Futures Look to Bounce After Tuesday's Slide


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Traders are bringing the focus back to the home front today, with futures pointed modestly higher ahead of a slew of housing data. Although yesterday's report on building permits arrived at a three-year high, the optimism was overshadowed by concern over slowing growth in China , with all three major market indexes ending the session in the red . In addition to existing home sales and the Mortgage Bankers Association ( MBA ) mortgage index, the Street will also be privy to Congressional testimony from Fed Chairman Ben Bernanke, scheduled for 9:30 a.m. Eastern. Against this busy backdrop, the Dow Jones Industrial Average (DJIA) is trading nearly 28 points higher, while the broader S&P 500 Index (SPX) is set to tack on 3 points.

Dow, S&P and Nasdaq futures

In earnings news, Oracle Corporation (ORCL - 30.10) said its fiscal third-quarter profit surged 18% to $2.5 billion, or 49 cents per share, from last year's profit of $2.12 billion, or 41 cents per share. Excluding items, earnings rose 15% to 62 cents per share. The bottom line was positively affected by a 7.2% jump in new license sales, a key metric for ORCL's software business, which helped offset an 11% decline in hardware sales. Total revenue edged 3.1% higher to $9.04 billion. The results came in above Wall Street's expectations for adjusted earnings of 56 cents per share on $9.02 billion in sales. ORCL is trading 2.5% higher ahead of the bell.

Krispy Kreme Doughnuts (KKD - 8.49) swung to a fourth-quarter profit of $143.5 million, or $2.01 per share, up from a loss of $1.5 million, or 2 cents per share, in the year-ago period. Excluding items, earnings arrived at 6 cents per share. Meanwhile, revenue rose by 11.2% to $102 million, boosted by an 8.3% increase in company-owned same-store sales. Analysts, on average, were expecting earnings of 6 cents per share on sales of $101.3 million. Looking ahead, the company is forecasting an adjusted fiscal 2013 profit of 35 cents to 41 cents per share, compared to the Street's estimate of 35 cents per share. KKD is set to jump 3.7% right out of the gate.

Finally, General Mills, Inc. (GIS - 38.76) said its fiscal third-quarter profit fell 0.2% to $391.5 million, or 58 cents per share, from its year-ago profit of $392.1 million, or 59 cents per share. Excluding items, earnings dropped to 55 cents. Net sales saw a 13% improvement to $4.12 billion, thanks to GIS' acquisition of Yoplait. The top-line results came in better than expected, with analysts calling for adjusted earnings of 55 cents per share on $4.07 billion in sales. For fiscal 2012, the grocery concern reiterated its outlook for earnings of $2.53 to $2.55 per share, bracketing Wall Street's forecast for a per-share profit of $2.54. GIS is down 0.2% in pre-market trading.

Earnings Preview

Today's earnings docket will also feature reports from Actuant ( ATU ), Asure Software ( ASUR ), Daqo New Energy Corp. ( DQ ), Discover Financial Services ( DFS ), Fred's (FRED), Herman Miller (MLHR), Shoe Carnival (SCVL), Sonic Corp. (SONC), and The9 Limited (NCTY). Keep your browser at SchaeffersResearch.com for more news as it breaks.

Economic Calendar

Today's docket features the MBA mortgage index and existing home sales, in addition to the weekly update on crude inventories. On Thursday, we'll see the latest data on initial and continuing jobless claims, the Conference Board's index of leading economic indicators, and the Federal Housing Finance Agency (FHFA) home price index. A week chock-full of economic data wraps up on Friday with new home sales.

Market Statistics

Equity option activity on the Chicago Board Options Exchange (CBOE) saw 1,251,417 call contracts traded on Tuesday, compared to 661,371 put contracts. The resultant single-session put/call ratio arrived at 0.53, while the 21-day moving average was 0.62.

NYSE and Nasdaq summary

Volatility indices

Overseas Trading

It was a mixed session in Asia, as traders remained on edge regarding an apparent downturn in Chinese growth. Tuesday's pullback on Wall Street also prompted some jitters, with exporters among the notable decliners in Seoul and Tokyo. However, aluminum producers trekked higher in Shanghai, bolstered by reports that the government is looking to foster consolidation in the non-ferrous mining sector. By the close, South Korea's Kospi lost 0.7%, Japan's Nikkei gave up 0.6%, Hong Kong's Hang Seng fell 0.2%, and China's Shanghai Composite inched up 0.06%.

The major European benchmarks are trading just north of breakeven at midday, with buyers taking a cautious approach ahead of today's U.S. housing data. Automakers are bouncing back from Tuesday's losses, thanks to a sector upgrade to "overweight" at Citigroup, while British grocery giant J. Sainsbury rallied after reporting stronger-than-forecast quarterly sales. At last look, France's CAC 40 has tacked on 0.07%, London's FTSE 100 is 0.1% higher, and the German DAX is up 0.2%.

Overseas markets

Currencies and Commodities

The U.S. dollar index has pulled back this morning, with the greenback 0.1% lower at $79.53. Crude oil is headed higher, despite Saudi Arabia's attempt to ease supply concerns . Ahead of today's weekly inventories report, the front-month contract is up 0.5% at $106.59 per barrel. Gold futures are pointed north, as well, with the malleable metal set to jump 0.4% to $1,653.60 an ounce.

Currencies and commodities

Unusual Put and Call Activity:

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Unusual options activity - puts

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This article appears in: Investing Options
Referenced Stocks: ASUR , ATU , DFS , DQ , MBA

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