U.S. stocks are set to kick off the session on a high note
today, despite blue-chip bigwig Alcoa's (
) lackluster start to third-quarter earnings season. Furthermore,
in spite of Slovakia's rejection of a
bolstered euro-zone bailout fund
, investors are optimistic that the country will overturn the vote
ahead of a summit of European Union (
) leaders next week. As Wall Street takes the glass-half-full
approach, the Dow Jones Industrial Average (DJIA) is headed for a
62-point pop out of the gate, while the broader S&P 500 Index
(SPX) is poised to extend its October run in the black.
In earnings news, Alcoa (AA - 10.30) said its third-quarter
profit more than doubled to $172 million, or 15 cents per share,
from last year's earnings of $61 million, or 6 cents per share.
Revenue improved 21% to $6.42 billion. The results were mixed, as
Wall Street was anticipating a profit of 22 cents per share on
$6.22 billion in revenue. "With the exception of Europe, we saw
growth in our end markets, though at a slower rate than in the
first half, as confidence in the global recovery faded," explained
Chairman and CEO Klaus Kleinfeld. In pre-market trading, the shares
of AA are pointed 3.4% lower.
Elsewhere, Healthcare Services Group (HCSG - 17.52) reported a
third-quarter profit of $10 million, or 15 cents per share, up 9%
from its year-ago earnings of $9.2 million, or 14 cents per share.
Meanwhile, revenue increased 12% to $218.9 million. Analysts, on
average, were expecting HCSG to bank a profit of 15 cents per share
on $216 million in revenue.
Finally, PepsiCo (PEP - 60.95) reported a third-quarter profit
of $2 billion, or $1.25 per share, compared to $1.92 billion, or
$1.19 per share, a year earlier. Excluding items, the beverage
behemoth said it earned $1.31 per share. Revenue, meanwhile, jumped
13% to $17.58 billion. The results topped expectations, as
analysts, on average, were calling for an adjusted profit of $1.30
per share on sales of $17.18 billion. Meanwhile, PEP also
reiterated its 2011 outlook, which calls for high single-digit
earnings-per-share growth. At last check, PEP is poised to start
the session with a 1.2% gain.
Today's earnings docket will feature reports from Adtran Inc. (
), Infosys (
), ASML Holding (
), and Universal Forest Products (UFPI). Keep your browser at
for more news as it breaks.
The Federal Open Market Committee's (FOMC) latest meeting
minutes, along with the MBA mortgage index, are slated for release
today. Meanwhile, Thursday heats up with the August trade balance,
the holiday-delayed crude inventories report, and the weekly report
on initial jobless claims. Friday winds down with September retail
sales data, the Reuters/UMich consumer sentiment index, business
inventories, and import/export prices.
Equity option activity on the Chicago Board Options Exchange
(CBOE) saw 747,982 call contracts traded on Tuesday, compared to
582,457 put contracts. The resultant single-session put/call ratio
arrived at 0.78, while the 21-day moving average was 0.71.
Asian markets ended mostly higher today, with Shanghai-listed
equities blazing the path into the black. Banking stocks continued
to lead the advance, lifted by news that the government's sovereign
wealth fund is plowing cash into major financial firms. Traders in
South Korea shrugged off downbeat jobs data to take part in the
day's rally, but Japanese equities succumbed to selling pressure.
Weakness in major manufacturing issues played a role, as the likes
of Honda and Toyota face production halts amid heavy flooding at
their respective Thailand factories. By the close, Japan's Nikkei
shed 0.4%, South Korea's Kospi rose 0.8%, Hong Kong's Hang Seng
gained 1%, and China's Shanghai Composite surged 3%.
European benchmarks are on positive ground at midday, recovering
from early losses after Slovakia voted down a measure to expand the
European Financial Stability Facility (EFSF). With a second vote on
the matter slated for later in the week, traders aren't ready to
panic just yet. Instead, investors are looking forward to some
insight from European Commission President Jose Manuel Barroso,
who's due to present a bank recapitalization plan before the
European Parliament later in the session. In other news, a report
on euro-zone industrial production came in stronger than expected,
while chip maker ASML rallied on the heels of its third-quarter
earnings report. At midday, the French CAC 40 is up 1.3%, the
German DAX has added 1.2%, and London's FTSE 100 has tacked on
Currencies and Commodities
The greenback is trading lower this morning, with the U.S.
dollar index down 0.8% at last look. Elsewhere, crude futures are
poised to extend their winning streak to six straight sessions,
despite the International Energy Agency's (IEA) downwardly revised
demand forecast for 2011 and 2012. At last check, the front-month
contract is up 48 cents, or 0.6%, at $86.49 per barrel. Finally,
gold futures have bounced back from yesterday's wave of
profit-taking, with the malleable metal last seen $23.90, or 1.4%,
higher at $1,684.90 an ounce.
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