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Morning Brew: Stocks Advance in Pre-Open Trade

 January 06, 2009 10:19 AM
 


Good morning. The advance continues despite a lack of supporting good news. Call it hope or a lull in bad news, the near term bias appears to be higher. After-hours and pre-market activity tend to be good indicators (and often good trading opportunities) and the action there of late has been clearly positive. 

Why should anyone be surprised? despite the ugly and unfortunate continuation of pork spending even in these dire economic times, the fact remains that a record amount of economic stimulus has been and will be injected into our beleaguered economy. This will have a supporting and eventually growth stimulative effect. The markets will recover before the economy so don't wait for your neighbor get their job back before you buy back in. Now is the time. This morning's stats and commentary below.

[Related -Fusion-IO, Inc. (FIO): Can Fusion-IO Q2 Results Cheer Street?]

U.S. PRE-MARKET INDICATORS

-Dow Industrial futures up 65 points.

-S&P 500 futures up 9 points.

-Nasdaq futures up 6 points.

-Nasdaq-100 Pre-Market Indicator up 5.39 at 1267.91.

GLOBAL SENTIMENT


Nikkei up 0.4%.

Hang Seng down 0.4%

FTSE up 1.3%

PRE-MARKET SECTOR WATCH


(+) Large cap tech: mostly higher

(+) Chip stocks: higher

(-,+) Small cap stocks: mixed

(-,+) Drug stocks: mixed

(+) Software stocks: higher

(+,-) Internet stocks: mixed

(+) Financial stocks: higher

(+) Auto stocks: higher

(=,-) Airline stocks: flat to lower

(-,+) Retail stocks: mixed

UPSIDE MOVERS

(+) AAPL (+1.1%) is off pre-market highs but still firmer as analyst upgrade follows update on CEO Steve Jobs' health.

(+) DOW (+3.9%) says it'll pursue legal action over withdrawn Kuwait deal.

DOWNSIDE MOVERS


(-) LH (-4.5%) cuts 2009 guidance.

(-) NTAP (-1%) downgraded by RBC.

(-) LDK (-10.4%) continues sharp evening decline seen after reduced guidance.

(-) NOK (-0.9%) gets analyst downgrade.

(-) ICE (-2.6%) gets two analyst downgrades.

(-) MCRL (-9.7%) cuts Q4 guidance.

(-) LOGI (-5.3%) drops guidance, cutting jobs.

MARKET DIRECTION

Stock futures continue to point to a firmer open for the broad stock indexes after Wall Street took a break Monday from a New Year's bear-market rally.

November factory orders, the Institute of Supply Management's non-manufacturing index for December, and November pending home sales are all due for release at 10 a.m. ET. Fed meeting minutes will be released at 2 p.m. ET.

February crude oil topped $50 a barrel in electronic trading. Escalating gas disputes between Russia and Ukraine and continued deadly fighting in the Gaza Strip raised concerns for production and distribution and put upward pressure on prices.

Gold fell for a third session on a stronger dollar. The dollar and most major currencies gained on the euro after declining euro-zone inflation data were seen as a greenlight for more aggressive interest-rate cuts in the region.

Active-volume, news-driven movers this morning include:

Apple (AAPL), up about 1.5% after an upgrade in the wake of reassuring comments on CEO Steve Jobs' health.

LDK Solar (LDK), down 11%, said in Monday's extended hours that it expects Q4 revenue in the range of $425 to $435 mln and wafer shipments between 245 and 255 MW, below previous guidance of revenue in the range of $555 mln to $565 mln and wafer shipments in the range of 260 to 270 MW. The Street view is $541 mln in revenue. FY09 revenue is seen in a range of $2.3 to $2.5 bln, vs. Street expectations of $2.6 bln.

Dow Chemical (DOW), up 3.7%, says it will seek legal, operational and financial actions to enforce its rights under a failed joint-venture deal with Kuwait's Petrochemical. Dow Chemical said it has been approached by other potential business partners, and that it is determined to fulfill its transformational strategy pursued since 2009.

Shares of Rohm & Haas (ROH) had been under pressure as its acquisition by Dow Chemical looked by some to be in jeopardy without the Kuwait deal as a funding source. Dow had said access to other funding would keep its acquisition on track. ROH is trading just positive.

Post-bell earnings: RECN, ANGO, among others.

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