<TABLE cellSpacing=0 cellPadding=2 width="100%" bgColor=white border=0 xmlns:msxsl="urn:schemas-microsoft-com:xslt" xmlns:js="http://cbs.markewatch.com/xsl"><TBODY><TR><TD width="100%">S&P 500 futures fell 1.3 points and Nasdaq 100 futures were off 1.5 points.
The world's top retailer, Wal-Mart Stores (WMT: news, chart, profile) , said second-quarter earnings rose 5.8% to a record $2.8 billion, or 67 cents a share, with revenue up 10% to $77.5 billion. The retailing giant's earnings were above Thomson First Call-compiled earnings forecasts of 65 cents a share and met revenue estimates.
Third-quarter earnings estimates are below consensus forecasts, with the consensus view in the middle of its 2005 $2.63 to $2.70 a share view. Wal-Mart shares slid 1.5% in pre-open trade.
Home Depot (HD: news, chart, profile) rose in thin pre-open trade after it beat second-quarter estimates with a 17.1% profit rise to $1.8 billion, or 82 cents a share, on revenue growth of 11.7% to $22.3 billion. The home improvement retailer lifted 2005 earnings guidance, now seeing a rise of 14% to 17% from an earlier view of 10% to 14%, and held revenue guidance at 9% to 12% growth.
Meanwhile, Gateway (GTW: news, chart, profile) tumbled 15% after it said it expects to report a full-year profit of 11 to 13 cents a share, down from a previous forecast of cents to 17 cents a share. The company also lowered its revenue outlook and now expects sales of $3.9 billion to $4 billion, down from a prior forecast of $4 billion to $4.25 billion.
Bear Stearns cut Gateway to underperform from peer perform, citing continued light revenue, a reduced 2005 outlook and weak growth prospects for direct business.
U.S. consumer prices rose to a three-month high, up 0.5% in July, with the increase in the CPI slightly ahead of expectations of a 0.4% gain among Wall Street economists surveyed by MarketWatch.
Construction of new U.S. houses fell 0.1% in July to a seasonally adjusted 2.042 million annualized units, the Commerce Department estimated Tuesday. Starts of new single-family homes rose by 0.5% to a 1.711 million seasonally adjusted annual rate. Economists were looking for starts to inch higher to 2.04 million from the initial estimate last month of 2.004 million units.
Focus stocks
Dick's Sporting Goods (DKS: news, chart, profile) tumbled 8.5% in pre-open trade after warning that third-quarter earnings would be less than half of consensus forecasts.
BJ's Wholesale Club Inc. (BJ: news, chart, profile) reduced its 2005 earnings forecast to $1.85 to $1.91 a share, from $1.87 to $1.95 a share. Wall Street has been expecting $1.87 a share.
Delta Air Lines (DAL: news, chart, profile) soared over 17% in the pre-open, after agreeing to sell Atlantic Southeast Airlines for $425 million.
Staples Inc. (SPLS: news, chart, profile) reported second-quarter earnings of $147.2 million, or 20 cents a share, up from $122.5 million, or 16 cents a share in the same period a year ago, and above the average analyst estimate compiled by Thomson First Call of 19 cents a share. Revenue rose 12% to $3.47 billion from last year's $3.09 billion, vs. analyst forecasts of $3.45 billion. The office supply retailer expects fiscal third-quarter earnings to grow in line with analyst forecasts, and sees 2005 sales growing in the low double-digit percentage range.
United Rentals (URI: news, chart, profile) said it fired its chief financial officer, John Milne, for cause, given his unwillingness to respond to questions related to a U.S. Securities and Exchange Commission investigation. The company said it has begun searching for a new CFO.
J.P. Morgan Chase & Co. (JPM: news, chart, profile) agreed a settlement over Enron, paying $350 million cash, plus $660 million in claims payments, to the bankrupt estate in a move that's not expected to a have a material impact on earnings.
Anglo-Caribbean telecom Cable & Wireless PLC (CWP: news, chart, profile) confirmed it's headed off a late challenge from Britain's Thus Group PLC to buy Energis for 594 million pounds ($1.07 billion) in cash. See story.
Broker calls
Northwest Airlines (NWAC: news, chart, profile) was upgraded to overweight from equal weight at Morgan Stanley, which believes the air carrier will be successful in avoiding bankruptcy
Deutsche Bank upgraded cereal company Kellogg Co. (K: news, chart, profile) to buy from hold and raised its target price to $52 from $49. The broker told clients the changes are meant to reflect continued strong fundamentals, an attractive valuation and the likelihood of stability in the senior management team. Deutsche said it was initially concerned that the departure of Chief Executive Gutierrez would cause disruptions and the turnover of senior management executives who may have been overlooked for the top job. But after spending time with the new management team, the broker said it's more confident that it will remain stable.
UBS cut specialty retailer CarMax, Inc. (KMX: news, chart, profile) to reduce from neutral, citing a potential decline in used-car sales, more challenging comparisons in the second half and valuation. The broker told clients that the recent consumer shift to new cars from used cars is likely to have a big impact on CarMax.
