OVERNIGHT MARKETS AND NEWS
March E-mini S&Ps (ESH16 -0.90%) are down -0.81% and European stocks are down -2.34% at a 1-week low as they track crude oil prices, which are down -3.58%. Crude oil prices extended their declines late yesterday after API data showed U.S. crude supplies expanded by +7.1 million bbl last week. A sell-off in copper prices has also hurt miners and commodity producers with Glencore Plc and BHP Billiton down at least 7%, while Freeport-McMoRan and Alcoa are both down over 2%. The Chinese yuan fell to a 1-1/2 week low against the dollar ahead of the G-20 meeting in Shanghai on Feb 26-27 where people with knowledge of the agenda said officials from the world's biggest economies will discuss the recent turmoil in China's markets and ways to bolster a safety net for the global financial system. Asian stocks settled mostly lower: Japan -0.85%, Hong Kong -1.15%, China +0.88%, Taiwan -0.62%, Australia -2.10%, Singapore -1.95%, South Korea -0.05%, India -1.37%.
The dollar index (DXY00 +0.42%) is up +0.42% at a 3-week high. EUR/USD (^EURUSD) is down -0.51% at a 3-wek low. USD/JPY (^USDJPY) is down-0.25%. GBP/USD is down -0.92% at a 6-3/4 year low on concern that Britons will vote to leave the EU in a June referendum.
Mar T-note prices (ZNH16 +0.30%) are up +13 ticks at a 1-week high as the slide in stock prices boosts the safe-haven demand of government debt. T-notes also found support on carryover from a plunge in the 10-year German bund yield to a 10-month low of 0.131%.
U.S. STOCK PREVIEW
Key U.S. news today includes: (1) weekly MBA mortgage applications (previous +8.2% with purchase sub-index -3.7% and refi sub-index +16.0%), (2) Richmond Fed President Jeffrey Lacker's speech on the topic of “Can Monetary Policy Affect Economic Growth” at the John Hopkins Carey Business School, (3) prelim-Feb Markit services PMI (expected +0.3 to 53.5, Jan -1.1 to 53.2), (4) Jan new home sales (expected -4.4% to 520,000, Dec +10.8% to 544,000), (5) the Treasury's sale of $13 billion of 2-year floating-rate notes and $34 billion of 5-year T-notes, (6) Dallas Fed President Rob Kaplan's speech to the Harvard Clubs of Dallas and Fort Worth about current economic conditions and monetary policy, and (7) St. Louis Fed President James Bullard's speech to Money Marketeers in New York.
There are 11 of the S&P 500 companies that report earnings today with notable reports including: HP (consensus $0.36), salesforce.com (0.19), Target (1.54), TJX (0.94), L Brands (2.05), Lowe's (0.59), Chesapeake Energy (-0.16), Transocean (0.65).
U.S. IPO's scheduled to price today: Cancer Prevention Pharmaceuticals (CPP).
Equity conferences during the remainder of this week include: Jefferies Media & Communications Conference on Tue-Wed, RBC Capital Markets Health Care Conference on Tue-Wed, IHS Energy CERAWeek Conference on Tue-Thu, Wells Fargo Bank Investors Forum on Wed, Cantor Fitzgerald Internet & Technology Conference on Thu, Gabelli & Company Pump, Valve and Water Systems Symposium on Thu.
OVERNIGHT U.S. STOCK MOVERS
Avis-Budget Group (CAR +1.01%) tumbled over 12% in after-hours trading after it lowered guidance on fiscal 2016 adjusted EPS to $2.70-$3.30, below consensus of $3.43.
Ford Motor (F -1.11%) was downgraded to 'Underperform' from 'Neutral' at Credit Suisse.
DreamWorks Animation(DWA -2.09%) jumped over 7% in after-hours trading after it reported Q4 adjusted EPS of 55 cents, over three times expectations of 15 cents.
WebMD Health Corp. (WBMD -0.19%) rose almost 3% in after-hours trading after it said it sees 2016 revenue of $685 million-$8705 million, above consensus of $689.3 million.
