By Polya Lesova
Caution dominated on Friday, with U.S. stock futures trading flat, as traders awaited a key report expected to show a decline in July nonfarm payrolls and offer more clues on the pace of the economic recovery.
Futures on the Dow Jones Industrial Average traded down 1 point at 10,634. S&P 500 futures were virtually unchanged at 1,123.80 points and Nasdaq 100 futures were also flat at 1,902
U.S. stocks ended marginally lower on Thursday, with the Dow (DJI) edging down 0.05% and the S&P 500 index (SPX) dropping 0.1%.
The Labor Department will release its closely watched report on nonfarm payrolls at 8:30 a.m. Eastern time. Total payrolls are expected to have declined by 60,000 in July after falling 125,000 in the previous month. The unemployment rate likely rose to a seasonally adjusted 9.6% from 9.5% in June.
"All eyes will be on private payrolls given the headline distortion around census hiring," said strategists at Deutsche Bank in a note.
Economists expect the private sector added 100,000 jobs in July. This will be higher than the 83,000 jobs created in June.
"A poor payrolls number today could raise fears about the U.S. recovery and this could spur investors to reduce their portfolio of risky asset classes," said Joshua Raymond, market strategist at City Index, in a note to clients.
On the corporate front, American International Group Inc. (AIG) will report second-quarter results before the market opens. The firm is expected to have earned 98 cents a share on revenue of $15.63 billion, according to analysts polled by FactSet.
Berkshire Hathaway Inc. (BRKA) will release results after the market closes.
The Europe Stoxx 600 index edged up 0.1% to 261.67 points. Investors digested several reports from European banking and insurance groups.
Royal Bank of Scotland Group PLC (RBS), the U.K. bank that's 83%-owned by the government, said it returned to profit in the second quarter. Shares of RBS advanced 1.8% in London trading.
German insurance firm Allianz SE (ALV.XE) reported a 46% drop in second-quarter net profit, but its operating profit rose 23% to 2.19 billion euros. The company's shares gained 0.8% in Frankfurt.
In Belgium, shares of banking group Dexia SA (DEXB.BT) dropped 3.4% after it reported a decline in quarterly net profit.
On the economic front, Italy's gross domestic product expanded by 0.4% in the second quarter compared to the first three months of the year, meeting forecasts, preliminary data showed. GDP grew by 1.1% year on year, slightly short of expectations.
The euro slightly lower at $1.3174. The dollar index, which tracks the performance of the greenback against a basket of other major currencies, was also little changed at 80.891.
In the commodity markets, September oil futures edged down 18 cents to $81.83 a barrel in electronic trading on Globex. Gold futures fell $3 to $1,196.30 an ounce.
On the Chicago Board of Trade, September wheat futures gained 9 cents, or 1%, to $7.95 a bushel. The contract surged Thursday after Russia imposed a temporary ban on its grain exports amid a devastating drought.
-By Polya Lesova; 49 69 29725517; AskNewswires@dowjones.com
Among the companies whose shares are expected to actively trade in Friday's session are Kraft Foods Inc. (KFT), La-Z-Boy Inc. (LZB) and Activision Blizzard Inc. (ATVI).
Kraft's second-quarter profit grew 13% on a sharp increase in revenue, largely because of the company's acquisition of Cadbury, while margins also improved. Bottom-line results topped Wall Street's expectations, sending shares of Kraft--which affirmed its 2010 earnings outlook--up 3% to $30.55 in late trading.
La-Z-Boy said a number of production disruptions, as well as high raw-materials costs, hurt results for the latest quarter, putting them below analysts' expectations. Shares of the furniture company fell 11% to $7.58 after hours.
Activision Blizzard's second-quarter profit rose 12% on an increased impact from deferred revenue as the video-game publisher said sales from online channels exceeded those from retail outlets for the first time. While reiterating its view for the year, Activision gave a weak third-quarter view excluding impacts from deferred revenue. Shares fell 6.5% to $10.99 in after-hours trading.
Hansen Natural Corp.'s (HANS) second-quarter profit grew 11% on continued strong sales of its Monster Energy drink. Shares climbed 5.9% to $43.94 in after-hours trading as the all-natural soda and juice maker's results topped Wall Street's expectations.
Blue Nile Inc.'s (NILE) second-quarter profit slid 1.4%, missing analysts' expectations, as the online jeweler reported lower margins, which masked higher sales. Shares were down 11% to $42.20 in after-hours trading as the company trimmed its full-year view.