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Steve Goldstein is MarketWatch's London bureau chief.
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The world's top retailer, Wal-Mart Stores (WMT: news, chart, profile) , said second-quarter earnings rose 5.8% to a record $2.8 billion, or 67 cents a share, with revenue up 10% to $77.5 billion. The retailing giant's earnings were above Thomson First Call-compiled earnings forecasts of 65 cents a share and met revenue estimates.
Third-quarter earnings estimates are below consensus forecasts, with the consensus view in the middle of its 2005 $2.63 to $2.70 a share view. Wal-Mart shares slid 1.5% in pre-open trade.
Home Depot (HD: news, chart, profile) rose in thin pre-open trade after it beat second-quarter estimates with a 17.1% profit rise to $1.8 billion, or 82 cents a share, on revenue growth of 11.7% to $22.3 billion. The home improvement retailer lifted 2005 earnings guidance, now seeing a rise of 14% to 17% from an earlier view of 10% to 14%, and held revenue guidance at 9% to 12% growth.
Meanwhile, Gateway (GTW: news, chart, profile) tumbled 15% after it said it expects to report a full-year profit of 11 to 13 cents a share, down from a previous forecast of cents to 17 cents a share. The company also lowered its revenue outlook and now expects sales of $3.9 billion to $4 billion, down from a prior forecast of $4 billion to $4.25 billion.
Bear Stearns cut Gateway to underperform from peer perform, citing continued light revenue, a reduced 2005 outlook and weak growth prospects for direct business.
U.S. consumer prices rose to a three-month high, up 0.5% in July, with the increase in the CPI slightly ahead of expectations of a 0.4% gain among Wall Street economists surveyed by MarketWatch.
Construction of new U.S. houses fell 0.1% in July to a seasonally adjusted 2.042 million annualized units, the Commerce Department estimated Tuesday. Starts of new single-family homes rose by 0.5% to a 1.711 million seasonally adjusted annual rate. Economists were looking for starts to inch higher to 2.04 million from the initial estimate last month of 2.004 million units.
Focus stocks
Dick's Sporting Goods (DKS: news, chart, profile) tumbled 8.5% in pre-open trade after warning that third-quarter earnings would be less than half of consensus forecasts.
BJ's Wholesale Club Inc. (BJ: news, chart, profile) reduced its 2005 earnings forecast to $1.85 to $1.91 a share, from $1.87 to $1.95 a share. Wall Street has been expecting $1.87 a share.
Delta Air Lines (DAL: news, chart, profile) soared over 17% in the pre-open, after agreeing to sell Atlantic Southeast Airlines for $425 million.
Staples Inc. (SPLS: news, chart, profile) reported second-quarter earnings of $147.2 million, or 20 cents a share, up from $122.5 million, or 16 cents a share in the same period a year ago, and above the average analyst estimate compiled by Thomson First Call of 19 cents a share. Revenue rose 12% to $3.47 billion from last year's $3.09 billion, vs. analyst forecasts of $3.45 billion. The office supply retailer expects fiscal third-quarter earnings to grow in line with analyst forecasts, and sees 2005 sales growing in the low double-digit percentage range.
United Rentals (URI: news, chart, profile) said it fired its chief financial officer, John Milne, for cause, given his unwillingness to respond to questions related to a U.S. Securities and Exchange Commission investigation. The company said it has begun searching for a new CFO.
J.P. Morgan Chase & Co. (JPM: news, chart, profile) agreed a settlement over Enron, paying $350 million cash, plus $660 million in claims payments, to the bankrupt estate in a move that's not expected to a have a material impact on earnings.
Anglo-Caribbean telecom Cable & Wireless PLC (CWP: news, chart, profile) confirmed it's headed off a late challenge from Britain's Thus Group PLC to buy Energis for 594 million pounds ($1.07 billion) in cash. See story.
Broker calls
Northwest Airlines (NWAC: news, chart, profile) was upgraded to overweight from equal weight at Morgan Stanley, which believes the air carrier will be successful in avoiding bankruptcy
Deutsche Bank upgraded cereal company Kellogg Co. (K: news, chart, profile) to buy from hold and raised its target price to $52 from $49. The broker told clients the changes are meant to reflect continued strong fundamentals, an attractive valuation and the likelihood of stability in the senior management team. Deutsche said it was initially concerned that the departure of Chief Executive Gutierrez would cause disruptions and the turnover of senior management executives who may have been overlooked for the top job. But after spending time with the new management team, the broker said it's more confident that it will remain stable.
UBS cut specialty retailer CarMax, Inc. (KMX: news, chart, profile) to reduce from neutral, citing a potential decline in used-car sales, more challenging comparisons in the second half and valuation. The broker told clients that the recent consumer shift to new cars from used cars is likely to have a big impact on CarMax.
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Steve Goldstein is MarketWatch's London bureau chief.
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