TH: Stock Futures Pull Back as Earnings Season Takes Focus
NEW YORK (TheStreet) -- Stock futures pulled back after Monday's surge as earnings season took focus.
S&P 500 futures were down 0.27%, Dow Jones Industrial Average futures slipped 0.21%, and Nasdaq futures fell 0.38%.
U.S. stocks on Monday rose and the S&P 500 clinched its longest winning streak this year as crude oil prices surged and boosted the energy sector. The benchmark index has gained more than 5% over the past five days after jumping nearly 2% on Monday.
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Third-quarter earnings season won't kick off in earnest until Thursday afternoon with the unofficial kickoff from Alcoa (AA - Get Report) . However, there were a number of earnings reports out before then for investors to chew over.
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The Container Store (TCS - Get Report) shares were more than 10% lower after the storage solutions retailer missed quarterly estimates on its top- and bottom-lines. The company earned 6 cents a share in its second quarter, a penny below estimates, while revenue of $195.5 million fell short of forecasts by $2 million. Sales climbed 1.2% from a year earlier.
PepsiCo (PEP - Get Report) climbed 3% in premarket trading after a better-than-expected third quarter. The company reported organic revenue up 7.4% over the quarter, driven by growth in its Frito-Lay and beverage businesses in North America. However, overall sales fell 5% as foreign exchange reduced its top-line by 12%.
Third-quarter earnings are expected to decline 4.2% from the third quarter a year earlier, according to Thomson Reuters. Similar issues that plagued the second quarter such as a stronger U.S. dollar and lower energy prices are expected to carry over into this quarter. International companies that derive a bulk of their sales overseas, for example, will likely take a hit on the currency exchange.
Skyworks Solutions (SWKS - Get Report) agreed to buy chipmaker PMC-Sierra (PMCS - Get Report) for $2 billion in an all-cash deal. The acquisition is just the latest consolidation in the semiconductor sector. There have been 155 semiconductor takeovers announced since January totalling around $106 billion, six times higher than a year earlier, according to Bloomberg. PMC-Sierra shares surged 30% on the news.
Illumina (ILMN) dropped 15% in premarket trading after reporting disappointing preliminary sales for its third quarter. The DNA sequencing company expects quarterly revenue of $550 million, up 14% from a year earlier but short estimates of $569 million. Illumina said weak instrument sales performance in Europe and the Asia-Pacific was to blame.
DuPont (DD) jumped 5.5% after announcing the retirement of CEO Ellen Kullman who has held the position since 2009. Board member Edward Breen will act as interim CEO until a permanent replacement is found. The company also lowered its full-year earnings outlook to $2.75 a share from $3.10 due to a stronger U.S. dollar and increased competition.
Anheuser-Busch (BUD) shares were lower after SABMiller (SBMRY) reportedly rejected an informal takeover offer. The initial proposal was worth a little over 40 pounds a share, while SABMiller executives are reportedly angling for as high as 45 pounds a share. That would value SABMiller at 73 billion pounds ($110 billion) and represent the largest merger of the year.
