Stock Futures in Red After Data Deluge, MasterCard Jumps
NEW YORK (TheStreet) -- Stock futures remained in the red Thursday, the last trading day of January, and moved little as investors digested a raft of economic reports and awaited Chicago PMI data.
Facebook (FB) shares were plunging by more than 5% in premarket trading as investors dissected the social networking giant's fourth-quarter report.
MasterCard (MA) booked fourth-quarter earnings of $4.86 a share on revenue of $1.9 billion, topping the average analyst estimate of earnings of $4.82 a share as processed transactions increased by 20% and cross-border volumes rose by 17%. Analysts, on average, were expecting revenue of $1.89 billion. Shares were jumping more than 3% in premarket trading.
Futures for the Dow Jones Industrial Average were down 9 points, or 19.42 points below fair value, at 13,829. Futures for the S&P 500 were off 1.25 points, or 3.16 points below fair value, at 1494. Futures for the Nasdaq were off 8.5 points, or 9.83 points below fair value, at 2727.Major U.S. stock averages ended lower Wednesday after the government said the economy contracted in the fourth quarter. A spate of jobs numbers were released Thursday morning before the open ahead of Friday's highly anticipated January nonfarm payrolls report. Michael Pento, president of Pento Portfolio Strategies, said he thinks Friday's job numbers will disappoint and give further evidence that the economic recovery isn't gaining momentum. "I think the market is a bit ahead of itself and could pull back in the short term," Pento said. "However, the Fed will not going to let up one centimeter on the monetary gas pedal and that will cause another bubble to form in equities in 2013." Challenger Gray & Christmas said Thursday that U.S. employers announced plans to cut payrolls by 40,430 in January, up 24% from 32,556 in December. The Labor Department said that initial jobless claims for the week ended Jan. 26 increased by 38,000 to 368,000 from the previous week's unrevised figure of 330,000. The four-week moving average was 352,000, an increase of 250 from the previous week's unrevised average of 351,750. Continuing claims for the week ended Jan. 19 rose by 22,000 to 3.197 million from the preceding week's upwardly revised level of 3.175 million. Economists were expecting initial jobless claims of 350,000 and continuing claims of 3.176 million. The Bureau of Economic Analysis said that personal income jumped 2.6% in December after rising by an upwardly revised 1% in November, as dividend income increased by 34.3% from the month prior. Personal spending ticked up 0.2% after increasing 0.4%. Expectations were for a rise in personal income of 0.8% and spending of 0.3%. "The spectacular ... leap in U.S. personal income in December won't be sustained as it was due to dividend and bonus payments being brought forward in anticipation of year-end rises in tax rates," said Paul Dales, senior U.S. economist at Capital Economics. "More generally, this report is largely irrelevant since, as its for December, and with the GDP report already out, this report merely colors in the outlines," said Dan Greenhaus, chief global strategist at BTIG. The Bureau of Labor Statistics said that its employment cost index rose by an as-expected 0.5% in the fourth quarter after increasing 0.4% the prior quarter. The Chicago PMI at 9:45 a.m. EST is estimated to have slipped to 50.5 in January from 51.6. The Nikkei in Japan closed up by 0.22% on Thursday. Hong Kong's Hang Seng finished down 0.39%. The DAX in Frankfurt was falling 0.55% and the FTSE in London was off 0.49%. Gold for April delivery was down $6 at $1,675.60 an ounce at the Comex division of the New York Mercantile Exchange, while March crude oil futures were off 28 cents at $97.66 a barrel. The benchmark 10-year Treasury was rising 6/32, diluting the yield to 1.971%. The dollar was up 0.04%, according to the U.S. dollar index. In corporate news, Facebook's (FB) fourth-quarter earnings topped Wall Street expectations as revenue jumped 40%. Mobile revenue came in shy of many analysts' lofty estimates. Shares were tumbling in premarket trading. Fusion-IO (FIO) shares were plummeting by nearly 16% after the provider of datacenter solutions gave much lower-than-expected sales estimates for the third-quarter at $80 million and an operating loss estimate of $10 million to $15 million as Facebook and Apple (AAPL) pushed back bulk orders. Qualcomm (QCOM), the chipmaker, blew past Wall Street's fiscal first-quarter estimates and offered robust second-quarter guidance. Shares were popping more than 6.5%. Media giant Viacom (VIAB) posted fiscal first quarter earnings of 91 cents a share, beating estimates by a penny. Revenue decreased 16% to $3.31 billion, driven primarily by lower Filmed Entertainment revenues due to the timing and mix of releases. The Wall Street revenue target was $3.49 billion. Citigroup (C) is looking to pull out of consumer banking in more countries in an effort to lower costs and boost profits, Reuters reported, citing two people familiar with the matter. Shares were down 0.43%. Royal Dutch Shell (RDS.A), Europe's largest oil company, said fourth-quarter net earnings rose 2.6% to $6.67 billion, coming in below analysts' expectations. Shares were flat. Shell said it would raise its dividend in 2013 to 45 cents a share, a 4.7% boost from the year earlier. -- Written by Andrea Tse in New York.
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