Wall Street is bracing for
another negative start
today, thanks to escalating concerns about the euro-zone debt
crisis. Fueling the bears is the latest report from Eurostat, which
indicated that the combined gross domestic product (
) of the 17-nation euro zone rose a meager 0.2% in the third
quarter, exacerbating fears of a stalling regional economy. Echoing
Italian bond yields
have continued their rise above the benchmark 7% level, while
10-year Spanish bonds have soared 17 basis points amid re-emerging
questions about the nation's fiscal fate. Against this backdrop --
and thanks to a lackluster earnings report from blue-chip bigwig
Wal-Mart Stores (
) -- the Dow Jones Industrial Average (DJIA) is headed for another
double-digit drop out of the gate.
In earnings news, Home Depot (HD - 38.25) said third-quarter net
income improved a year-over-year 12% to $934 million, or 60 cents
per share. Revenue, meanwhile, rose 4.4% to $17.33 billion. The
results exceeded expectations, with analysts calling for a
per-share profit of 59 cents on sales of $17.11 billion. Meanwhile,
HD also declared a dividend of 29 cents per share -- up 16% from
its previous dividend -- and upped its fiscal 2012 earnings
projection to $2.38 per share. Analysts, on average, are expecting
a fiscal-year profit of just $2.36 per share. In pre-market action,
HD is up 1.4%.
Wal-Mart Stores (WMT - 58.89) collected a third-quarter profit
of $3.34 billion, or 96 cents per share, down 2.7% from its
year-ago earnings of $3.44 billion, or 95 cents per share.
Meanwhile, revenue ramped up 8.1% to $110.23 billion. The
mega-retailer fell short of analysts' bottom-line estimates, as
Wall Street was anticipating a profit of 98 cents per share on
$108.22 billion in revenue. Looking ahead, WMT predicted
fourth-quarter earnings of $1.42 to $1.48 per share, and a
full-year profit of $4.45 to $4.51 per share. Analysts are
projecting a profit of $1.45 per share for the fourth quarter, and
$4.50 per share for the full year. At last check, WMT is bracing
for a 2% retreat.
Elsewhere, Zagg Incorporated (ZAGG - 12.19) last night reported
a third-quarter profit of $2.2 million, or 7 cents per share,
compared to its year-ago profit of $3.9 million, or 16 cents per
share. On an adjusted basis, earnings arrived at 16 cents per
share. Revenue, meanwhile, soared 99% to $45.9 million. Analysts,
on average, were expecting earnings of 7 cents per share on revenue
of $44.7 million. Heading into the holiday season, ZAGG upwardly
revised its full-year revenue guidance to $170 million. By
comparison, analysts are expecting full-year sales to total $168.5
million. Ahead of the bell, ZAGG is down 2.4%.
(URBN - 26.83) said its third-quarter earnings fell to $50.7
million, or 33 cents per share, down 31% from its year-ago profit
of $73.1 million, or 43 cents per share. Despite a 7% decrease in
same-store sales, net sales rose 6.3% to $610 million. URBN's
results were mixed, however, as analysts were looking for a profit
of 32 cents per share on sales of $626.2 million. At last look,
URBN is headed for a 6.1% plunge out of the gate.
Today's earnings docket will also feature reports from Agilent
), Autodesk (
), Beazer Homes (
), Concur Technologies (CNQR), Covidien (COV), Dell (DELL), Dick's
Sporting Goods (DKS), and Saks (SKS). Keep your browser at
for more news as it breaks.
Inflation data starts to hit the Street today, with the release
of the producer price index (PPI) and core PPI. Also due out are
reports on retail sales and business inventories, along with the
Empire State manufacturing index. On Wednesday, the consumer price
index (CPI), core CPI, and NAHB housing market index are on the
docket, as well as the latest stats on industrial production and
capacity utilization. Thursday brings us the regularly scheduled
weekly report on jobless claims, the Philadelphia Fed manufacturing
index, and housing starts. The economic calendar concludes on
Friday with the Conference Board's index of leading indicators.
Equity option activity on the Chicago Board Options Exchange
(CBOE) saw 711,047 call contracts traded on Monday, compared to
550,879 put contracts. The resultant single-session put/call ratio
arrived at 0.77, while the 21-day moving average was 0.69.
Stocks in Asia ended mostly lower today, bogged down by
all-too-familiar anxieties about euro-zone debt. Italian bond
yields rose to a euro-era high of 6.2% during a Monday auction,
suggesting that newly appointed technocrat Mario Monti has been
saddled with quite a task in leading the country from the brink of
default. The ongoing euro drama propelled the safe-haven yen
higher, which weighed heavily on Japanese exporters. By the close,
South Korea's Kospi declined 0.9%, Hong Kong's Hang Seng shed 0.8%,
Japan's Nikkei fell 0.7%, and China's Shanghai Composite managed to
The major equity benchmarks are pointed south in Europe, with
bond yields on Italian and Spanish debt both creeping toward
uncomfortably high levels. Also weighing on sentiment is a dismal
earnings report from Italy's UniCredit, which confessed to a hefty
third-quarter loss of 10.64 billion euros. Against this backdrop,
traders were none too impressed by GDP data showing modest
expansion in France and Germany during the recently concluded
quarter. At last check, the French CAC 40 is down 2.1%, the German
DAX has dipped 2%, and London's FTSE 100 is 1% lower.
Currencies and Commodities
The greenback is on the rebound this morning, with the U.S.
dollar up 0.4%. On the other hand, crude futures have extended
yesterday's retreat, with the front-month contract down 36 cents,
or 0.4%, to linger near $97.86 per barrel. Likewise, gold futures
have also continued their recent pullback, with the malleable metal
last seen $8.40, or 0.5%, lower at $1,770 an ounce.
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