood, International Monetary Fund chief Christine Lagarde has suggested there will be a small cut in the IMF's global growth forecast. Meanwhile, EU diplomats will meet today to discuss wide-ranging sanctions on Russia for its actions in the Ukraine.

Twitter: @brokawbrokaw
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