U.S. equities powered higher for the third straight session on
Tuesday, with merger-and-acquisition activity and an extended
commodities rebound fueling the bulls. Ahead of the bell today,
stocks are set to extend their winning streak, with traders
shrugging off a lackluster earnings showing from blue chip Walt
) and protests in Greece. In the same vein, gold and silver futures
continue to blaze a path into the black, with the precious metals
chipping away at their month-to-date deficits. In pre-market
trading, the Dow Jones Industrial Average (DJIA ) is trading about
11.6 points above fair value, while the broader S&P 500 Index
(SPX ) is flirting with a 2-point lead.
In equities news, Walt Disney (DIS - 43.91) said its fiscal
second-quarter earnings fell a year-over-year 1% to $942 million,
or 49 cents per share, while sales rose 6% to $9.08 billion.
Analysts, on average, were expecting the blue-chip cartoon king to
record a profit of 57 cents per share on revenue of $9.12 billion.
The company said studio revenue dropped 13% thanks to a relatively
weak movie lineup, but said the third quarter looks promising with
"Cars 2," "Thor," and the newest installment of the lucrative
"Pirates of the Caribbean" franchise on tap. At last check, DIS has
Meanwhile, Molycorp Inc. (MCP - 66.47) reported a first-quarter
loss of $909,000, or 3 cents per share, narrower than its year-ago
loss of $7.7 million, or 16 cents per share. Excluding items, the
firm said it earned a penny per share, falling short of analysts'
expectations for a profit of 10 cents per share. Meanwhile, revenue
grew to $26.3 million from $3 million in the year-earlier quarter,
but still lagged the Street's consensus estimate for $42 million in
sales. Looking ahead, the company cautioned that the earthquake and
tsunami disaster in Japan could negatively impact market demand in
the second and third quarters, but said it expects a full recovery
by the fourth quarter. Ahead of the bell, MCP is down about 4%.
Elsewhere, Toyota Motor (TM - 81.02) reported a net profit of
25.4 billion yen for its fiscal fourth quarter, down 77% from the
year-ago period and less than the 81.20 billion yen expected by
analysts. Sales for the quarter fell 12% to 4.64 billion yen, while
operating profit declined 52% to 46.1 billion yen. For the fiscal
year ended in March, the automaker earned 408.18 billion yen --
nearly doubling from the year prior, despite a loss of 110 billion
yen stemming from the March 11 earthquake. "The auto industry has a
very broad reach, and we have the ability to drive Japan's recovery
during these very tough times," said President Akio Toyoda. In
pre-market trading, TM is trading just north of breakeven.
Finally, bailed-out insurer American International Group (AIG -
29.62) and the U.S. Treasury unveiled plans to sell a total of 300
million AIG shares. At the stock's closing price of $29.62 on
Tuesday, the offering is worth about $8.89 billion -- smaller than
the Street expected. Assuming Uncle Sam unloads only the allotted
200 million shares, the government's stake in AIG would fall to 77%
from 92%. At last check, AIG has retreated roughly 2%.
Today's earnings docket will feature reports from Cisco Systems
), Canadian Solar (
), Macy's (M), MBIA Inc. (MBI), SINA Corp. (SINA), Symantec (SYMC),
IAMGOLD (IAG), Teva Pharmaceuticals (TEVA), and Zipcar Inc. (ZIP),
just to name a few. Keep your browser at
for more news as it breaks.
The economic agenda will feature the regularly scheduled crude
inventories data, as well as Uncle Sam's reports on the trade
balance and Treasury budget. Tomorrow, the Street will digest the
Labor Department's weekly jobless figures and producer price data,
as well as the government's business inventories report for March
and retail sales data for April. Finally, Friday will feature
April's consumer price index (
) and core CPI, along with the Reuters/University of Michigan
consumer sentiment index.
Equity option activity on the Chicago Board Options Exchange (
) saw 964,064 call contracts traded on Tuesday, compared to 566,564
put contracts. The resultant single-session put/call ratio fell to
0.59, while the 21-day moving inched higher to 0.62.
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Stocks in Asia ended mixed today, as investors in the region
considered newly released inflation data from China. Consumer
prices rose 5.3% in April, narrowly outpacing analysts'
expectations and raising the prospect of additional monetary
tightening measures out of Beijing. Meanwhile, in Japan, solid
earnings from NEC Corp. and a robust full-year forecast from Orix
helped boost investor sentiment. In Korea, refiners and energy
issues led the advance on rebounding crude prices, while HSBC
weighed on Hong Kong shares after the financial firm outlined new
cost-cutting endeavors. By the close, the Shanghai Composite shed
0.3%, Hong Kong's Hang Seng lost 0.2%, Japan's Nikkei added 0.5%,
and South Korea's Kospi rallied 1.3%.
A well-received round of corporate earnings reports have
propelled European indexes higher at midday. Belgian-French banking
issue Dexia topped first-quarter expectations, while France-based
Hermes International provided a halo lift for fellow luxury-goods
retailers after announcing stronger-than-anticipated quarterly
sales growth. Auto stocks also trekked higher, with Germany's
Porsche leading the way after an upgrade to "overweight" at Morgan
Stanley. At last check, London's FTSE 100 is up 0.1%, France's CAC
40 has gained 0.5%, and the German DAX is trading 0.7% higher.
Currencies and Commodities
The greenback is trading fractionally lower this morning, with
the U.S. dollar index down almost 0.1%. Elsewhere, after brushing
off an increased margin requirement from CME Group on Tuesday,
crude oil futures have retreated ahead of today's weekly supplies
data. At last check, June-dated crude futures have shed $0.74, or
0.7%, to flirt with $103.73 per barrel. Meanwhile, gold and silver
futures have continued their run higher, with the front-month
contracts up 0.4% and 1.9%, respectively.
Unusual Put and Call Activity:
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