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Dow seen opening higher on Greek bailout deal, Home Depot, Wal-Mart in focus

21st Feb 2012, 7:30 am by Joyanta Acharjee
Dow seen opening higher on Greek bailout deal, Home Depot, Wal-Mart in focus

US equity markets looked set to open higher Tuesday as investors return from the Presidents Day holiday with futures maintaining gains after eurozone finance ministers announced a deal to provide Greece with a second rescue package.

In pre-market trading, the Dow Jones Industrial Average rose 36 points to 12,965, the S&P 500 gained 2 points to 1,361.70 while the NASDAQ edged up 0.5 points to 2,582.50.

Friday US markets ended mixed with the Dow up 0.35%, the S&P 500 was up 0.23% and the NASDAQ was down 0.27%.

After more than 12 hours of talks, eurozone nations reached an agreement early Tuesday to hand Greece 130 billion euros - $170 billion - in additional bailout loans to save it from a potentially disastrous default in March.

The deal is expected to bring Greece's debt down to 120.5% of gross domestic product by 2020 - that's around the maximum that the International Monetary Fund and the eurozone consider sustainable.

Without the deal, Greece was facing a potentially calamitous default next month and possibly being forced from the eurozone.

In corporate news, Dow component Home Depot (NYSE:HD) said Tuesday that fiscal fourth-quarter net income rose 32% on 5.9% higher net sales and a 5.7% jump in same-store sales.

For the quarter ended January 29, Home Depot earned $774 million, or 50 cents per share, compared with $587 million, or 36 cents, in the year-earlier quarter. Sales reached $16.01 billion from $15.13 billion.

A survey of analysts by FactSet Research produced consensus estimates of 42 cents per share of profit on $15.5 billion of sales.

Wal-Mart Stores (NYSE:WMT) said its US division posted a 1.5% rise in sales at stores open at least a year over the holiday season.

The world's largest retailer earned $1.51 per share from continuing operations in the fourth quarter. It had forecast earnings of $1.42 to $1.48 per share from continuing operations.

Wal-Mart expects same-store sales at the Walmart chain in the US to be flat to up 2%, compared with a 1.8% drop a year earlier.
Analysts on average had expected a rise of 1.8%, according to Thomson Reuters data.

Kraft Foods (NYSE:KFT) - whose products include Oreo cookies, Philadelphia cream cheese and Oscar Mayer deli meats - reported fourth-quarter net profit of $830 million, or 47 cents per share, against $540 million, or 31 cents in the year-ago period.

Revenue for the period rose 6.6% to $14.69 billion, against $13.77 billion in the year ago period.

Adjusted profit was 57 cents a share, which included a negative 1 cent impact from foreign currency.

Adjusted profit met forecasts of analysts polled by FactSet Research, while revenue fell short of a forecast of $14.8 billion.

FedEx (NYSE:FDX) may try to jump into the bidding for TNT Express after the board of Europe's second-largest package-delivery company rejected a $6.43 billion offer from United Parcel Service (NYSE:UPS).

Engineering company URS Corp (NYSE:URS) will buy Canadian oilfield services company Flint Energy Services (TSE:FES) for $1.25 billion in cash, to expand its presence in the oil and gas sector.

Under the deal unanimously approved by the two companies’ boards, Flint shareholders will get $25 a share — a 68% premium over the stock’s Friday close. URS would also assume $225 million in Flint debt as part of the transaction

There are no major economic releases due Tuesday.

Commodities

In NYMEX futures trading, oil for March delivery, on its last day of trading, rose $1.41 to $104.65 a barrel.

The more active April crude contract gained $1.40 to $105 a barrel.

Gold futures for April delivery climbed $13 to $1,738.90 an ounce.

Europe

European stocks were lower in morning trading with the FTSE 100 eased 0.3%, the DAX dipped 0.5% and the CAC 40 was down by 0.6%.

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