Opening View: DJIA Aims to Extend Winning Streak, Despite Disappointing Disney Earnings

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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 Disney ( DIS ) 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.

Dow, S&P and Nasdaq futures

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 surrendered 3.5%.

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%.

Earnings Preview

Today's earnings docket will feature reports from Cisco Systems ( CSCO ), Canadian Solar ( CSIQ ), 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 SchaeffersResearch.com for more news as it breaks.

Economic Calendar

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 ( CPI ) and core CPI, along with the Reuters/University of Michigan consumer sentiment index.

Market Statistics

Equity option activity on the Chicago Board Options Exchange ( CBOE ) 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.

NYSE and Nasdaq summary

Volatility indices

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Overseas Trading

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.

Overseas markets

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.

Currencies and commodities

Unusual Put and Call Activity:

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This article appears in: Investing , Options

Referenced Stocks: CBOE , CPI , CSCO , CSIQ , DIS

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