Dow Futures Rise, Hertz, Lululemon: 5 Things You Must Know

Stock futures rise after Wall Street suffers its biggest drop since March; Hertz seeks to sell $1 billion in new stock; Intel loses a veteran chip designer.
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Here are five things you must know for Friday, June 12:

1. -- Stock Futures Rebound From Rout

Stock futures were rising Friday following a decline of nearly 7% in the Dow Jones Industrial Average that was brought about by worries the economy could take longer to recover if the U.S. sees a resurgence in coronavirus infections.

Contracts linked to the Dow rose 501 points, futures for the S&P 500 gained 50 points and Nasdaq futures were up 138 points.

Stocks pointed higher at Friday's open after Wall Street suffered its biggest drop since March.

On Thursday, the Dow dropped 1,861 points, or 6.9%, to close at 25,128, the S&P 500 sank 5.89%, and the Nasdaq slumped 5.27%.

Many on Wall Street weren't surprised by the sharp pullback in stock prices.

“The market was ripe for some profit-taking after soaring more than 40% since the March lows," said Greg McBride, chief financial analyst at Bankrate.com. "Add in the reality of a long way to go in the economic recovery and the ever-present worries about a resurgence in the virus and you have the recipe for a selloff.”

"More Covid-19 spread in a few Southern and Western states and a gloomy outlook from the Fed provided the spark for some of the froth to come out" of the stock market, said Jeff Buchbinder, equity strategist at LPL Financial.

Stocks rose Friday in Europe and shares in the U.K. traded higher even after the U.K. posted a 20.4% drop in gross domestic product, the biggest monthly decline in its history, in April.

The economic calendar Friday includes Import and Export Prices for May at 8:30 a.m. ET and Consumer Sentiment for June at 10 a.m.

2. -- Coronavirus - Second Wave?

Coronavirus cases have climbed in nearly half the states in the U.S. as businesses reopen following lockdown measures and stay-at-home orders, according to an analysis from the Associated Press.

The jump in cases has caused the governor of North Carolina to rethink plans to reopen schools or businesses, and Florida reported the highest number of coronavirus cases in a single day since the pandemic began.

Texas has seen more hospitalized Covid-19 patients than at any time before, the AP noted.

Houston officials said they were “getting close” to reimposing a stay-at-home order and could reopen a Covid-19 hospital set up but never used at a football stadium as virus cases rise, Bloomberg reported.

“We may be approaching the precipice of a disaster,” said Harris County Judge Lina Hidalgo, the highest-ranking official in the county that includes Houston, the fourth-largest U.S. city. “It’s out of hand right now. The good news is it’s not severe out of hand.” 

Coronavirus cases in the U.S. have risen to 2.02 million and deaths have increased to 113,820, according to Johns Hopkins University.

Treasury Secretary Steven Mnuchin told CNBC Thursday that shutting down the U.S. economy again wasn't an option even if the country sees a second wave of infections.

3. -- Hertz Seeks to Sell $1 Billion in New Stock

Hertz Global Holdings  (HTZ) - Get Report has asked a bankruptcy judge to let it take advantage of the surge in its share price by selling up to $1 billion of new stock.

The car rental giant proposes an offering as many as 246.78 million common shares, according to a court filing, Bloomberg reported. 

Hertz based its request to the court on a nearly 10-fold increase in its stock price from 56 cents on May 26 to $5.53 on Monday, according to the filing, Bloomberg noted.

“The recent market prices of and the trading volumes in Hertz’s common stock potentially present a unique opportunity for the debtors to raise capital on terms that are far superior to any debtor-in-possession financing,” the company told the bankruptcy judge.

Hertz said it would warn any potential buyers “the common stock could ultimately be worthless.”

Hertz shares were rising 48.06% to $3.05 in premarket trading after declining more than 18% on Thursday.

4. -- Intel Loses Veteran Chip Designer Jim Keller

Intel’s  (INTC) - Get Report Jim Keller, a veteran chip designer, has left the semiconductor maker after just two years at the company. 

Keller resigned for “personal reasons,” Intel said in a statement. He will serve as a consultant to Intel for six months.

Prior to Intel, Keller worked at Apple, Advanced Micro Devices and Tesla. 

Keller was working to streamline a lot of the product development processes on the silicon side, as well as providing strategic platforms though which future products can be developed and optimized to market, according to a report from AnandTech.

5. -- Lululemon Slides on Sales Miss

Lululemon Athletica  (LULU) - Get Report was falling 4% to $295.78 in premarket trading after fiscal first-quarter revenue at the casual apparel retailer missed analysts' estimates.

For the quarter ended May 3, revenue fell 17% to $652 million from $782.3 million in the year-earlier quarter. Analysts had expected revenue of $691.6 million.

Earnings in the quarter were 22 cents a share, down from 74 cents a year earlier, but ahead of predictions of 20 cents.

The company didn't provide fiscal-year guidance and didn't disclose same-store sales for the latest quarter saying that with stores closed during the coronavirus pandemic “comps are not currently representative of the underlying trends of its business.”