Before The Bell: Steel Signs Show Weakness; Solid Finish For UTX
Steel-maker POSCO prepares for tough road ahead. UTX is feeling strong. Futures are lower.
Reuters reports POSCO (PKX), the world's fourth-largest steel maker, began reducing monthly steel output by 20% earlier this month. A POSCO official said the company will continue to reduce output by approximately 130,000 tons possibly through early next year in response to slowing demand. In addition, the South Korean company will cut prices of steel products by 10%, effective December 17. Recently customers have delayed orders for stainless steel in anticipation of falling prices. Professor Guy Adami recently mentioned this steel play in Is it Time For Steel?
From the Bull Pen: Those bullish PKX may place sell-stops below $159.14. Bulls can also find a play in U.S. Steel (X); sell-stops below recent lows ($106)
From the Bear Cave: Steel bears may attempt a play in Arcelor Mittal (MT); buy-stops above the downtrend at $76.00.
Solid Finish For UTX
United Technologies (UTX) reaffirmed this morning FY2007 EPS of $4.22-4.25 versus analyst estimates of $4.26. FY2008 forecast was in the range of $4.65-4.85 vs. consensus estimates of $4.85. The company said "UTX will have a solid finish to 2007, and we continue to expect EPS growth of 14% for the year" as strength in aerospace and commercial construction offset the companies exposure to weakness in the U.S. residential markets. Chief Operating Officer Louis Chenevert said the company may also make approximately $2.3 bln in acquisitions, more than the $1.5 bln to $2 bln it usually targets. For more context on the economy, read Todd's The History Of The World.
From the Bull Pen: Professor Guy Adami said UTX is a stock that could persevere through difficult times. Those who agree and are taking a longer view, give the stock room to 71, or place near-term sell-stops below $75.32.
From the Bear Cave: Bears looking for a downside play in a conglomerate may see one in the "bearded financial" General Electric (GE). Buy-stops may be placed above the 50-DMA ($39.18)
Click on Minyanville's Stocks To Watch for more company-specific ideas.
Quick Check Around the World
Asian trading closed with the Hang Seng -.65%, Nikkei -.14%, Sensex -.37%, Taiwan -.85% and Shanghai actually up on the day, 1.24%%.
A quick look across the pond finds the CAC .04%, DAX -.28%, FTSE .2%, Swiss Mkt. -.03% and Stockholm -.23%.
A Look At Commodities
Crude oil is up this morning 0.15 to 92.40. Gold is lower -6.3 to 797.70. Silver is down -0.12 to 14.11, and copper is down -2.15 to 293.95.
As of 8:30 AM ET, S&P futures are down by -12.5 points, and Nasdaq futures are lower by -15.0 points.
On the Radar
8:30 CPI: 0.6% cons
8:30 Core CPI: 0.2% cons
9:15 Industrial Production: 0.1% cons
9:15 Capacity Utilization: 81.7% cons
Click here for the full trading radar.
TGIF! Have a great day!
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