Reuters: US STOCKS – Futures point to weak open after JPMorgan, data
Fri Jan 14, 2011 9:16am EST
* JPMorgan Q4 profit tops view, stock dips
* December retail sales rise less than expected
* Intel gains after results, sees strong revenues
* Futures off: Dow 39 pts, S&P 3.7 pts, Nasdaq 1.75 pts
* For up-to-the-minute market news see [STXNEWS/US] (Updates with data)
By Ryan Vlastelica
NEW YORK, Jan 14 (Reuters) – U.S. stock index futures pointed to a lower open on Friday after weak retail sales and a mixed reaction to JPMorgan Chase & Co’s quarterly earnings.
JPMorgan (JPM.N) reported a fourth-quarter profit that was stronger than expected, though it hasn’t shaken off the residual costs of the financial crisis. For details, see [ID:nN14293086] Shares of JPMorgan edged 0.4 percent lower to $44.27 in premarket trading. The stock has risen more than 4 percent since the start of January.
“While JPMorgan beat earnings and did fairly well there, when you dive into the numbers a lot of that is from (lower) loan-loss reserves,” said Tyler Vernon, chief investment officer at Biltmore Capital Advisors in Princeton, New Jersey. Vernon said he He was “a little disappointed that we didn’t see earnings coming from other areas of the company.”
The expectations for strong corporate earnings have lifted equities in recent weeks, with the S&P 500 hovering near a 28-month high and on track for a seventh week of gains.
Sales at U.S. retailers rose slightly less than expected in December, but sales for all of 2010 reversed two years of contraction, posting the biggest gain in more than a decade, the government said. [ID:nN1350517] “We thought we’d have a robust holiday season. This data is a reminder that the jobs situation is still an issue and that there are still problems in the economy,” Vernon said.
Intel Corp (INTC.O), a Dow component, rose 0.5 percent to $21.39 a day after it posted a better-than-expected quarterly profit and forecast strong revenue for the coming quarter. [ID:nN13239448] S&P 500 futures SPc1 fell 3.7 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures DJc1 fell 39 points, and Nasdaq 100 futures NDc1 lost 1.75 points.
China raised bank reserve requirements, offering more evidence its central bank was preparing to allow economic growth to slow as it battles inflation. The move weighed on commodities, sending crude oil futures down 1 percent. [ID:nTOE706030] “China has been a huge part of the commodity bull market, so if they slow on the brakes that will hurt that market,” said Jeffrey Friedman, senior market strategist at Lind-Waldock in Chicago.
The preliminary Reuters/University of Michigan January sentiment number will be released at 9:55 a.m. (1455 GMT), and is seen edging up to 75.4 from 74.5 in the previous month.
M&T Bank Corp (MTB.N) rose 1.4 percent to $87.50 premarket after it reported its fourth-quarter results. [ID:nASA01DR4] French drugmaker Sanofi-Aventis SA (SASY.PA) hopes to reach a deal that to buy Genzyme Corp GENZ.O at around $76 per share, or some $20 billion, a French newspaper reported. Genzyme edged up 0.3 percent to $72.60 premarket. [ID:nLDE70D0E6] U.S. stocks fell Thursday, hurt by a slide in drugmaker Merck & Co Inc (MRK.N) and as falling commodities prices hit shares of natural resource companies.