Dow seen opening higher ahead of Wall Street bank earningsReported by Proactive Investors on Friday, 13 July 2012 (on July 13, 2012)
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U.S. equity markets looked set to open higher Friday as investors await JPMorgan's (NYSE:JPM ) earnings and mull over the latest report on China's economy.
In pre-market trading, the Dow Jones Industrial Average rose 63 points to 12,565.15, the S&P 500 gained 7.3 points to 1,336.50 and the NASDAQ added 15.25 points to 2,553.12.
Thursday U.S. markets ended in the red with the Dow down 0.25%, the S&P 500 was 0.50% lower and the NASDAQ ended the session down 0.75%.
Figures released on China's economy added fuel to the notion of a global slowdown. In the second quarter, GDP in China grew at an annual pace of 7.6%, the lowest in three years and a deceleration from the 8.1% growth rate it saw the previous quarter.
On Friday, Moody's downgraded Italy's government debt two levels, citing an increased likelihood the country will be hit by higher borrowing costs. Yields on the Italian 10-year bonds fluctuated little, remaining at 5.99%.
In corporate news, JPMorgan is expected to post earnings of 72 cents per share on $21.9 billion in revenue, according to analysts surveyed by Thomson Reuters. That would mark a 43% drop in quarterly earnings versus a year ago.
Earlier this year the Wall Street bank warned of quarterly derivatives trading losses of $2 billion which some press reports say has now risen to as much as $9 billion as hedge funds and other market participants may have bet against trades made by the bank's London-based trader, Bruno Iksil - known as the "London Whale" due to the huge size of his trades.
Wells Fargo (NYSE:WFC) is expected to post earnings of 81 cents per share on $21.4 billion in revenue.
Thursday the bank agreed to pay $175 million to settle allegations that it discriminated against minority borrowers, according to the Department of Justice.
Shares of videogame publishers such as Activision Blizzard (NASDAQ:ATVI) and Electronic Arts (NASDAQ:EA) are in focus after NPD reported U.S. videogame industry sales down 29% in June compared to a year ago.
Wet Seal (NASDAQ:WTSLA) has been sued by three former employees, who accuse the retailer of racial discrimination.
The complaint alleges Wet Sale discriminated against African American store managers because they did not fit its brand image. The company says it denies any and all allegations of discrimination and will vigorously contest the allegations.
Lexmark (NYSE:LXK) is slashing its second quarter outlook, with the printer maker now expecting earnings of $0.87 to $0.89 per share compared to its prior guidance of $0.95 to $1.05.
Lexmark says it’s been hurt by unfavorable exchange rates and weaker than expected demand in Europe.
Johnson & Johnson (NYSE:JNJ) has reached a tentative settlement with shareholders who had sued management for not fixing various serious problems for years.
The settlement calls for a new committee of independent board members that will keep watch on various problems and make sure they are addressed quickly and fully.
On the economic front, June producer prices are expected to have fallen by 0.6%, according to a survey of analysts by Briefing.com.
The University of Michigan's Consumer Sentiment Index for July is expected to come in at 73.5, up from 73.2 last month.
Commodities
In NYMEX futures trading, crude for August delivery rose 57 cents to $86.65 a barrel while gold futures for August delivery rose
$13.30 to $1,578.60 an ounce.
Europe
European stocks rose in morning trading with the FTSE 100 adding 0.7%, the DAX gaining 0.8% and the CAC 40 up 0.5%.
Links:  Full news story
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