Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Pre-Market Primer: Super Mario to Europe's Rescue, Zynga Hobbles Facebook Shares


Mario Draghi is willing to do what it takes. If you won't buy Spain's bonds, he will. Probably.

MINYANVILLE ORIGINAL Global stocks rose today after European Central Bank President Mario Draghi made statements that seem to indicate that the central bank is willing to restart a bond-buying program or give the European Stability Mechanism a real banking license to act as a true lender of last resort.

"To the extent that the size of these sovereign premia hamper the functioning of the monetary policy transmission channel, they come within our mandate," Draghi said at the Global Investment Conference in London. "Within our mandate, the ECB is ready to do whatever it takes to preserve the euro. And believe me, it will be enough. There are short term challenges, to say the least."

Analysts are taking this to be more than the usual talk from Euro officials. The euro jumped 0.86% on the dollar to $1.2262 and Spain's 10-year bond yields fell more than 36 basis points from 7.425% to 7.012%.

European stocks also rallied with the FTSE (^FTSE) up 1.05% and the CAC 40 (FCHI) up nearly 3%. Hints that "Super Mario" is willing to take on high sovereign yields also sent US stock futures higher. Dow (^DJI) futures gained 0.98% to 12,761.00, S&P 500 (SPY) futures climbed 1.28% to 1,352.00, and Nasdaq (^IXIC) futures rose 1.40% to 2,579.00.

Initial claims for unemployment insurance fell to 353,000 last week from a revised 388,000 the week prior. This could be another symptom of seasonal adjustment error. Auto plants usually shut down temporarily in mid-summer, but this change is less pronounced this year. A separate report showed that durable goods orders rose 1.6% in June after a 1.1% gain in May. Excluding transportation, orders actually fell 1.1%.

In earnings news, Visa (V) shares rose after the payment processor reported better-than-expected earnings, adjusted for the $4.1 billion settlement with vendors.

Sprint (S) reported an unexpected $1.4 billion, or $0.46 per share loss for the second quarter this morning despite revenue rising 6% to $8.8 billion. Sprint is in the process of updating its network to Long Term Evolution, technology that AT&T (T) and Verizon (VZ) already offer.

Exxon Mobil (XOM) beat earnings expectations with $3.41 per share on $127.36 billion, up from $2.18 per share and $125.49 billion in the year-earlier period.

Facebook (FB) will report after the bell. Zynga (ZNGA), the online game company with very close ties to the social network, reported a disastrous second quarter yesterday. Zynga earned $0.01 per share on $332 million in sales, excluding one-time costs. Part of the blame goes to Facebook's tweaks to game content, but mobile gaming is also proving difficult for Zynga to monetize. Shares of Zynga dropped more than 40% and Facebook shares dropped 5.83%. Amazon (AMZN) and Starbucks (SBUX) will also report after the bell.

Twitter: @vincent_trivett
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
Featured Videos