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Pre-Market: Yahoo Shares Boosted Ahead of Alibaba IPO; Chinese Economic Growth Slows


Earnings season is in full swing.

Stock futures pointed toward a higher open on Wednesday as earnings season kicked into full swing. Before the opening bell, Dow Jones (INDEXDJX:.DJI) futures rose 0.44% to 16,277. Futures on the S&P 500 (INDEXSP:.INX) were up 0.45% to 1,847.90. Nasdaq (INDEXNASDAQ:.IXIC) futures moved higher, rising 0.49% to 3,508.50.


Chinese e-commerce giant Alibaba is expected to file its US initial public offering as early as next Monday. The news helped buoy shares of Yahoo (NASDAQ:YHOO), which owns a 24% stake in Alibaba. Investors weren't fazed by the weak quarterly revenue growth Yahoo posted yesterday, instead focusing on strong results from Alibaba, which posted its fifth straight quarterly profit gain. Shares of Yahoo were up nearly 8% in pre-market trading.

Reuters' Edwin Chan gives some background on Alibaba's IPO, which is expected to be the largest IPO since Facebook (NASDAQ:FB) went public in 2012:

The company which powers four-fifths of all Chinese online consumer shopping recorded a 66% surge in sales to $3.06 billion in 2013's final three months compared with a year earlier...

The listing is the most highly anticipated of what's expected to be a record year for US tech debuts, spurred on by social media company Twitter Inc's (NYSE:TWTR) successful 2013 IPO.

Credit Suisse (NYSE:CS) reported a 34% decline in first-quarter profits, falling far below analyst estimates, as the Swiss bank overhauled parts of its business. Shares fell 3.09% before the open.

Bank of America (NYSE:BAC) recorded a $276 million in losses in Q1, thanks to $6 billion of costs related to mortgage disputes. This is compared to a $1.48 billion profit taken in a year earlier. Shares of Bank of America were down 0.79% in pre-market trading.

Google (NASDAQ:GOOG), IBM (NYSE:IBM), and American Express (NYSE:AMEX) are among the companies reporting earnings after today's close. Analysts see Google's and American Express's first-quarter revenues climbing, while IBM's revenue is expected to fall. Shares of Google were up 1.15% in pre-market trading. American Express ticked up 0.50%. IBM rose by 0.39%.

The Economy

Janet Yellen will speak at 12:15 p.m today at the Economic Club of New York a day after she said the Fed is considering tougher rules on big banks. The Mortgage Bankers Association reported applications for mortgages rose 4.3% last week as interest rates declined. Housing starts dropped by 2.4% in March. At 9:15 a.m., the Federal Reserve will release its monthly index of industrial production. The Atlanta Fed delivers its Business Inflation Expectations survey, which gives a monthly measure of inflation expectations, at 10:00 a.m. The EIA petroleum inventories will be released at 10:30 a.m. Later in the afternoon, Dallas Fed president Richard Fisher will give a speech on his economic outlook at 1:25 p.m. At 2:00 p.m. the Fed will release its Beige Book.

Global Markets

Asian stocks rose overnight, their first positive session in four days as telecom stocks rallied. China's economic growth slowed to its weakest rate in six quarters, growing by 7.4% in Q1, versus 7.7% last quarter. Chinese property investment took a severe plunge, falling to its lowest level since 2009, indicating that credit is tight and demand is low. Meanwhile, China pledged it will move forward on currency reform.

In Europe, stocks moved higher on positive earnings from a number of companies including Tesco (NASDAQ:TESCO) and Syngenta (NYSE:SYT). Euro-area inflation clocked in at 0.5% in March, versus 1.7% a year ago, putting pressure on the European Central Bank to take measures to avoid deflation. In England, unemployment dropped unexpectedly while wages grew. The situation remains tense in Ukraine; Ukrainian troops took control of an airfield, which prompted Russian President Vladimir Putin to describe the country as being on the brink of civil war.
No positions in stocks mentioned.
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