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Futures Slip Ahead Of Earnings Season; Illumina (ILMN) Tumbles

 January 07, 2013 09:09 AM

(By Balachander) U.S. stock-index futures pointed to a modestly lower opening on the Wall Street as investors eye the fourth-quarter earnings-season starting tomorrow.

Mini Dow Industrial Average futures shed 20 points to 13,326. The Nasdaq futures fell 5.25 points to 2,707.75. Standard and Poor's 500 futures slipped 2.40 points to 1,455.30.

Aluminum producer Alcoa Inc. (AA) will report its financial results on Tuesday, thereby officially kick-starting the fourth-quarter earnings season.

New York-based Alcoa's results are eyed closely as it usually is the first Dow component to report earnings, and investors often watch AA's results to gauge how earnings may fare for other companies. Moreover, the results always impact the broader market, including index futures and ETFs.

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There are no major U.S. economic data due to be released on Monday.

On Friday, U.S. stocks ended modestly higher as better-than-expected reports on non-farm payrolls and services sector activity weighed on the sentiment. A report on U.S. non-farm payrolls showed 155,000 jobs were added in December and the jobless rate remained at 7.8 percent. The Institute of Supply Management (ISM) non-manufacturing Purchasing Managers' Index (PMI) rose to 56.1 in December from 54.7 in November.


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In corporate news, Alcoa (NYSE: AA) is expected to earn 6 cents a share on revenue of $5.61 billion for the fourth quarter, according to analysts polled by Thomson Reuters. In the year-ago quarter, the company reported a loss of 3 cents a share on revenue of $5.99 billion.

Amazon.com Inc. (NASDAQ: AMZN) rose 1.74 percent in premarket. Morgan Stanley upgraded rating on the shares to "overweight" from "equal weight".

Yahoo! Inc. (NASDAQ: YHOO) retreated 1.31 percent in premarket. Bernstein downgraded rating on the shares to "market perform" from "outperform".

Bank of America Corp. (NYSE: BAC) added 1.07 percent in premarket after the bank announced settlements with the Federal National Mortgage Association (Fannie Mae) to resolve agency mortgage repurchase claims on loans originated and sold directly to Fannie Mae through December 31, 2008.

Illumina Inc. (NASDAQ: ILMN) tumbled 8.88 percent in premarket amid reports that Swiss pharmaceutical group Roche does not intend to make a bid for the gene-sequencing company. 

Gilead Sciences Inc. (NASDAQ: GILD) advanced 1.41 percent in premarket. The company announced updates regarding its late-stage pipeline candidates for the treatment of chronic hepatitis C virus (HCV) infection.

Nationstar Mortgage Holdings Inc. (NYSE: NSM) shot up 18.57 percent in premarket after the company agreed to acquire roughly $215 billion in residential mortgage servicing rights from Bank of America for around $1.3 billion.

Sequenom Inc. (NASDAQ: SQNM) lost 7.07 percent in premarket. Illumina - Sequenom's instrument and reagents supplier - agreed to buy Verinata Health Inc., a provider for non-invasive test to detect fetal chromosomal abnormalities, for $350 million plus up to $100 million in milestone payments through 2015.

Geron Corp. (NASDAQ: GERN) may be in focus after the biopharmaceutical company agreed to sell its stem cell assets to a recently formed subsidiary of BioTime Inc. (NYSEAMEX: BTX).

Global Markets

European markets traded in red, with Germany's DAX down 0.54 percent to trade at 7,734.01. France's CAC40 dropped 0.64 percent to trade at 3,705.91. The U.K.'s FTSE 100 fell 0.41 percent higher to trade at 6,065.05.

Among Asian markets, China's Shanghai Stock Exchange Composite Index added 0.37 percent to close at 2,285.36. Japan's Nikkei 225 retreated 0.83 percent to finish at 10,599.01. Hong Kong's Hang Seng Index slid 0.01 percent to end at 23,329.75. India's BSE Sensex ended at 19,691.42, down 0.47 percent.

Commodity & Currency Scan

Ahead of the opening bell, crude oil futures lost 0.56 percent to $92.57 per barrel. Gold futures advanced 0.43 percent to $1,656 per ounce.

In the currency market, the euro fell 0.20 percent against the U.S. dollar to 1.3043, and the British pound dipped 0.04 percent to 1.6063. The dollar declined 0.23 percent against the Japanese yen to 87.9500.



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