RTTNews - Following two days of gains, stocks are poised for a lower open on Wednesday as traders are likely to do some profit taking after the recent run-up. The major index futures are all in negative territory, with the Dow futures down by 63 points.
Reaction to quarterly earnings results has been driven by cautious optimism, as firms have met or beat estimates by cost cutting rather than revenue growth and forecasts have been watered down, reflecting the recessionary economic climate.
Tech giant Apple (AAPL) reported a third quarter profit of $1.35 per share, compared to profit of $1.19 per share in the year-ago quarter. Wall Street analysts expected the company to earn $1.17 per share for the quarter, while the company's quarterly sales also beat estimates.
Yahoo! (YHOO) revealed second-quarter earnings of $0.10 per share, compared to $0.09 per share in the prior year quarter. The results beat analyst expectations of $0.08 per share, and third quarter revenue estimates also cleared forecasts by a notable margin.
Drug maker Pfizer Inc. (PFE) announced adjusted second quarter net income of $0.48 per share, compared to $0.55 per share in the same quarter last year. Although the firm met Wall Street expectations of $0.48 per share, quarterly revenues fell well short.
Boeing Co. (BA) said its second-quarter net income was $1.41 per share, compared to $1.16 per share in the same period last year. The earnings crushed earnings forecasts of $1.21 per share, while revenues came in-line with estimates.
Morgan Stanley (MS) reported a second quarter net loss of $1.10, compared to net income of $1.02 in the year ago quarter. Wall Street looked for the financial services giant to show a loss of $0.49 per share, while the firm's revenues met forecasts.
Meanwhile, Wells Fargo (WFC), QLogic (QLGC), PepsiCo (PEP) and Altria (MO) posted results that exceeded estimates, while chipmaker Advanced Micro Devices (AMD) disappointed, posting a deeper than expected loss.
Traders will also be looking to Capitol Hill, where Federal Reserve Chairman Ben Bernanke will deliver his second day of testimony regarding monetary policy before the Senate Banking Committee. The proceedings are scheduled to begin at 10:00 a.m. ET.
Tuesday, Bernanke told House Financial Services Committee that the U.S. economy is showing signs of stabilization and that the stimulus authorities pumped into the global economy late last year probably helped to avoid a collapse of the financial system.
Bernanke also said that the Fed is prepared to remove its stimulus when the time is appropriate in order to avoid a spike in inflation. However, he reiterated that the economy is still in a fragile state, with unemployment high and consumer spending shaky.
After showing a lack of direction for much of the day, a spike in buying interest in the afternoon helped stocks to finish modestly higher on Tuesday. The Dow advanced 68 points to 8,916, the Nasdaq climbed 7 points to 1,916 and the S&P 500 rose by 3 points to 955.
Crude oil futures are sliding in early commodities trading, falling by $0.82 to $64.79 a barrel after advancing in the previous session. The price of gold is inching higher, edging up by $0.10 to $947.0 an ounce.
On the currency front, the U.S. dollar is little changed against the major European currencies, posting a quote of $1.4190 against the euro and $1.6401 versus the pound. Against the yen, the buck is inching lower and is now valued at 93.31 yen.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Wednesday. While Japan's benchmark Nikkei 225 Index posted a 0.7 percent gain, Hong Kong's Hang Seng Index fell by 1.3 percent.
Meanwhile, the major European markets are all moving lower, with the German DAX Index and the French CAC 40 Index falling by 0.5 percent and 0.9 percent, respectively, while the U.K.'s FTSE 100 Index is posting a 0.3 percent loss.
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