Stock Market Preview & Hot Stocks

Stocks are indicating higher this morning, with the SPDR S&P 500 (NYSE: SPY) up a half point in the pre-market. European shares moved higher today on a positive U.K. manufacturing report and after euro-zone officials took steps to protect Spanish banks; the EURO STOXX 50 is up 1.1% at this hour. The Nikkei and Hang Seng moved lower today.

Data Driving US Stocks
Small businessmen weighed in this morning on the state of the economy, offering a clear warning. The NFIB Small Business Optimism Index declined markedly in June to a reading of 91.4, down from 94.4 in May. Economists surveyed by Bloomberg had expected the index to fall to a mark of 92.0. Small businesses employ the majority of the American workforce, and fewer small businesses had plans to hire while less posted open positions in June. The report also indicated significantly declined plans to make capital investments. Their earnings trends are lower and they have dampened expectations for the economy. The report is clearly a weight on stocks Tuesday.

The International Council of Shopping Centers (ICSC) indicated some improved consumer spending in the week ending July 7, 2012, as same-store sales increased 2.0% week-to-week and 3.0% against the prior year period. It’s moderately positive news considering the last few weeks’ poor results. For instance, last week’s report covering the period ending June 30th showed a 0.2% week-to-week sales increase and a meek 1.4% year-to-year gain. I still believe there’s a bad moon rising over the American consumer though, and the most recent chain store sales reports for the month of June seemed to concur.

Same-store sales at 20 retailers surveyed by Retail Metrics rose 0.3% in June, versus analyst expectations for a 1.0% increase. Discount chains continued to excel due to the economic situation, with names like TJX (NYSE: TJX) reporting strong gains. TJX saw sales rise 7% through the month. This is the reason I recently suggested investors review these 5 stocks for when consumers check out, highlighting Dollar Tree (Nasdaq: DLTR), Wal-Mart (NYSE: WMT), eBay (Nasdaq: EBAY), Amazon.com (Nasdaq: AMZN) and Cash America (NYSE: CSH) for obvious reasons. Retailers like Macy’s (NYSE: M) and Target (NYSE: TGT) missed analysts’ expectations in June, while luxury goods retailers like Saks (NYSE: SKS) excelled. I expect that trend to continue.

For purely entertainment purposes, you’ll want to tune in to C-SPAN Tuesday in order to catch two of those congressional testimonies that raise the blood pressure and incite nausea, at least for me. The House Ways and Means Committee will hoot and holler about the recent Supreme Court health care ruling. The escapade promises the usual bickering and bolstering of party politics. Nothing can change, but they’ll go through the process anyhow, which can only be bad for market confidence, given the important tax issues being pushed forward because of this use of resources. And don’t miss the House Financial Services Committee hearing on the impact of Dodd-Frank either today.

St. Louis Fed Bank President James Bullard spoke at the OMFIF Golden Series Lecture in London. Bullard’s speech is viewable here. Perhaps most notable is Bullard’s acknowledgement of all the devils we’ve been warning about, including the obvious, Europe, and the not so clear we’ve warned about as well, China and the U.S. This data, though, may help the market, as it looks forward to the next Fed action. Also, Ecofin meets today to discuss the EU summit moves.

Hot Stocks
Alcoa (NYSE: AA) reported last evening, and is up fractionally in the pre-market. The company beat analysts’ estimates, benefiting from auto and airline orders. The stock’s earlier gains post-market yesterday have been somewhat erased, as the market focuses on the deteriorating current situation globally.

Advanced Micro Devices (NYSE: AMD) said its sales fell about 11% last quarter against the first quarter. The stock was down 8.9% in the pre-market, and the stock market should likewise be impacted, because AMD blamed Europe and China for its issues.

Coal producers are lower today after Patriot Coal Corporation's (NYSE: PCX) bankruptcy filing. Arch Coal (NYSE: ACI) is lower 2.6%, Alpha Natural Resources (NYSE: ANR) is down 2.0% and Peabody Energy (NYSE: BTU) is lower by 1.2%. I’ll have more to say on coal in a follow up focused report on the sector in coming weeks.

MAKO Surgical (Nasdaq: MAKO) is down 40% in the pre-market, after the company cut its outlook due to first half sales that fell short of expectations. MAKO makes robotic surgery instruments and systems focusing on orthopaedic surgery knee arthroplasty and competes with Intuitive Surgical (Nasdaq: ISRG), a company I followed and recommended in its early days to market.

Tech geeks are congregating at Semicon West to see what new computer chip breakthroughs have been accomplished and are on the way. The earnings schedule has confirmed EPS reports from Helen of Troy (Nasdaq: HELE), Hi-Tech Pharmacal (Nasdaq: HITK), OCZ Technology Group (Nasdaq: OCZ), Penford (Nasdaq: PENX), Rocky Mountain Chocolate Factory (Nasdaq: RMCF), SemiLEDS (Nasdaq: LEDS), Shaw Group (Nasdaq: SHAW), Synergy Resources (Nasdaq: SYRG), VOXX International (Nasdaq: VOXX), Wolverine World Wide (NYSE: WWW) and Zep, Inc. (NYSE: ZEP).

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