Bulls are riding yesterday's wave of
, with futures on all three major market indexes pointed higher
this morning. Financials remain in focus, as traders digest the
results of Tuesday's stress tests for the country's major banks --
with such notables as JPMorgan Chase & Co. (JPM ) and Citigroup
(C ) reaching decidedly different conclusions. The results were
promising for the majority of banks, with JPM showing the strength
of its recession-proof resolve through a dividend hike and a
$15-million buyback program. However, C is set to start the session
with a 4% drop, after it was found that the financial institution's
available capital is insufficient to withstand the Fed's worst-case
scenario. Against this backdrop, the Dow Jones Industrial Average
(DJIA) is on track to comfortably extend its lead above the 13,000
mark, while the broader S&P 500 Index (SPX) is looking at a
more modest 6-point gain.
In earnings news, Pacific Sunwear of California, Inc. (PSUN -
2.51) said its fourth-quarter loss widened to $38.1 million, or 56
cents per share, from last year's loss of $35.2 million, or 53
cents per share. Excluding items, PSUN posted a slimmer deficit of
19 cents per share.
Store closing costs
and weaker sales weighed heavily on the results, with net sales
declining 1.4% to $234.2 million. The results fell short of the
Street's expectations for a loss of 22 cents per share on sales of
$245.4 million. For the current quarter, PSUN is calling for a loss
of 26 cents to 34 cents per share, versus analysts' projections for
a loss of 24 cents per share. PSUN is set to drop nearly 13% right
out of the gate.
Medifast (MED - 16.70) banked a fourth-quarter profit of $1.2
million, or 8 cents per share, down 66% from $3.4 million, or 23
cents per share, in the comparable quarter of 2010. The company
attributed the decline to expansion costs. Meanwhile, revenue rose
by 10% to $69.6 million. The results came as a disappointment, with
consensus expectations calling for earnings of 21 cents per share
on sales of $71 million. Looking ahead, MED is forecasting a
current-quarter profit of 36 cents to 38 cents per share on revenue
of $86.5 million to $88.5 million. Analysts, however, are
predicting earnings of 45 cents per share on $83 million in
revenue. MED is down 7% in pre-market trading.
Finally, FXCM Inc. (FXCM - 10.50) reported an adjusted
fourth-quarter profit of $20.7 million, or 28 cents per share, up
from last year's earnings of $18.1 million, or 24 cents per share.
Revenue for the quarter increased 13% to $108.8 million. Retail
trading volume was up 16% to $972 billion, while institutional
volume surged 126% to $429 billion. The online broker's results
surpassed expectations, as analysts, on average, were looking for a
profit of 17 cents per share on $104.3 million in revenue. FXCM is
trading 7% higher ahead of the bell.
Today's earnings docket will also feature reports from Alliance
HealthCare Services (
), GeoResources (
), Global Sources (
), Sterling Construction (
), Guess (
), rue21 (RUE), and Vera Bradley (VRA). Keep your browser at
for more news as it breaks.
The MBA mortgage index will hit the Street today, along with
import and export prices, and the regularly scheduled crude
inventories report. Thursday's round-up will include weekly jobless
claims, the Empire State manufacturing index, the Philadelphia
Fed's manufacturing index, and the producer price index (PPI). The
week wraps up on Friday with the consumer price index (CPI),
industrial production and capacity utilization, and the Thomson
Reuters/University of Michigan consumer sentiment index for
Equity option activity on the Chicago Board Options Exchange
(CBOE) saw 1,467,374 call contracts traded on Tuesday, compared to
888,293 put contracts. The resultant single-session put/call ratio
arrived at 0.61, while the 21-day moving average was 0.64.
Asian markets ended mixed today, with Hong Kong and China
underperforming after some coolly received comments from Premier
Wen Jiabao. In a press conference today, the premier asserted, "We
must not slacken our efforts in regulating the housing sector,"
effectively dashing investors' hopes for any near-term easing
maneuvers. Elsewhere, financial stocks were among the top gainers
in Seoul and Tokyo, as traders cheered a solid performance by U.S.
banks in their latest round of stress tests. By the close, China's
Shanghai Composite tumbled 2.6%, Hong Kong's Hang Seng shed 0.2%,
South Korea's Kospi tacked on nearly 1%, and Japan's Nikkei
Likewise, strength in banks is propelling the major European
benchmarks into the black at midday. The bulls are taking their
cues from Tuesday's rally on Wall Street, as well as a clean bill
of health for many U.S. financial firms, including heavyweights
like Bank of America and Wells Fargo. At last look, London's FTSE
100 is up 0.3%, France's CAC 40 has added 0.7%, and Germany's DAX
is 1.1% higher.
Currencies and Commodities
The U.S. dollar index is trading just north of breakeven this
morning, with the greenback last seen at $80.21. Crude oil,
meanwhile, has pulled back, with the front-month contract down
0.08% at $107.15 per barrel. A
continues to weigh on gold futures, with the malleable metal 2%
lower ahead of the bell at $1,659.90 an ounce.
Unusual Put and Call Activity:
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