China PMI Up: Market Happenings for Tuesday, July 24, 2012

Premarket, futures are up a bit as a report showing an improvement in Chinese manufacturing offsets worries about Europe. Gainers this morning include R (+12%), PCAR, BIIB, THC and GT while losers include DV (-28%), APOL, WHR, UPS and BTU.

The Market

Today HSBC said its China Manufacturing Purchasing Managers’ Index came in at 49.5 for July. While any reading below 50 indicates contraction, this is the highest number reported since February and shows a significant improvement.

Rating agency Moody’s cut the outlook on Germany’s prized AAA credit rating to “negative” after the closing bell Monday, citing concerns about the stability of the eurozone and the potential for more bailouts. Moody’s also cut its outlook on the AAA ratings of the Netherlands and Luxembourg to “negative.” Finland is the only country in the 17-nation eurozone to maintain its AAA rating and stable outlook.

Spain is still in the spotlight, with the yield on the 10-year bond hitting a fresh euro-era record high of 7.625%. That came as Spain successfully auctioned €3 billion of 3-month and 6-month government bills, but investors demanded higher interest rates amid ongoing fears that Spain could require a full-blown bailout.

DuPont (DD) reported its net income totaled $1.18 billion, or $1.25 per share, for the three months ending June 30, down from $1.22 billion, or $1.29 per share, for the same period last year. Excluding one-time items, net income was $1.48 per share. That beat Wall Street estimates of $1.46 per share. Revenues rose 7 percent to $11 billion, up from $10.26 billion for the second quarter of 2011.

AT&T (T) reported earnings rose to $3.90 billion, or 66 cents per share, from $3.59 billion, or 60 cents per share, a year earlier. The result beat Wall Street expectations of 63 cents per share. Revenue rose to $31.6 billion from $31.5 billion but fell a little short of analysts’ expectations for $31.7 billion.

Apple (AAPL) report earnings after the close today.

European stocks were mixed in afternoon trading and Asian markets ended mixed.

Earnings Reports

Earnings reports: Apple (Consensus $10.38), AT&T (0.63), UPS-United Parcel (1.17), MO-Altria (0.57), EMC-EMC corp (0.39), SPG-Simon Property (0.71), DD-DuPont (1.46), BIIB-Biogen Idec (1.56), LMT-Lockheed Martin (1.91), RAI-Reynolds America (0.76), ITW-Illinois Tool (1.10), NSC-Norfolk Southern (1.53), AFL-Aflac (1.61), BRCM-Broadcom (0.67), APD-Airproducts (1.41), PCAR-Paccar (0.81), EW-Edwards Life (0.65), WU-Western Union (0.43), ALTR-Altera Corp (0.39), FTI-FMC Technologies (0.48), RRC-Range Resources (0.09), CHRW-CH Robinson (0.71), RF-Regions Financial (0.14), SIAL-Sigma-Aldrich (0.97), COG-Cabot Oil & Gas (0.06), JNPR-Juniper Networks (0.16).

Financial Calendar

0745 ET ICSC (Int’l Council of Shopping Centers) weekly retailer sales.

0845 ET Fed Chairman Bernanke speaks on early childhood education in Cincinnati.

0855 ET Redbook weekly retailer sales.

0858 ET Markit July US PMI preliminary expected 52.0, last 52.5.

1000 ET July Richmond Fed manufacturing index expected +2 to -1, June -7 to -3.

1000 ET May FHFA house price index expected +0.4% m/m, Apr +0.8% m/m.

1130 ET Weekly 4-week T-bill auction.

1300 ET Treasury sells $35 bln in 2-year T-notes.

1630 ET API weekly U.S. oil statistics.

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