By Anora Mahmudova and Barbara Kollmeyer, MarketWatch
PepsiCo shares rise on earnings beat, buyback, dividend news
NEW YORK (MarketWatch) -- U.S. stock futures were flat on
Wednesday as investors appeared more skittish than ever on
Wednesday, with few important economic reports ahead today and a
crucial meeting on Greece's future on hand.
The Federal budget will come later, while investors assess
another batch of earnings , including AOL Inc., which reported
better-than-expected earnings driven by strong advertising sales
and PepsiCo Inc., which beat Wall Street earnings, but cited
economic headwinds created by a strong U.S. dollar.
Futures for the Dow Jones Industrial Average (DJH5) slipped 26
points to 17,767, while those for the S&P 500 index (SPH5)
eased 1.3 points to 2,060.90. Futures for the Nasdaq-100 index
(NDH5) were up 2 points to 4,278.00.
Rumors that Greece could get a six-month extension to its
bailout program were quashed on Tuesday by German Finance Minister
Wolfgang Schäuble. Greece's current bailout plan expires on Feb.
28, and some fear it will run out of money before then.
Hulbert: U.S. stocks may take it in stride if Greece quits
euro
"Commentators generally seem to believe that the Greek stance in
the talks is unworkable, so that the risk of outright disaster is
still growing, but markets are priced for some kind of
stopgap-funding deal for Greece, which allows the ECB to continue
financing Greek banks and lets talks continue," said Kit Juckes, a
macro strategist at Société Générale, in a note.
Bottom line is earnings: Dan Greenhaus, chief strategist at BTIG
told clients in a note that "incredibly poor guidance" from the
S&P companies that have reported so far are keeping stocks from
progressing. "Almost all companies that are providing guidance are
guiding negatively, suggesting currencies are going to hit growth
by a few percentage points," he said.
Another factor for stocks is the recent, but sharp, reversal in
bond yields, coming as rate-hike forecasts have been dragged
forward. "As we've been saying for several quarters, equity-market
rallies almost always pause, and often decline, when yields back
up," said Greenhaus.
On the economic front, Moody's Investors Service said lower oil
prices won't be a boost for the global economy over the next two
years, due to headwinds from growth slowdowns in the eurozone,
China, Japan and Russia. However, the U.S. economy will benefit, it
said.
The Federal budget for January will be released at 2 p.m.
Eastern Time.
Stocks to watch: AOL(AOL) beat earnings expectations, but fell
short on revenue. Stocks were little changed ahead of the open.
Rite Aid's (RAD) stock rallies 4% in premarket trade after
quarterly results. The pharmacy chain said it has agreed to buy
TPG's EnvisionRx in deal valued at about $2 billion.
PepsiCo(PEP)(PEP) shares rose after the company beat earnings
expectations and announced share repurchases and dividend
increases.
Tesla Motors Inc.(TSLA) will report after the closing bell,
along with Baidu Inc. (BIDU) and Cisco Systems Inc.(CSCO).
Pier 1 Imports Inc. (PIR) plummeted 32%, after the company cut
its earnings-per-share outlook for fiscal 2015 on Tuesday
evening.
Shares of First Solar Inc.(FSLR) are up 3% in premarket, after
the company said late Tuesday that Apple has committed $848 million
in a power-purchase agreement.
And U.S-listed shares of ARM Holdings PLC(ARMHY) rose 3% in
premarket after the company posted upbeat results. The U.K.
microchip designer, which counts Apple among its customers, said it
sees revenue up 10% for the first quarter, which should reflect
strong sales of Apple's iPhone 6.
Also read: Today's Movers & Shakers
Other markets: European stocks failed to find a footing in early
trade, with Greek stocks off another 3.5% as the wait for news out
of the emergency meeting of European finance ministers continued.
The dollar was mostly flat across the board, and gold prices (GCH5)
were slightly higher. Crude-oil prices (CLH5) traded largely flat
ahead of supply data from the Energy Information Administration
Agency.
Gold prices inched higher, as investors seemed to put the brakes
on riskier assets. Gold for April delivery (GCJ5) added $5.3 to
$1,237.60 an ounce.
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