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Pre-Market Primer: Apple Inc., Ford Motor Company Beat Expectations; Eurozone Might Escape Recession

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Caterpillar and China didn't do as well.

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Stocks rose this morning as PMI surveys pointed to Europe's recession ending soon and key companies reported strong earnings.

PMI numbers from across Europe lifted markets early this morning, raising hopes that the end of the eurozone recession is within sight. July manufacturing and services numbers mostly came ahead of expectations. Here are the some highlights from Markit:
  • Germany: The overall private sector rose to 52.8, up from 50.4 in June. Manufacturing hit 50.3 and services jumped 2.1 points to 52.5. (Numbers above 50 indicate expansion.)
  • France: Private sector PMI rose to 48.8 from 47.4, the slowest rate of deterioration in 17 months. Manufacturing rose to 1.4 points to 49.8 and services rose a point to 48.2. This echoes finance minister Pierre Moscovici, who said recently that France probably already came out of recession.
  • Composite Eurozone PMI rose to 50.4 from 48.7, an 18-month high. Manufacturing hit a two-year high of 50.1 and services rose to 49.6.
China sent the opposite signal, however. HSBC's manufacturing flash PMI fell to an 11-month low of 47.7, an even deeper contraction than June.

In corporate news, Caterpillar (NYSE:CAT), a global economic bellwether, missed per-share earnings estimates by $0.26. It earned $1.45 per share over the second quarter on $14.6 billion in sales. Analysts forecast $15.03 billion in revenue.

Ford (NYSE:F) beat Wall Street's expectations and raised its forecast for the full year. The company earned $0.30 per share, matching the year-before period. It had strong sales in North America, where pickup truck sales increased 22%, but it lost $348 million in Europe. Based on its second quarter performance, Ford projects full-year profit to match last year's $8 billion. Shares are up 3% in pre-market trading.

Apple (NASDAQ:AAPL) shares are up 4.71% to $438.98 after reporting better-than-expected earnings yesterday. Apple sold 31.2 million iPhones in its third fiscal quarter, up from 26 million a year ago. Earnings per share came in at $7.47 as revenue rose 1% to $35.3 billion. One concern that CEO Tim Cook brought up in the call was a downturn in sales in China. "We saw some dramatic downturn there. It's not totally clear exactly why that occurred," Cook said.

Given its large weight in major indices, Apple's rise helped drive up stock futures. Before the opening bell, Dow (INDEXDJX:.DJI) futures were up 0.23% at 15,548. Futures contracts on the S&P 500 (INDEXSP:.INX) rose 0.37% to 1,694.50 and Nasdaq (INDEXNASDAQ:.IXIC) futures climbed 0.98% to 3,055.75.

Later this morning, Markit will release its US manufacturing flash PMI reading. It is expected to rise 0.6 points to 52.8. New home sales data is also due out at 10 a.m. Economists estimate that new homes sold at an annual rate of 481,000 in June, up from 476,000 in May.

After the bell today, Facebook (NASDAQ:FB), Visa (NYSE:V), and Zynga (NASDAQ:ZNGA) are among the companies reporting earnings.

Twitter: @vincent_trivett
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No positions in stocks mentioned.
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