Stocks Headed Higher Before Bell
Stocks were poised for gains early Wednesday as more blockbuster dealmaking combined with falling oil prices to soothe nervous buyers.
Index futures recently showed both the
S&P 500
and Nasdaq 100 trading 3 points above fair value. The 10-year Treasury bond was down 4/32 in price to yield 4.41%, while the dollar fell against the yen and euro.
Tech futures rose after
SAP
(SAP) - Get SAP SE Report
, the Germany software maker, reported a 14% rise in fourth-quarter earnings and raised margin guidance for 2006. The shares were up 10% in Europe.
Oil extended a three-day downturn ahead of potentially bearish readings on U.S. fuel inventories. Crude for March delivery was recently down 37 cents to $66.69 a barrel. Energy Department numbers are expected to show 1.4 million-barrel gains in crude and gasoline stocks, and an 875,000-barrel rise in distillates.
Overseas markets were mixed, with London's FTSE 100 recently up 0.7% to 5673 and Germany's Xetra DAX gaining 1% to 5388. In Asia, Japan's Nikkei was little changed overnight at 15,651, while Hong Kong's Hang Seng slipped 0.1% to 15,520.
U.S. markets had their second day of muted gains Tuesday, with the
Dow
and S&P 500 both adding about 0.2% and the
Nasdaq Composite
rising 0.8%. Stocks have now made up about a quarter of the losses they experienced in Friday's 2% selloff.
Corporate news was dominated by mergers and earnings Wednesday. The biggest piece is an apparent victory for
TheStreet Recommends
Boston Scientific
(BSX) - Get Boston Scientific Corporation Report
in the takeover contest for
Guidant
(GDT)
. Guidant, a medical device maker, will reportedly accept Boston Sci's $27 billion offer Wednesday after
Johnson & Johnson
(JNJ) - Get Johnson & Johnson Report
declined to raise its $24.2 billion bid.
Disney
(DIS) - Get Walt Disney Company Report
, meanwhile, confirmed a deal late Tuesday to acquire
Pixar
(PIXR)
for about $7.4 billion. The deal will leave
Apple
(AAPL) - Get Apple Inc. Report
cofounder Steve Jobs as Disney's biggest individual shareholder.
Corporate earnings continue to cascade in.
WellPoint
(WLP)
posted adjusted fourth-quarter earnings of $1.05 a share, topping estimates by a penny. The managed care giant raised guidance for all of 2006 to $4.54 a share, although the forecast is slightly below existing estimates.
To view David Peltier's video take on today's premarket action, click here
.
On Tuesday,
Sun Microsystems
(SUNW) - Get Sunworks, Inc. Report
reported a second-quarter loss of $223 million, or 7 cents a share, reversing a profit in the year-ago period. Sales of $3.34 billion were about $140 million south of forecasts.
Corning
(GLW) - Get Corning Inc Report
lost $32 million, or 2 cents a share, on sales of $1.2 billion in its December quarter. Adjusted earnings of 22 cents a share met analyst forecasts. For the current period, Corning sees earnings of 22 cents a share on sales of $1.2 billion to $1.25 billion. Analysts were expecting 22 cents on $1.23 billion.
Homebuilder
Centex
(CTX)
said quarterly earnings rose 30% on strong home closings, and the company confirmed its outlook for both fiscal 2006 and 2007. Revenue rose 25% to $3.74 billion, shy of analysts forecast of $3.81 billion.
Netflix
(NFLX) - Get Netflix, Inc. Report
soared after saying fourth-quarter earnings jumped 60% to $38 million, or 57 cents a share, on $195 million in revenue. The bottom-line number wiped out analysts 15-cent prediction.
