Stock futures are indicating a considerably lower open on Monday, as investors react negatively to quarterly results from Bank of America (BAC). Trading could also be impacted by some significant mergers news as well as the reports of a report on leading economic indicators.
Bank of America is under pressure in pre-market trading despite reporting fourth quarter earnings that exceeded analyst estimates, as the financial services giant also took a substantial $13.4 billion provision for loan losses.
The company reported a first-quarter net profit of $4.2 billion. After preferred dividends, including $402 million paid to the U.S. government, net income applicable to common shareholders totaled $2.81 billion or $0.44 per share.
On average, 19 analysts polled by Thomson Reuters expected the company to report earnings of $0.04 per share.
Meanwhile, in merger news, Oracle (ORCL) announced a definitive agreement to acquire Sun Microsystems (JAVA) for $9.50 per share in cash. This transaction is valued at approximately $7.4 billion, or $5.6 billion net of Sun's cash and debt.
Oracle expects the acquisition to be a positive drive to its earnings by at least $0.15 on a non-GAAP basis in the first full year after closing. The company also estimates that the acquired business will contribute over $1.5 billion to its non-GAAP operating profit in the first year, increasing to over $2 billion in the second year.
Additionally, Pepsi Bottling Group (PBG) and PepsiAmericas (PAS) both confirmed buyout proposals from PepsiCo (PEP), indicating that the soft drink maker is looking to take over its own bottling.
PepsiCo offered to acquire all the outstanding shares of Pepsi Bottling Group's common stock not owned by PepsiCo for $29.50 per share, while it also offered to acquire all of PepsiAmericas' outstanding shares that are not already owned by PepsiCo for $23.27 per share.
On the economic front, the Conference Board is scheduled to release a report on leading economic indicators in the month of March at 10 AM ET. The consensus estimate calls for a 0.2 percent decline in the leading indicators index for the month.
Crude oil futures are receding $2.56 to $47.77 a barrel after declining $1.91 or 3.7 percent to $50.33 a barrel in the week ended April 17th. Meanwhile, the price of gold is rising $5.10 to $873 an ounce after ending last week down $11.60 at $869.40 an ounce.
On the currency front, the dollar fell against the yen last week, while it continued to rise against the euro. Currently, a dollar is trading at 98.35 yen and is valued at $1.2967 versus the euro.
In overseas trading, stock markets across the Asia-Pacific region closed mostly higher on Monday, with Chinese stocks showing notable strength due in part to the Chinese premier's upbeat assessment that the economy is doing better-than-expected.
The major European markets have come under pressure, however, with the U.K.'s FTSE 100 Index currently down 1.8 percent, while the French CAC 40 Index and the German DAX Index are down 2.9 percent and 3.4 percent, respectively.
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