US Markets To Open Positively After Fed; Alibaba And Oracle Eyed

US markets are setting up to open positively despite some more tenuous Chinese economic data overnight in the knowledge that the Fed will keep rates close to zero for a substantial period of time. With overall market risk subsiding, investors will be eyeing individual stocks news with the final pricing of Alibaba Group Holdings Ltd (NYSE:BABA)’s IPO and earnings from Oracle Corporation (NYSE:ORCL), ConAgra Foods Inc (NYSE:CAG) and Rite Aid Corporation (NYSE:RAD).

Futures suggest the Dow 30 will open 30 points higher at 17,186 with the S&P 500 expected to open 4 points higher at 2,005 and theNASDAQ Composite  5 points higher at 4,078.

Alibaba is expected to finalise its price today after the New York close, it is currently in a range of $66-68 per share. The top of that range would raise almost $22bn and if underwriters exercise an option to sell more, it could become the biggest IPO ever. A price of $66 could put the P/E at close to 41, much higher than the S&P 500 average of 19 but comparable with other tech growth stocks like Facebook Inc (NASDAQ:FB) which is over 80 and Amazon.com Inc (NASDAQ:AMZN) at 135 by some estimates.

The company is growing fast, revenues grew by 49% last year and the numbers are not small, in the second quarter it earned an impressive profit margin of $2bn on $2.5bn in revenue. The company already turns over $250bn in merchandise so stock really becomes a proxy for Chinese economic growth and domestic consumption because to keep growing when the sales are already this big, the whole Chinese economy will have to grow with it.

Oracle is expected to have earned 64c per share on revenue of $8.78bn reporting after the close. Shares recently stalled out at just above $43 and failed to break through on a second attempt mimicking similar price action in the S&P 500. The company continues to growth both top and bottom lines but missed estimates in the last quarter as like others in the tech space, the company tries to get a foothold in cloud computing.

With food prices falling and after expanding internationally through the acquisition of TaiMei Potato Industry, ConAgra Foods is expected to earn 35c per share on revenue of $3.73bn reporting before the open.

After reporting pharmacy same store sales increasing over 5% in August, Rite Aid is thought to have earned 6c per share on revenue of $6.48bn in its report released before the open.



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