U.S. stock futures slipped Wednesday as investors balanced a wave of bank earnings with news of a Chinese clampdown on lending. A decline in U.S. housing starts also impacted. See story.
Global markets
Chinese stocks sold off sharply after the China Securities Journal reported that some banks had been told to stop lending this month. That news also affected miners in Europe.
See Europe Markets for more.See Asia Markets for more.
Broker action
Jefferies & Co. upgraded CBS Corp. (CBS 13.43, +0.17, +1.28%) to buy from hold, citing improving advertising trends and a reasonable valuation. The broker said recent strength in ad pricing means more advertisers are likely to pay upfront for their slots, rather than facing uncertainty and potentially higher prices buying space on the so-called scatter market. Jefferies said that in the third quarter of 2009, ad buyers were placing ads within a few days of air time, whereas now visibility is closer to four weeks.
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Several banks reported results, with Wells Fargo (WFC 28.65, +0.37, +1.31%) returning to profitability and Bank of New York Mellon (BK 30.41, +0.88, +2.98%) reporting a profit surge, while Morgan Stanley (MS 30.81, -0.35, -1.12%) saw a profit decline and Bank of America (BAC 16.43, +0.11, +0.67%) reported a $5.2 billion loss in a period marked by TARP repayments and growing revenue.
Upscale handbag designer Coach Inc. (COH 35.03, -2.42, -6.46%) said that its fiscal second-quarter profit rose to $241 million, or 75 cents a share, from $216.9 million, or 67 cents a share, a year earlier. Sales in the quarter ended Dec. 26 increased to $1.07 billion from $960.3 million. North American same-store sales rose 3.2%. Analysts, on average, estimated Coach would earn 72 cents a share on sales of $1.02 billion, according to FactSet.
IBM late Tuesday reported a 9% increase in fourth-quarter profit to $4.8 billion, or $3.59 a share, as revenue rose to $27.23 billion from $27 billion. Analysts surveyed by Thomson Reuters, who had forecast IBM to earn $3.47 a share on sales of $26.96 billion. IBM said that for its 2010 fiscal year, it expects to earn at least $11 a share. Analysts had been expecting $10.88 per share for the year, on average.
Prices at the wholesale level in December rose 0.2%, largely due to a sharp jump in food costs, the Labor Department reported Wednesday. Core producer prices, excluding volatile food and energy costs, were unchanged. Economists surveyed by MarketWatch expected a decline of 0.1% in overall PPI and a 0.1% increase in the core rate.
U.S. housing starts fell 4% in December, and for 2009 housing starts dropped 39%.
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