Wall Street appeared reluctant to build on the prior day's gains
Wednesday, as U.S. stock-market futures pointed lower, with a
risk-averse mood creeping in ahead of the two-day European Union
summit.
In high-profile U.S. corporate news, more brokers initiated
coverage on Facebook Inc. (FB) overnight. Shares had yet to respond
significantly in premarket action.
Futures for the Dow Jones Industrial Average fell 7 points to
12479, while those for the S&P 500 index rose 0.5 point to
1316. Futures for the Nasdaq 100 index also were up 0.5 point at
2548.75.
Oil and gold futures were slipping, while the dollar
steadied.
U.S. stocks posted mild gains in a choppy prior session Tuesday,
after home prices posted their first monthly rise since last
autumn. The Dow industrials rose and later fell before ending up
32.01 points, or 0.3%, at 12534.60. The S&P 500 index and the
Nasdaq Composite gained 0.5% and 0.6%, respectively.
Asia stocks finished mostly higher, led by a 1% rally for the
Hang Seng Index, while gains in Europe were tepid on the eve of a
two-day EU summit. Ahead of that Brussels gathering, investors will
also be watching for news from an evening meeting between
Chancellor Angela Merkel and French President Francois Hollande in
Paris.
"In general, it is wait-and-see up to the EU summit," said
Anders Moller Lumholtz, senior analyst at Danske Bank. "Most
analysts and commentators have the view that this is another
disappointment. It's funny this time as expectations are very low.
If we can avoid an open disagreement with Italy's [Prime Minister
Mario] Monti, then the disappointment will end up not being that
big."
Focus will return next week to the European Central Bank, where
many are expecting a cut in rates, said Lumholz.
Amid this expectation, he said, Wall Street is likely to remain
range-bound. More data to come for Wednesday include U.S.
durable-goods orders for May at 8:30 a.m. EDT and pending home
sales for May from the National Association of Realtors at 10 a.m.
EDT.
Shares of Facebook could be in focus after several brokers began
coverage of the Menlo Park, Calif., social-networking operator.
Bank of America Merrill Lynch, Barclays Capital and Citigroup Inc.
(C) began coverage somewhat cautiously, while the bullish case was
outlined by Goldman Sachs Group Inc. (GS).
Best Buy Co. shares (BBY) could be in focus after jumping the
prior day on speculation that the retailer's founder, Richard
Schulze, is exploring a bid to take the company private.
Write to Barbara Kollmeyer at barbara.kollmeyer@dowjones.com
HOT STOCKS TO WATCH
Among the companies with shares expected to actively trade in
Wednesday's session are AeroVironment Inc. (AVAV), O'Reilly
Automotive Inc. (ORLY) and Omeros Corp. (OMER).
AeroVironment's fiscal fourth-quarter earnings edged up 0.9% as
the company recorded an increase in unmanned aircraft revenue,
though margins weakened. Shares jumped 9.1% to $27.75 after hours
as earnings beat analyst expectations and the company issued an
upbeat outlook for the new fiscal year.
O'Reilly said it expects its second-quarter earnings to be at
the low end of its prior estimates, as the auto-parts retailer also
lowered its same-store sales guidance. Shares slumped 8.8% to $88
after-hours Tuesday as the company said June same-store sales
missed its expectations.
Omeros plans to offer an undisclosed number of shares for the
biopharmaceutical company's development of two medical products
being tested for use in eye and knee surgeries and other general
purposes. Shares dropped 14% to $11.35 after hours.
Alexza Pharmaceuticals Inc. (ALXA), which develops treatments
for conditions affecting the central nervous system, said it plans
to offer as much as $40 million in mixed securities, which may
include stock. Shares were off 2.1% to $4.20 after hours.
Campus Crest Communities Inc. (CCG), which develops, builds and
manages college student housing, said it will offer six million
shares. Shares slipped 3.5% to $10.34 after hours.
Watch List:
An Ohio court has granted Aetna Inc.'s (AET) request to
temporarily stop the state from moving forward with its Medicaid
contract process, as the insurer protests an Ohio agency's decision
to cancel an earlier Medicaid contract it was awarded.
Atlantic Power Corp. (AT, ATP.T) said it will offer 5.5 million
shares of its stock, intending to use the proceeds to fund a
recently acquired wind-energy project under construction in
Oklahoma.
Boeing Co. (BA) abruptly changed the chief executive of its
commercial unit on the eve of a major air show where the jet maker
is expected to announce significant orders for a new version of its
737 Max aircraft. Ray Conner, the senior vice president of sales
and customer support for Boeing Commercial Airplanes, was named on
Tuesday to replace Jim Albaugh, 62, once considered a CEO
candidate.
Bristol-Myers Squibb Co. (BMY) has added $3 billion to its share
repurchase program, as the pharmaceutical company looks to boost
shareholder value.
Digital Realty Trust Inc.'s (DLR) upsized offering of 10 million
shares of stock priced at a 0.8% discount to its Tuesday closing
price.
Natural-gas utility Gas Natural Inc. (EGAS) said Chief Executive
Richard M. Osborne will offer 700,000 shares of the company's
stock.
Standard & Poor's Ratings Services downgraded GeoEye Inc.
(GEOY) two notches, saying the satellite-imaging company faces
heightened risk of lower U.S. government revenues.
H&R Block Inc.'s (HRB) fiscal fourth-quarter earnings fell
11%, as higher filing volume was masked by weaker revenue and
losses from discontinued operations.
Liberty Global Inc. (LBTYA, LBTYB), along with investment funds
tied to Searchlight Capital Partners LP, Tuesday agreed to acquire
OneLink Communications, in a roughly $585 million deal expected to
form Puerto Rico's largest cable operator.
Standard & Poor's Ratings Services placed its ratings for
Ryder System Inc. (R) on watch for a possible downgrade after the
truck-leasing company lowered its full-year earnings guidance last
week.
Sealy Corp. (ZZ) swung to a second-quarter profit as the company
posted wider margins, reflecting higher pricing on luxury mattress
sales.
Write to Nathalie Tadena at nathalie.tadena@dowjones.com