Market Happenings for Friday, April 27, 2012

Pre-market, futures are near unchanged. Gainers this morning include EXPE (+18.79%), AMZN (+17.25%),LIFE, SWY and GT while losers include WDC (-10.77%), RSG, SBUX, KLAC and VFC.

The Market

Thursday, after the closing bell, Standard & Poors announced that it was downgrading Spain’s credit rating from “A” to “BBB+” citing numerous drags on growth, and an ailing banking sector that might require further government support. The downgrade places Spanish debt only three steps above junk bond status.

Spain has officially slipped back into recession, with two consecutive quarters of economic decline. The nation’s notoriously stagnant job market has gotten much worse, with the unemployment rate rising to 24.4%. That’s like our Great Depression type of unemployment.

European stocks were higher in midday trading while Asian markets ended lower.

Procter & Gamble (PG) reported quarterly earnings of $0.94 a penny above estimates of $0.93. Sales rose by 2% to $20.2 billion, but the stock lost 2% in pre-market trading.

Merck & Co. (MRK) reported $0.56 per share up from $0.34 last year. Excluding one time items, MRK would have earned $0.99 per share.

Earnings Reports

Earnings reports (sorted by mkt cap): CVX-Chevron (consensus $3.23), PG-Procter & Gamble (0.92), MRK-Merk (0.98), SPG-Simon Property Group (0.65), F-Ford Motor (0.35), SCCO-Southern Copper (0.60), COV-Covidien Plc (1.03), NEM-Newmont Mining (1.13), VTR-Ventas (0.32), VFC-VF Corp. (1.88), IP-International Paper (0.50), WY-Weyerhaeuser (0.00), KKR-KKR & Co. LP (0.71), DTE-DTE Energy (1.09), CPN-Calpine (-0.13).

Financial Calendar

0830 ET Q1 employment cost index expected +0.5%, Q4 +0.4%.

0830 ET Q1 GDP expected +2.5% annualized, Q4 +3.0% annualized. Q1 personal consumption expected +2.3%, Q4 +2.1%. Q1 GDP price index expected +2.1%, Q4 +0.9%. Q1 core PCE deflator expected +2.1% q/q, Q4 +1.3% q/q.

0955 ET Final Apr U.S. University of Michigan consumer confidence expected unchanged at 75.7, previous -0.5 to 75.7.

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