Dycom Industries (DY -0.65%) slumped 15% in after-hours trading after it reported Q2 adjusted EPS of 54 cents, weaker than consensus of 56 cents, and hen said it sees Q3 EPS of 70 cent-80 cents, below consensus of 84 cents.
Deere & Co. (DE -1.61%) was upgraded to 'Buy' from 'Hold' at Argus Research.
Copart (CPRT -0.66%) reported Q2 EPS of 48 cents, higher than consensus of 43 cents.
Ormat Technologies (ORA -0.38%) raised guidance on fiscal 2016 revenue to $620 million-$640 million, higher than consensus of $608.7 million.
MSA Safety (MSA +0.26%) reported Q4 adjusted EPS of 84 cents, better than consensus of 68 cents,
Trexx Co. (TREX +9.75%) gained almost 2% in after-hours trading after it reported it will replace Snyder's-Lance in the SmallCap 600 after the close of trading Wednesday, February 24.
AMAG Pharmaceuticals (AMAG +1.11%) rose over 3% in after-hours trading after it reported it will replace Diamond Foods (DMND +0.97%) in the SmallCap 600 after the close of trading Monday. February 29.
Snyder's-Lance (LNCE +1.47%) climbed almost 2% in after-hours trading after it reported it will replace California Resources in the MidCap 400 at the close of trading Wednesday, February 24.
Morgan Stanley (MS -3.38%) said its energy loan exposure at the end of Q4 was $15.9 billion, down from $17.2 billion at the end of Q3.
Advisory Board Co. (ABCO -1.31%) was downgraded to 'Market Perform' from 'Market Outperform' at Avondale Partners LLC with a 12-month price target of $31.
MARKET COMMENTS
Mar E-mini S&Ps (ESH16 -0.90%) this morning are down -15.50 points (-0.81%). Tuesday's closes: S&P 500 -1.25%, Dow Jones -1.14%, Nasdaq-1.62%. The S&P 500 on Tuesday closed lower on fall in the yuan fell to a 1-week low against the dollar, the -5.6 point decline in U.S. Feb consumer confidence to 92.2 (weaker than expectations of -0.9 to 97.2 and the lowest in 7 months), and the slide in energy producer stocks after crude oil fell by more than 6%.
Mar 10-year T-notes (ZNH16 +0.30%) this morning are up +13 ticks a a 1-week high. Tuesday's closes: TYH6 +5.00, FVH6 +3.50. Mar T-notes on Tuesday closed higher on increased safe-haven demand with the sell-off in stocks and on Dallas Fed President Kaplan's comment that the Fed should be open to leaving policy on hold for an extended time if needed.
The dollar index (DXY00 +0.42%) this morning is up +0.412 (+0.42%) at a 3-week high. EUR/USD (^EURUSD) is down -0.0056 (-0.51%) at a 3-week low. USD/JPY (^USDJPY) is down -0.28 (-0.25%). Tuesday's closes: Dollar Index +0.102 (+0.10%), EUR/USD -0.0010 (-0.09%), USD/JPY -0.82(-0.73%). The dollar index on Tuesday closed higher on continued weakness in GBP/USD which fell to a fresh 6-3/4 year low after BOE Governor Carney acknowledged that there was a chance of Brexit. The dollar was also boosted by weakness in EUR/USD, which fell to a 2-1/2 week low on news that the German Feb IFO business climate index fell -1.6 to 14-month low of 105.7.
Apr WTI crude (CLJ16 -3.42%) this morning is down -$1.14 a barrel (-3.58%) and Apr gasoline (RBJ16 -0.80%) is down -0.0099 (-0.81%). Tuesday's closes: CLJ6 -2.02 (-6.05%), RBJ6 -0.0390 (-3.12%). Apr crude oil and gasoline on Tuesday closed sharply lower on dashed hopes for a production cut after Saudi Arabian oil minister Ali al-Naimi said that Saudi Arabia "isn't cutting output." In addition, Iranian Oil Minister Bijan Namdar Zanganeh said that Russia's and Saudi Arabia's plan to freeze production at current levels was "ridiculous" as it puts "unrealistic demands" on Iran.
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