Opening View: COMP Looks to Extend Winning Streak on Solid Google Earnings

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U.S. stocks are set to end the week on a high note, with Google's ( GOOG ) latest earnings report providing fodder for the bulls. Elsewhere, investors continue to cheer Slovakia's vote to bolster the euro-zone rescue fund , which has fueled optimism ahead of a meeting of Group of 20 (G-20) leaders in Paris today, and has helped Wall Street overlook Spain's credit-rating downgrade from Standard & Poor's. Against this backdrop -- and ahead of data on retail sales and consumer confidence -- the Dow Jones Industrial Average (DJIA) is set to erase yesterday's slide, while the tech-rich Nasdaq Composite (COMP) is on pace to extend its winning streak.

Dow, S&P and Nasdaq futures

In earnings news, Google (GOOG - 558.99) reported a third-quarter profit of $2.73 billion, or $8.33 per share -- up 26% from its year-ago earnings of $2.17 billion, or $6.72 per share. Excluding items, per-share profit increased to $9.72 from $7.64 last year. Meanwhile, net revenue rose 37% to $7.51 billion. Analysts had expected a profit of $8.74 per share on revenue of $7.21 billion. Ahead of the bell, GOOG is set to soar more than 7%.


J.B. Hunt Transport Services (JBHT - 38.89) reported earnings that were roughly in line with analyst expectations. Specifically, JBHT's third-quarter profit increased 32% to $68.7 million, or 57 cents per share, while revenue jumped 19% to $1.17 billion. Analysts had projected earnings of 56 cents per share on revenue of $1.17 billion. "In addition to improving trends in our business units, we were also able to repurchase approximately 4.0 million shares of stock during the current quarter using our strong balance sheet and cash flow generation," explained President and CEO John N. Roberts. At last check, JBHT is pointed 6.3% higher.

Finally, Mattel (MAT - 27.78) said third-quarter net income rose to $300.8 million, or 86 cents per share, compared to $283.3 million, or 77 cents per share, a year ago. Revenue, meanwhile, rose 9% to $2 billion. The results fell in line with expectations, with analysts calling for an adjusted per-share profit of 86 cents on sales of $1.97 billion. In addition, Mattel said its board authorized a $500-million increase to its stock buyback program. In pre-market action, MAT is lingering just south of breakeven.

Earnings Preview

Today's earnings docket will also feature a report from Webster Financial Corp. ( WBS ). Keep your browser at SchaeffersResearch.com for more news as it breaks.

Economic Calendar

The week winds down with September retail sales data, the Reuters/UMich consumer sentiment index, business inventories, and import/export prices.

Market Statistics

Equity option activity on the Chicago Board Options Exchange ( CBOE ) saw 807,994 call contracts traded on Thursday, compared to 582,024 put contracts. The resultant single-session put/call ratio arrived at 0.72, while the 21-day moving average was 0.71.

NYSE and Nasdaq summary

Volatility indices

Overseas Trading

Stocks in Asia slipped today, bogged down by troubling Chinese inflation data and more negative headlines for the embattled euro zone. Inflation stats released today indicated that consumer prices on the mainland rose 6.1% in September, suggesting that policymakers have relatively little leeway to scale back their tightening efforts. Meanwhile, Standard & Poor's slashed Spain's credit rating late Thursday, rekindling concerns about the country's fiscal viability. By the close, Hong Kong's Hang Seng fell 1.4%, Japan's Nikkei lost 0.9%, China's Shanghai Composite shed 0.3%, and South Korea's Kospi bucked the trend to add 0.7%.

Despite the aforementioned downgrade of Spain, European benchmarks are trading higher at midday. Rather than dwelling on debt woes, traders are cheering solid earnings news from corporate giants such as Google, SAP AG, Syngenta, and Ericsson. These well-received results have helped to offset losses in the financial sector, with banking stocks taking a hit after Fitch downgraded UBS, and placed a handful of other names -- including BNP Paribas, and Societe Generale -- on review for potential downgrades. At last look, the French CAC 40 is up 0.9%, while both London's FTSE 100 and the German DAX have gained 1.1%.

Overseas markets

Currencies and Commodities

The greenback is trading fractionally higher this morning, with the U.S. dollar index up 0.04% at last look. Elsewhere, crude futures are on the rebound after two straight down days, with the front-month contract last seen $1.15, or 1.4%, higher at $85.60 per barrel. Finally, gold futures have also bounced back from yesterday's retreat, with the malleable metal up $7, or 0.4%, at $1,675.50 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

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This article appears in: Investing , Options

Referenced Stocks: CBOE , GOOG , WBS

Schaeffer's Investment Research

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