Little early support for U.S. equities
German outlooks weigh, but U.S. 'beats' continue
By Emily Church, CBS.MarketWatch.com
Last Update: 8:21 AM ET April 24, 2003
LONDON (CBS.MW) - U.S. stock futures were marked lower in pre-open trading on Thursday amid a downgrade on AT&T and a weak performance in European - particularly German -- stocks.
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The dollar was coming under renewed selling pressure as the euro crossed the $1.10 mark. The S&P 500 tracker (SPY: news, chart, profile) was down 0.5 percent.
Still the run of better-than-expected first quarter earnings from big U.S. corporates continued. Aetna (AET: news, chart, profile), American International Group (AIG: news, chart, profile), Dow Chemical (DOW: news, chart, profile) and Marriott International (MAR: news, chart, profile) bested the average estimates from analysts.
Shares of Nortel Networks (NT: news, chart, profile) spiked 2.3 percent to $2.62 after the telecom equipment maker reported first-quarter net earnings of $54 million, or a penny a share vs. a loss of 26 cents a share in the year-earlier period.
Excluding discontinued operations, the telecommunications equipment maker lost 3 cents a share. Revenue fell 18 percent to $2.4 billion. Analysts surveyed by Reuters Research had been expecting a loss of 3 cents a share and revenue of $2.31 billion, on average.
Looking ahead, the company expects the telecom equipment market to decline "modestly" in 2003. Nortel added that its capital expenditures for the second quarter would be similar to first quarter levels.
Shares of network bellwether Cisco Systems (CSCO: news, chart, profile) were down 1 percent at $14.19 on Instinet.
From the overnight, shares of Overture Services (OVER: news, chart, profile), a provider of paid-advertising listings on the Web, tumbled after it slashed its earnings goals in the current quarter and the full year. Qualcomm (QCOM: news, chart, profile) was rising on its quarter, released late Wednesday.
German disappointments
Disappointing outlooks two of German's biggest industrial companies, Siemens (SI: news, chart, profile) and automaker DaimlerChrsyler (DCX: news, chart, profile), and larger-than-expected charges in the first quarter at Germany's biggest bank, Deutsche Bank (DB: news, chart, profile), capped the bulls on German stocks.
The rapid rise in the euro and weak U.S. market for exports are impacting in the first quarter, European results for the quarter are making clear this week. German shares, measured in the DAX-30, have run up 34 percent from the March 12 lows.
T cut
Shares of AT&T (T: news, chart, profile) were giving back some on Wednesday's stunning 23-percent surge on Wednesday after its March quarter numbers. The stock was marked down 2.7 percent at $16.56.
UBS Warburg downgraded the stock to reduce from neutral overnight, telling clients "we believe the strong results in the consumer business, which drove first quarter earnings are not sustainable. We expect revenue losses to accelerate and margins to come under renewed pressure."
The broker also cut its rating on Xerox Corp. (XRX: news, chart, profile) to neutral from buy.
DCX
Shares of DaimlerChrysler were down 2.6 percent in Frankfurt, adding to losses on the day after the automaker's cautious outlook for Chrysler and full-year sales.
DCX posted a drop in group operating profit to 1.4 billion vs. 3.1 billion euro a year ago, which included one-time items. It said it sold 1 million vehicles worldwide in the first quarter of 2003, down 5 percent on the year "due to weaker demand in major markets."
Looking ahead, DCX said: "During the last few weeks the market environment in the U.S. has become even more challenging. Thus it will be difficult to achieve the operating profit target of $2 billion before restructuring expenses" in Chrysler.
Airbus deal?
Shares Airbus majority owner EADS (FR:005730: news, chart, profile) were last up 4.4 percent in Paris amid a report that Airbus was won an order from U.S. low-fare JetBlue Airways Corp. (JBLU: news, chart, profile).
Airbus, the Boeing (BA: news, chart, profile) rival, won the order for as many as 115 airplanes valued at $6.4 billion, Bloomberg reported, citing anonymous sources. A spokesman for Airbus in Toulouse declined to comment on the report, but confirmed that Airbus has been in negotiations with JetBlue. A spokesperson for JetBlue was not available.
Emily Church is London bureau chief of CBS.MarketWatch.com. |
