Pre-Market Report: Swine Flu Fears Hit Airlines, Help Pharma

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 |  Includes: AAL, CCL, GLW, GM, GNBT, NVAX, QCOM, TZOO, VZ
by: Midnight Trader

U.S. PRE-MARKET INDICATORS

-Dow Industrial futures down 150 points.

-S&P 500 futures down 16 points.

-Nasdaq 100 futures down 20 points.

-Nasdaq-100 Pre-Market Indicator down 3.84 at 1369.44

GLOBAL SENTIMEN
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Nikkei up 0.2%

Hang Seng down 2.7%

FTSE down 0.8%

PRE-MARKET SECTOR WATCH

(+,-) Large cap tech: mixed

(-) Chip stocks: lower

(-,+) Small cap stocks: mixed

(+) Drug stocks: mostly higher

(-) Software stocks: lower

(+,-) Internet stocks: mixed

(-) Financial stocks: lower

(+) Auto stocks: higher

(-) Airline stocks: lower

(+,-) Retail stocks: mixed

UPSIDE MOVERS

(+) Novavax (NASDAQ:NVAX) (+146%), Generex Biotechnology (OTCQB:GNBT) (+108%) jumping on prospects for sales of flu drug.

(+) General Motors (NYSE:GM) (+8%) annouces debt-for-stock swap.

(+) Corning (NYSE:GLW) (+2.7%) tops with Q1 results.

(+) Qualcomm (NASDAQ:QCOM) (+3.2%) beats with revenue.

DOWNSIDE MOVERS


(-) Verizon (NYSE:VZ) (-0.7%) beats with Q1 results.

(-) Travelzoo (NASDAQ:TZOO) (+10%) beats with Q1 results.

(-) Carnival Corp. (NYSE:CCL) (-9.3%) falling on swine flu fears.

(-) US Airways (LCC) (-10.7%) falling on swine flu fears.

MARKET DIRECTION

U.S. futures remain lower as global stocks get stung from refreshed recession worries should a deadly swine flu outbreak, concentrated so far in Mexico, become a pandemic. Airlines shares are among the biggest decliners, while select pharmaceutical shares are higher.

The Mexican peso dropped nearly 3% against the U.S. dollar, and the dollar more generally was stronger against most rivals, getting a safe-haven bid. Yields on 10-year Treasury bonds dropped 5 basis points to 2.95%. Crude futures tumbled $2.65 to $48.90 a barrel.

Separately, General Motors (GM) is a gainer as it announces a stock offering as part of another leg of its restructuring.

GM will offer $27 billion in common stock to its debt holders as part of a restructuring plan. According to an SEC filing, GM will offer 225 shares of common stock to each $1,000 of debt. The automaker values the offer at $27.2 billion, and has set a deadline for debt holders to respond by May 26.

"Exchange offers are a vital component of GM's overall restructuring plan to achieve and sustain long-term viability and the successful consummation of the exchange offers will allow GM to restructure out of bankruptcy court," the company said in a statement. The White House is out with a statement welcoming the move.

Earnings continue to flow. Among them this morning, Verizon (VZ) reports Q1 adjusted EPS of $0.63 per share, four cents ahead of expectations. Revs were $26.6 bln, just ahead of the Street view of $26.3 bln.