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Pre-Market Primer: Stocks Ease From Highs; Microsoft Corporation Plunges on $900 Million Surface Write-Down

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Detroit filed the largest municipal bankruptcy America has ever seen.

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After major upsets in tech earnings, stock futures are heading down this morning.

Microsoft (NASDAQ:MSFT) surprised investors yesterday with one of the biggest earnings disappointments in its history as it took a write-down for the Surface. Microsoft earned $0.66 per share on $19.9 billion in revenue. Analysts had expected profit of $0.75 on $20.7 billion. The miss excludes one-time items including a $900 million write-down for the Surface tablet, which has met a cold reception from consumers and businesses. Recently, the company slashed the price of the Surface by nearly a third. Weak demand for PCs also hurt sales of Windows. Microsoft, a Dow (INDEXDJX:.DJI) component, fell 7.4% from its closing price yesterday.

Google (NASDAQ:GOOG) also came up sour. Second-quarter profit rose to $9.54 per share, up from $8.42 per share a year ago. Revenue rose to $11.1 billion from $9.61 billion. Wall Street had expected earnings of $10.80 and $11.37 in sales.

This morning, General Electric (NYSE:GE) reported that earnings rose 0.9% to $0.36 per share, just one cent over estimates. Revenue, however fell 3.5% to $35.12 billion. GE Capital was a weak spot in the conglomerate's business, where profit fell 9.4%. Shares rose 1.6% in pre-market trading.

Honeywell (NYSE:HON) reported that profit rose to $1.02 billion or $1.28 per share from $902 million in the same quarter last year, meeting expectations. The company could come under fire however, as a faulty Honeywell emergency beacon is being investigated as a possible cause for the fire aboard a Boeing (NYSE:BA) Dreamliner in London last week, Reuters reports.

After reaching all-time highs yesterday, US stock futures are slightly lower before the opening bell. Dow futures are down 0.08% to 15,469 while futures contracts on the S&P 500 (INDEXSP:.INX) inched up 0.02% to 1,681.00 and Nasdaq (INDEXNASDAQ:.IXIC) futures fell 0.05% to 3,046.00. The economic calendar is quiet today.

European and Asian markets were also lower overnight. The People's Bank of China said that it will remove some restrictions on lending rates for Chinese banks today.

The City of Detroit filed the largest municipal bankruptcy America has ever seen. Detroit has $20 billion in liabilities that it simply cannot meet with its current resources.

The Organization for Economic Cooperation and Development, the rich industrialized countries club, is developing a blueprint for going after global companies that exploit multiple countries' laws to legally avoid their tax obligations. Apple (NASDAQ:AAPL) and Starbucks (NASDAQ:SBUX) have recently been subject to dressing-downs by lawmakers in Europe and the United States. The OECD proposal calls for making it harder to book profits overseas in tax havens such as Ireland.

Moody's upgraded its outlook for US credit to stable from negative and reaffirmed its AAA rating, saying that the federal government is on track to fulfill the original 2011 debt ceiling agreements.

Twitter: @vincent_trivett
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