Before the bell: Futures down; News Corp talks with MSFT, Yahoo with Time Warner
Posted by: in Latest NewsFiled under: Before the bell, Earnings reports, Deals, Microsoft (MSFT), Yahoo! (YHOO), Time Warner (TWX), Wal-Mart (WMT), Costco Wholesale (COST), duPont(E.I.)deNemours (DD), News Corp’B’ (NWS), Genentech Inc (DNA), AMR Corp (AMR), Economic data, Rite Aid Corp (RAD)
Stock futures were lower this morning amid fears of weak earnings reports and jitters about oil prices, which continue to rise this day.
Stocks fell Wednesday after a lowered outlook from UPS, seen as an economic bellwether, and oil briefly topping $112 a barrel, bringing the Dow industrials down 49 points or 0.4%, the Nasdaq Composite down 26 points or 1.1%; and the S&P 11 points or 0.8% lower.
On the economic calendar this day, the weekly jobless claims data for the week ending April 5 is due out this morning at 8:30 a.m. EDT. According to Bloomberg, claims are expected to be around 386,000, and anything above 400,000 will fuel concerns about the weakening of the job market. Investors will also be watching March chain store sales reports. The day began with an upbeat report from Costco (NASDAQ: COST), whose sales rose 7%. Wal-Mart (NYSE: WMT) then reported its same-store sales rose 0.7%, which was below analysts’ estimates of 1%, but said it anticipates superior April figures. The company stated its inventory in US stores is well managed.
Dupont (NYSE: DD) said in a statement this day that its first quarter earnings topped forecasts.
In the news, the New York Times reports News Corp. (NYSE: NWS) may be joining forces with Microsoft (NASDAQ: MSFT) in its bid for Yahoo! (NASDAQ: YHOO). The two companies are stated to be in speaks to combine News Corp.’s MySpace, Microsoft’s MSN and Yahoo! to create an world wide web giant. Meanwhile the Wall Street Journal reports Yahoo! is in speaks with Time Warner (NYSE: TWX) to combine with AOL in order to foil Microsoft’s bid. Separately, Yahoo confirmed it would test Google’s AdSense search service.
In other deal news, Japan’s Takeda Pharmaceuticals said it would purchase Massachusetts-based Millennium Pharmaceuticals (NASDAQ: MLNM) for $8.8 billion. Takeda’s $25-a-share offer represents a 53% premium to Millennium’s closing price Wednesday.
American Airlines plans to cancel 900 more flights today, following over 1,000 yesterday. AMR Corporation (NYSE: AMR), parent company of American, closed down over 11% yesterday.
European stocks continued to decline for a third day in a row and, as expected, the Bank of England cut interest rates by 25 basis points to 5% this morning.
Earnings are expected this day from Genentech Inc. (DNA) and Rite Aid Corp. (RAD).
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