Dow May Slip as Costco Beats the Street

LONDON -- After closing at a fifth consecutive record high on Monday, the Dow Jones Industrial Average (DJINDICES: ^DJI  ) may retreat slightly and open down by 0.2% this morning, according to stock index futures. Meanwhile, the S&P 500 (SNPINDEX: ^GSPC  ) may open 0.21% lower. The CNN Fear & Greed Index has returned to "extreme greed" after closing above 80 for the last two days, signaling a renewed uplift in investor sentiment.

Highlights of today's economic calendar include the NFIB small-business confidence index for February, which ticked up 1.9 points to 90.8. Though an improvement, the increase only puts the index around the 2008 average. At 2 p.m. EDT, February's federal budget is due.

Meanwhile, Costco Wholesale kicked off today's corporate reports with a surprise 18% beat on its second quarter earnings, which came in at $1.24 per share on revenue of $24.3 billion, beating analysts' expectations of $1.06 per share. Other companies due to report before the markets open include Raven Industries, Bon-Ton Stores, Stage Stores, and Keryx Biopharmaceuticals.

Stocks that may be actively traded when markets open include Boeing after Ireland's Independent newspaper reported that Irish airline Ryanair may have signed a deal to buy 200 aircraft from Boeing. Yum! Brands may also rise after gaining 5.5% in premarket trading following an update from the company indicating that same-store sales in China fell by 20% in the first quarter -- less than the 25% forecast by analysts.

European markets
In Europe, markets were largely unchanged, with investors digesting the news that U.K. industrial output fell by 1.2% in January, increasing the likelihood of a triple-dip recession. U.K. GDP fell in the last quarter of 2012, and today's news pushed the pound down half a cent to a new low of $1.485 against the dollar. Also in focus was a fall in German inflation, which dropped to 1.5% in February from 1.7% the previous month. The combination of these factors has helped to raise investors' hopes that the Bank of England and European Central Bank may now consider further stimulus measures.

At 8 a.m. EDT, European markets were flat: The DAX was down 0.09%, the CAC 40 was up 0.08%, the FTSE MIB was down 0.04%, and the IBEX 35 was down 0.05%. In London, the FTSE 100 (FTSEINDICES: ^FTSE  ) was up 0.05%, led by copper miner Antofagasta (LSE: ANTO  ) , which gained 5% after announcing a special dividend payment that doubles its total dividend for 2012. Antofagasta's revenue also came in above expectations after the company achieved record production levels that overcame the effects of weaker copper prices.

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  • Report this Comment On March 12, 2013, at 3:28 PM, prginww wrote:

    A triple-dip recession in the UK has been more-or-less a certainty since after the Olympics as the economic prospects were downhill from thereon. Indeed if the Olympics could only add-on a slight percentage point mid and post 2012, there was little hope of a positive economic revival. What I cannot understand is why our economists and so-called wise men thought differently. Basically this shows that they have not even common sense and I certainly would not employ them for bum information and false hope predictions that they constantly espouse. Unfortunately now I consider that we shall have a quadruple dip and possibly one after that – never seen before in modern British history. But I have to stress that the big problem with the UK economy is that there is no long-term economic 'blueprint' based upon time horizons of 30 years or more, not 5 year political cycles that will get the UK nowhere now in the new world of 21st century economics. For politicians have to start and see that we have to build new economic foundations and not persist with the old and present thinking that will provide little as the last 5-years has clearly shown. Indeed if politicians do not start thinking differently we shall look back in 20 years time and think that the present times were in fact rosy. Things are bad but a perpetuation of current thinking of hope by politicians and their advisers will get the UK and its people nowhere. We simply have to produce a long-term economic blueprint based upon the creation of new technological industries for jobs and wealth. The UK’s people are the most creative people in the world and have according to Japanese and Germany research created up to 54% of what constitutes the modern world in technological terms – that which creates all new wealth. For that future successful vision to happen, it can only come from an immense physically presence and the building of a unique science and technology city with the national creative infrastructure in place. Indeed that leading-edge blueprint and unique intellectual thinking has to have at its core the vast ORE-STEM complex for all our future sakes and not more so for our young ones now who must have something really meaningful to look forward too. If not they will have very little and where this will come to pass it has to be said. A sad indictment of our politician’s leadership failures and their unreal thinking in the century of great technological change. Will we be a part of this global phenomena, I very much doubt it if present mindsets persist and do not change to what is required.

    Dr David Hill

    World Innovation Foundation

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