Asia: Japan -1.2% to 20594. Hong Kong -1% to 25283. China +0.2% to 4026. India +1.2% to 28505.
Europe: London -1.1%. Paris -0.3%. Frankfurt -0.4%.
Futures: Dow -0.4%. S&P -0.4%. Nasdaq -1.1%. Crude -1.1% to $50.29. Gold -0.9% to $1093.70.
Ten-year Treasury Yield -1 bps to 2.33%
7:00 MBA Mortgage Applications
9:00 FHFA House Price Index
10:00 Existing Home Sales
10:30 EIA Petroleum Inventories
Key earnings before the open
ABT, ACAT, AN, ANGI, APH, ARMH, BA, BABY, BEAV, CHKP, CLI, EMC, EVR, IPG, ITW, JAKK, KNX, KO, LAD, MKTX, NOR, NTRS, NYCB, OC, PII, RDN, SEIC, SILC, SIX, SLGN, STJ, TEL, TMO, TUP, WHR
Key earnings after the close
AF, AFOP, AMP, AWH, AXP, BDN, BGS, CAKE, CCI, CLB, CRUS, CVA, CVTI, CYS, DFS, DLB, EFX, EGHT, FBHS, FFIV, FTK, FTNT, GGG, GLF, HNI, IBKC, IEX, INFN, LHO, LOGI, LVS, MKSI, MLNX, MOSY, MSA, NEM, OII, PLCM, PLXS, QCOM, QDEL, RJF, SCSS, SLG, SLM, SNDK, TCBI, TSCO, TXN, TYL, UCTT, URI, VMI, WFT, XLNX
Disappointment over U.S. corporate earnings pushed stocks lower at the open today, after a host of company results fell short of Wall Street’s expectations. Weak outlooks and guidance were seen at Apple (AAPL), IBM (IBM), Microsoft (MSFT), Yahoo (YHOO) and United Technologies (:UTX), while commodity producers deepened declines.
Commodities are also taking another beating, as anticipation of a Fed rate hike and the dollar’s strength, as well as soft global growth and a supply glut, weigh on demand for raw materials. Gold fell on Wednesday for a seventh session in eight, reflecting sustained downward pressure on the metal days after its steepest drop in almost two years. Crude futures are also heading south, amid speculation weekly supply data due later in the session will show U.S. inventories rose unexpectedly last week.
Greek Prime Minister Alexis Tsipras faces his second major test in a week in parliament today over reforms he wants lawmakers to adopt so talks can begin on an €86B rescue deal. The government hopes negotiations can then start this week and be wrapped up by Aug. 20, but with divisions within Syriza, snap elections are likely to happen in the fall. Offering some encouragement, Standard and Poor’s lifted its long-term sovereign credit rating on Greece yesterday to CCC+ from CCC-, saying it believed default was no longer inevitable in the next six to 12 months.
As of today, Wall Street will have to comply with the “Volcker rule,” which bans taxpayer-insured banks from making bets with their own money. Although major financial institutions have fought for years to change the rule, they have for the most part fallen in line – shedding their proprietary-trading desks, pulling money from certain investment funds and ceasing other speculative activities. The new rule has also changed much of the industry. The five largest U.S. investment banks cut staff on bond sales and trading desks by 18% from 2011 to 2014, while 1,428 new hedge funds were launched during the same period.
After being under review for months, FCC Chairman Tom Wheeler has circulated an order to agency commissioners recommending approval of AT&T’s (T) $49B purchase of DirecTV (DTV), with conditions. The merger would combine the country’s No. 2 wireless carrier with the largest satellite-TV provider. FCC’s four other commissioners would need to vote in coming days to formally approve the deal.
The chief executive of ARM, the chipmaker which saw a spike in its share price this year around Apple (AAPL) takeover rumors, has told CNBC that remaining independent is the “right thing” for his company. “There are rumors all the time about us being acquired. But when you look at our business model…it’s much less expensive for them to license our technology than to buy the whole company,” said Simon Segars. The announcement came as ARM (ARMH) reported Q2 results. Profits came in at £124M ($193M), up 31% Y/Y, but slightly below market expectations of £126M.
Pet food maker Blue Buffalo Pet Products has priced its initial public offering of common stock at $20 per share, valuing the company at about $3.92B. The offering raised about $676.6M after being priced above the expected range of $16-$18 per share. The company is expected to list under the symbol “BUFF” on the Nasdaq today.
The bankruptcy drama at Caesars Entertainment will come to a head today, after a U.S. judge in Chicago rules whether the casino empire is shielded from a storm of litigation. Caesars (CZR) put its largest unit in chapter 11 protection in January, rather than the whole company, preserving many investments of shareholders. Creditors argue that Caesars didn’t act fairly ahead of the filing, since it transferred assets out of their reach, and stripped them of certain protections.
Boosted by a recent stock surge, Facebook’s (FB) market capitalization has overtaken that of General Electric (NYSE:GE). The social network’s 26% climb this year has brought its market value to $275B, compared to GE’s $273B. Some are expressing concerns: GE racked up $149B in sales last year and employed more than 300,000 people. Facebook reported $12.5B in sales and employed roughly 9,200.
FedEx has signed a deal to buy 50 Boeing (BA) 767 jet freighters, allowing the aircraft maker to extend its production line well into the next decade. The deal, the biggest order ever for the plane, includes options for another 50 767Fs and is worth $10B at list prices. FedEx (FDX) says its total capital spending for FY 2016 remains at $4.6B, and the impact to 2017 capital spending from the new order is immaterial.
U.S. authorities have charged five people in the first cases bearing some link to last year’s massive cyber attack on JPMorgan (JPM), which exposed the contact information of 83M accounts. The men were accused of crimes ranging from securities fraud to money laundering – not with anything directly related to the attack on the bank – but officials confirmed there was a link. Four of the men were arrested in Florida and Israel, while a fifth remains at large.
According to an internal memo, McDonald’s (MCD) might start offering all-day breakfast nationwide as soon as October after a test run went smoothly. Analysts think the switch by McDonald’s to an all-day breakfast platform is a potential sales driver, although there’s been some trepidation over operational challenges. The measure still needs to be approved by franchisee committees before going to a broad franchisee vote.
Sony is starting a drone subsidiary to serve business customers, leaping into a frontier already crowded with upstarts and technology giants. “We’re looking to explore new opportunities beyond our core consumer portfolio in enterprise markets,” said Hiroki Totoki, head of Sony’s (SNE) smartphone unit, which is providing resources for the new endeavor. The new business – which is called Aerosense – is a joint-venture with Japanese robotics and automation company ZMP.
Just hours after it announced plans for the divestiture, Toshiba (TOSYY) completed the sale of a 4.6% stake in Finnish elevator maker Kone Oyj (KNYJY) for €864.7M ($945.6M). The company had been unable to close its books over the past year due to accounting irregularities, which prompted its chief executive and a string of other senior officials to resign yesterday.
Zillow’s board has approved the creation of Class C shares that carry no voting rights. On Aug. 14, Zillow (Z) will distribute two Class C shares for each Class A and Class B share owned by shareholders (co-founders Rich Barton and Lloyd Frink are the sole holders of Class B, which carry 10x the voting rights of Class A). Following the distribution, Class C shares will trade under the symbol Z, and Class A shares under the symbol ZG. Zillow fell 2.2% in after-hours trading.