MarketWatch.com - Pre-Market Indications

Tuesday, July 22, 2008

Pre Market Trader Talk with Bob Pisani

A very mixed earnings picture in the last twelve hours. Yes, AmEx, Apple, and Merck and Texas Instruments disappointed. But DuPont, Suntrust and Packaging Corp. were better than expected. But UPS hit the estimate, and Caterpillar's strong report helped turn the futures up at 7:30 am ET, though we are still down.

Banks:
Wachovia,

WACHOVIA CORP NEW
WB

13.18 UNCH 0
NYSE




[WB 13.18 --- UNCH (0) ]as feared, slashed its quarterly dividend 86 percent, however there was no capital raise. The Golden West deal has turned out to be a mess, as there are large losses there. Down 9 percent. They weren't the only ones cutting the dividend. Regions Financial [RF 10.40 --- UNCH (0) ]cut their dividend, to $0.10 from $0.38. They reported earnings below expectations, $0.39 vs $0.43 analyst estimate.

KeyCorp

KEYCORP
KEY

11.50 UNCH 0
NYSE




[KEY 11.50 --- UNCH (0) ]reported a loss, though not as great as expected. They had previously cut their dividend.

Bottom line: as expected, the regional banks are continuing to increase provisions for loan losses.

Elsewhere:
1) With the disappointment from AmEx

AMERICAN EXPRESS CO
AXP

40.90 UNCH 0
NYSE




[AXP 40.90 --- UNCH (0) ], expect the rest of the credit card companies--Visa, Discovery, Capital One, Mastercard--to trade down, at least at the open.

2) Not great news for the communications sector this morning, as Texas Instruments

TEXAS INSTRUMENTS INC
TXN

28.52 UNCH 0
NYSE




[TXN 28.52 --- UNCH (0) ] disappointing results and guidance below expectations, combined with Vodaphone cutting its revenue outlook, is weighing on the whole sector. Vodaphone and TI down 13 percent pre-open, Erickson trading down.

3) Caterpillar

CATERPILLAR INC
CAT

73.23 UNCH 0
NYSE




[CAT 73.23 --- UNCH (0) ] beat on top and bottom line, and raised full year guidance. Again, the mix of sales is continuing to move overseas: sales outside North America increased 30 percent, while sales in North America increased 7 percent. The 2008 guidance reflects "considerable strength in sales to the developing world."

4) DuPont

DU PONT E I DE NEMOURS & CO
DD

44.05 UNCH 0
NYSE




[DD 44.05 --- UNCH (0) ]beat on top and bottom line, and raised their full year guidance slightly, though the gain seems to be coming from the beat in the second quarter. How much are higher costs hurting them? Local selling prices increased 7 percent, but energy, raw material and freight costs increased 15 percent.

5) Our parent company GE

GENERAL ELECTRIC CO
GE

27.69 UNCH 0
NYSE




[GE 27.69 --- UNCH (0) ]announcing an $8 billion joint venture with Abu Dhabi investing agency Mubadala Investment; says they see becoming one of GE's 10 biggest shareholders; stock trading up pre-open. CEO Jeff Immelt will be on "The Call" at 11 am ET.

6) UPS

UNITED PARCEL SVC INC
UPS

59.46 UNCH 0
NYSE




[UPS 59.46 --- UNCH (0) ]came in in-line, but guidance had already been lowered. The new guidance for the full year is $3.50-$3.70, but they had given $3.90-$4.20 previously.

7) Friedman Billings Ramsey making an interesting call on Microsoft,

MICROSOFT CORP
MSFT

25.64 UNCH 0
NASDAQ




[MSFT 25.64 --- UNCH (0) ]noting that the current buyback is expiring, and urging the company to consider a leveraged buyout, which would take advantage of its $23 billion cash balance and be nicely accretive.



Earnings: Glass Half Empty Or Half Full? - Trader Talk with Bob Pisani - CNBC.com


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