Futures Head Higher as Traders Eye Jobless Claims, Consumer Spending

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Shrugging off yesterday's bearish turn , futures on all three major market indexes are trading north of breakeven this morning. High hopes for today's deluge of economic data -- with such notables as weekly jobless claims, consumer spending, and the Institute for Supply Management's ( ISM ) manufacturing index on tap -- seems to be stoking the bullish flames. However, after effectively tempering Wednesday's early optimism , Fed Chairman Ben Bernanke is scheduled to begin his second day of testimony on Capitol Hill at 10 a.m Eastern, leaving Wall Street a bit cautious heading into the session. Ahead of a day chock-full of information for investors to digest, the Dow Jones Industrial Average (DJIA) is trading 27 points higher ahead of the bell, while the broader S&P 500 Index (SPX) is up 2 points.

Dow, S&P and Nasdaq futures

In earnings news, Finisar Corporation (FNSR - 20.29) reported a fiscal third-quarter profit of $8.9 million, or 9 cents per share, a 53% drop from last year's profit of $18.8 million, or 22 cents per share. Excluding items, earnings fell to 23 cents per share, while revenue declined 7.6% to $243 million. The bottom-line results bested analysts' expectations for an adjusted profit of 22 cents per share; however, revenue missed Wall Street's forecast of $245 million. Due to concerns about weak demand, FNSR provided a conservative forecast for the current quarter, calling for adjusted earnings of 18 cents to 22 cents per share, on a revenue range of $235 million to $250 million. Analysts, meanwhile, were looking for a fourth-quarter profit of 25 cents per share on $253 million in sales. FNSR is bracing for a 9% drop right out of the gate.

Elsewhere, MBIA Inc. (MBI - 10.78) swallowed a fourth-quarter loss of $626 million, or $3.23 per share, down sharply from its year-ago earnings of $450.8 million, or $2.24 per share. The recently concluded quarter included a substantial pretax loss of $1.7 billion linked to insured credit derivatives. On an adjusted basis, MBI's loss narrowed to $252 million, while its adjusted book value retreated 6% to $34.50 per share. "Including 2012 to date, we have commuted or agreed to commute almost $24 billion of potentially volatile liabilities since the end of the third quarter," reported President and Chief Financial Officer Chuck Chaplin in a company release. MBI is down 2.6% in pre-market trading.

Finally, PetSmart (PETM - 55.74) swung to a fourth-quarter profit of $102 million, or 91 cents per share, up 13% from $90.3 million, or 77 cents per share, in the comparable quarter of 2010. Meanwhile, net sales climbed 7.7% to $1.64 billion, boosted by a 5.5% increase in same-store sales. Analysts, on average, were expecting earnings of 90 cents per share on sales of $1.62 billion. Looking ahead, the retailer is forecasting a full-year profit of $3.02 to $3.16 per share, outpacing Wall Street's prediction for earnings of $3.01 per share. PETM is 1.8% lower ahead of the bell.

Earnings Preview

Today's earnings docket will also feature reports from Big Lots ( BIG ), James River Coal ( JRCC ), Foot Locker ( FL ), Kenneth Cole ( KCP ), Kroger (KR), Martha Stewart Living (MSO), Motricity (MOTR), PC Mall (MALL), Vanguard Natural Resources (VNR), and Wendy's (WEN). Keep your browser at SchaeffersResearch.com for more news as it breaks.

Economic Calendar

Today's round-up will include weekly jobless claims, personal income and spending data, the ISM manufacturing index, and construction spending. There are no major economic reports scheduled to be released on Friday.

Market Statistics

Equity option activity on the Chicago Board Options Exchange (CBOE) saw 1,250,275 call contracts traded on Wednesday, compared to 841,895 put contracts. The resultant single-session put/call ratio arrived at 0.67, while the 21-day moving average was 0.61.

NYSE and Nasdaq summary

Volatility indices

Overseas Trading

Stocks in Asia ended lower today, as traders scaled back their expectations for another round of monetary easing from the U.S. Fed. The day's economic news also sparked some jitters, as dueling purchasing managers index (PMI) readings out of China and Hong Kong suggested that regional factory activity is treading a fine line between expansion and contraction. Meanwhile, in Tokyo, a resurgent yen applied pressure to exporters. By the close, Hong Kong's Hang Seng shed 1.4%, Japan's Nikkei gave up 0.2%, and China's Shanghai Composite retreated 0.1%. Markets in South Korea are closed for holiday.

On the other hand, the major European benchmarks are pointed higher at midday. Traders are taking a glass-half-full view of Markit's February PMI reading of 49.0, which showed the pace of contraction hitting a six-month low. Bulls have also been pulled off the sidelines by news that debt-burdened Italy availed itself of 26% of the cheap loans offered by the European Central Bank (ECB) in Wednesday's refinancing operation. In fact, the yield on Italy's 10-year notes earlier dipped south of 5% for the first time since last August. At last check, London's FTSE 100 and the French CAC 40 have gained 0.8% apiece, while the German DAX is 0.7% higher.

Overseas markets

Currencies and Commodities

The greenback is trading lower this morning, with the U.S. dollar index last seen 0.03% lower at $78.71. Crude oil continues to edge higher, with the front-month contract up 0.2% at $107.23 per barrel. Shaking off yesterday's plunge , gold futures have tacked on 0.2% to trade at $1,713.90 an ounce.

Currencies and commodities

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This article appears in: Investing , Options

Referenced Stocks: BIG , FL , ISM , JRCC , KCP

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