DJIA Headed Higher on Greek Bailout Measures; Retail Earnings in Focus

Comment

Shutterstock photo

With no notable economic reports on tap for today, Wall Street is turning their attention across the pond, as euro-zone finance leaders have finally hashed out a plan to give debt-ridden Greece much-needed fiscal support. Specifically, Greece will be provided with approximately 130 billion euros, or $172.1 billion, of financial aid through 2014. In addition, private investors have agreed to write down around 53% of their holdings in Greek debt, more than the initial 50% previously forecast. On the home front, retail earnings season kicks off this week, with big names such as Home Depot (HD ) and Wal-Mart Stores (WMT ) taking their turn in the confessional. Against this backdrop, all three major market indexes are set to continue last week's trek higher .

Dow, S&P and Nasdaq futures

In earnings news, The Home Depot, Inc. (HD - 46.71) said its fourth-quarter earnings arrived at $774 million, or 50 cents per share, a 32% year-over-year increase from $587 million, or 36 cents per share. Sales jumped 5.9% to $16.01 billion, boosted by a 5.7% improvement in same-store sales. The results came in better than expected, as analysts were calling for a per-share profit of 42 cents on $15.51 billion in revenue. Looking ahead, HD is projecting a full-year profit of $2.72 per share, or $2.79 per share after stock repurchasing, on 4% growth in sales. Wall Street, meanwhile, is predicting 2012 earnings of $2.77 per share on 4% revenue growth. HD is trading 3.5% higher ahead of the bell.

Wal-Mart Stores, Inc. (WMT - 62.48) recorded a fourth-quarter profit of $5.16 billion, or $1.50 per share, a 15% drop from its year-ago profit of $6.06 billion, or $1.70 per share. Excluding items, earnings arrived at $1.51 per share. Sales, meanwhile, rose 5.9% to $123.17 billion. The bottom-line results beat analysts' forecast for adjusted earnings of $1.45 per share; however, WMT's top line fell below the $124.21 billion Wall Street had predicted. Going forward, WMT is calling for current-quarter earnings to range between $1.01 and $1.06 per share, with a fiscal 2013 projection of $4.72 to $4.92 per share. Analysts are forecasting first-quarter and full-year earnings to arrive at $1.05 and $4.90 per share, respectively. WMT is down 2.4% in pre-market trading.

Finally, Kraft Foods Inc. (KFT - 38.01) this morning reported fourth-quarter earnings of $830 million, or 47 cents per share, a 54% rise from last year's profit of $540 million, or 31 cents per share, thanks to higher prices. Revenue increased 6.6% to $14.69 billion. The results fell short of analysts' expectations for a per-share profit of 57 cents on revenue of $14.79 billion. KFT is looking to start the session with a 0.9% lead.

Earnings Preview

Today's earnings docket will also feature reports from Dell ( DELL ), Macy's ( M ), Barnes & Noble ( BKS ), Boyd Gaming ( BYD ), Brocade Communications Systems ( BRCD ), Cheesecake Factory (CAKE), Chesapeake Energy (CHK), Community Health Systems (CYH), Cracker Barrel (CBRL), Dollar Thrifty Automotive (DTG), Genco Shipping & Trading (GNK), Grand Canyon Education (LOPE), Hecla Mining (HL), Herbalife (HLF), Medtronic (MDT), RadioShack (RSH), Saks (SKS), Sourcefire (FIRE), and Walter Energy (WLT). Keep your browser at SchaeffersResearch.com for more news as it breaks.

Economic Calendar

There are no major economic reports today, while Wednesday's calendar features the latest data on existing home sales. On Thursday, we'll hear the usual report on weekly jobless claims, along with the holiday-delayed update on domestic crude inventories. Also on tap is the FHFA housing price index. The week wraps up on Friday with the final Thomson Reuters/University of Michigan consumer sentiment index for February, as well as new home sales data.

Market Statistics

Equity option activity on the Chicago Board Options Exchange (CBOE) saw 1,838,584 call contracts traded on Friday, compared to 934,527 put contracts. The resultant single-session put/call ratio arrived at 0.51, while the 21-day moving average was 0.60.

NYSE and Nasdaq summary

Volatility indices

Overseas Trading

Asian markets ended mixed today, despite the approval of a second bailout package for Greece. Automakers were a pocket of weakness in Japan, following an impressive rally by exporters on Monday. Among individual names, Mazda paced the sector-wide decline on reports that the company may issue stock to raise capital. Elsewhere, telecoms trekked higher in Hong Kong after China Telecom announced the impending debut of the iPhone 4S on its network. By the close, South Korea's Kospi retreated 0.03%, Japan's Nikkei slipped 0.2%, Hong Kong's Hang Seng gained 0.3%, and China's Shanghai Composite climbed 0.8%.

The major European indexes are mixed at midday, as traders digest the euro zone's hard-fought Greek bailout pact. While the imminent threat of disorderly default has been averted for now, traders are nonetheless taking the opportunity to pull some cash off the table. At last check, the German DAX is down 0.8%, the French CAC 40 has shed 0.7%, and London's FTSE 100 is 0.2% higher.

Overseas markets

Currencies and Commodities

The U.S. dollar index is trading lower this morning, with the greenback last seen 0.2% lower at $79.19. Continuing in its quest higher , crude oil is up 1.2% at $104.85 per barrel. Gold futures are also pointed north, with the malleable metal up 0.7% at last check to trade at $1,738.60 an ounce.

Currencies and commodities

Unusual Put and Call Activity:

For an explanation of how to use this information, check out our Education Center topics on Option Volume and Open Interest Configurations .

Unusual options activity - puts

Unusual options activity - calls

Every morning, our research staff analyzes the prior day and the overnight markets, and monitors the morning wires to give you an accurate preview of the day to come. If you enjoyed today's edition of Opening View, sign up here for free daily delivery, straight to your inbox, before the opening bell.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

All Rights Reserved. Unauthorized reproduction of any SIR publication is strictly prohibited.



This article appears in: Investing , Options
More Headlines for: BKS , BRCD , BYD , DELL , M


More from Schaeffer's Investment Research

Subscribe






Schaeffer's Investment Research
Contributor:

Schaeffer's Investment Research

Market News
Follow on:

Find a Credit Card

Select a credit card product by:
Select an offer:
Search
Data Provided by BankRate.com