Warnaco Group Inc.'s (WRC) second-quarter earnings jumped 69% as the apparel maker's sales growth gained momentum, besting analysts' estimates for both. Shares rose 1.1% to $43.75 after hours as the company boosted its 2010 guidance from its already-raised May outlook.
Kodiak Oil & Gas Corp. (KOG) swung to a second-quarter profit as oil output doubled and prices soared. Still, the oil-and-gas producer's results missed Wall Street's expectations and shares fell 4.3% to $3.34 in late trading.
Assured Guaranty Ltd.'s (AGO) swung to a second-quarter profit as credit derivatives helped the bottom line rather than decimated it, while the bond insurer's core profit beat analysts expectations. Shares gained 8.7% to $17.50 after hours.
Crocs Inc. (CROX) swung to a second-quarter profit on year-earlier restructuring charges and write-downs as well as better-than-expected global revenue growth and improved margins. The shoe maker's shares climbed 9.5% to $13.78 in after-hours trading as the results easily topped estimates and it projected third-quarter results above analysts' estimates.
PerkinElmer Inc.'s (PKI) second-quarter profit nearly tripled, topping forecasts, on strong revenue growth in the environmental health division. The company, which sells analytical products and services to the health-care and industrial sectors, again raised its earnings forecast for the year. Shares rose 3.2% to $20.70 after hours.
Harman International Industries Inc. (HAR) swung to a fiscal fourth-quarter profit--its third in a row--as the maker of auto equipment and GPS devices continued to report strong sales growth and benefited from improved margins on cost cutting. But shares plunged 11% to $30.10 after hours.
Rosetta Stone Inc. (RST) swung to a second-quarter profit, but the language-learning company gave a pessimistic outlook for the current quarter and full year. Shares were down 9.7% to $19.44 in after-hours trading.
CEC Entertainment Inc.'s (CEC) second-quarter profit dropped 47% on lower sales and margins. Shares fell 10% to $31 in after-hours trading as results for the parent of the Chuck E. Cheese chain were far short of Wall Street's expectations.
PharMerica Inc.'s (PMC) second-quarter profit dropped 86% on lower sales and margins as well as a one-time charge. Shares sank 12% to $11.20 in after-hours trading as results for the pharmacy-services provider fell short of Wall Street's expectations, and as the company cut its 2010 guidance.
Nanometrics Inc. (NANO) swung to a second-quarter profit--and posted record per-share earnings--on a big jump in sales and sharply higher margins. Shares shot up 14% to $11.30 in late trading as the results for the maker of systems used in the production and packaging of semiconductors far exceeded Wall Street's expectations.
Watch List
Sotheby's (BID) second-quarter profit soared on rebounding sales as the auction market continued its recovery, though margins declined. The art auction house's results topped Wall Street's expectations.
Consolidated Edison Inc.'s (ED) second-quarter earnings climbed 22%, as the utility raised its outlook for the year.
Public Storage's (PSA) second-quarter earnings fell 36% on a foreign-exchange loss as the real-estate investment trust managed to report surprise revenue growth.
Great Plains Energy Inc.'s (GXP) second-quarter earnings surged 90% on higher rates and demand driven by warmer weather, as the utility operator's results beat expectations. It also raised its outlook for 2010 earnings by a dime.
CF Industries Holdings Inc.'s (CF) second-quarter profit dropped 51% on charges related to its $4.7 billion takeover of rival Terra in April.
Mohawk Industries Inc.'s (MHK) second-quarter profit climbed 47% on price increases and benefits from cost-cutting. Earnings for the manufacturer of carpet and other floor coverings topped Wall Street's expectations.
Southwestern Energy Co.'s (SWN) second-quarter profit ticked up 0.8% as higher production was offset by lower prices and increased costs. The natural-gas producer also backed its previous 2010 production guidance, which it cut in April, citing bad weather that limited the number of wells it could drill in the first quarter.
Weingarten Realty Investors' (WRI) second-quarter profit tumbled 93% on a write-down as well as lower revenue and occupancy. Still, the owner of shopping centers and warehouses' results edged analysts' expectations.
-By Dow Jones Newswires; write to hotstocks@dowjones.com
From The Wall street Journal published on AUGUST 6, 2010, 6:07 A.M. ET