The cautious optimism that led to
stocks' positive finish yesterday
has carried over into today, with hopes for a solution to the
European debt drama once again lifting sentiment. Specifically,
investors are hopeful ahead of a scheduled conference call between
German Chancellor Angela Merkel, French President Nicolas Sarkozy,
and Greek Prime Minister George Papandreou. In fact, it seems Wall
Street is donning its rose-colored glasses, with futures reversing
early losses stemming from Moody's downgrade of a couple of French
banks. What's more, not even a looming batch of data has weighed on
the bulls, with reports on both retail sales and producer prices
slated for release ahead of the bell. Against this optimistic
backdrop, the Dow Jones Industrial Average (DJIA) is set for a
55-point climb out of the gate, while the broader S&P 500 Index
(SPX) is lingering about 7 points north of breakeven.
In equities news, Dell Inc. (DELL - 14.38) late yesterday said
its board approved a plan to buy back up to $5 billion in stock, or
about 19% of the tech firm's current market value. The new plan
comes on the heels of the company's previous stock-repurchase
program, which had $2.16 billion left on the initial $10 billion
authorized four years earlier. "With this additional commitment
from the board, we have the flexibility to continue making
opportunistic share repurchases as a key element of our disciplined
capital allocation strategy," said CFO Brian Gladden. Ahead of the
bell, the shares of DELL are up 2.3%.
In earnings news, Majesco Entertainment (COOL - 2.66) reported
an adjusted third-quarter profit of 3 cents per share on revenue of
$19.5 million, surpassing analysts' expectations for a loss of 2
cents per share on revenue of $17.5 million. "Despite what is
normally a seasonally weak time for our business, Majesco
experienced another strong quarter," said CEO Jesse Sutton. "Driven
by strength in Europe this past quarter, Zumba Fitness has now sold
over 3 million units worldwide." The company predicted its fiscal
2011 earnings to range between 35 cents and 38 cents per share, on
an adjusted basis, with revenue ranging between $120 million and
$130 million. Consensus estimates were calling for COOL's
fiscal-year earnings to hit 37 cents per share on revenue of $125.7
million.
Finally, Schiff Nutrition International, Inc. (WNI - 9.60)
reported a fiscal first-quarter profit of $4.7 million, or 16 cents
per share -- up 27% from its year-ago earnings of $3.7 million, or
13 cents per share, and comfortably surpassing the Street's
forecast for a per-share profit of 13 cents. Meanwhile, revenue
rose a year-over-year 13% to $58.2 million, beating analysts'
consensus estimate for sales of $51.4 million. For the fiscal year,
WNI backed its forecast for net sales percentage growth in the high
single digits to low double digits.
Earnings Preview
Today's earnings docket will also feature reports from Apogee
Enterprises (
APOG
), Ascena Retail Group (
ASNA
), CLARCOR (
CLC
), and Pall Corp. (
PLL
). Keep your browser at
SchaeffersResearch.com
for more news as it breaks.
Economic Calendar
A batch of housing data from the Mortgage Bankers Association (
MBA
), the producer price index (PPI) for August, last month's retail
sales figures, business inventories for July, and the usual crude
inventories report are on the docket today. Thursday features the
weekly jobless figures from the Labor Department, the Empire State
manufacturing index, the Philly Fed business index, the consumer
price index (CPI), and industrial production and capacity
utilization for August. Friday wraps up with the preliminary
Reuters/University of Michigan consumer sentiment index for
September.
Market Statistics
Equity option activity on the Chicago Board Options Exchange
(CBOE) saw 797,237 call contracts traded on Tuesday, compared to
578,038 put contracts. The resultant single-session put/call ratio
arrived at 0.73, while the 21-day moving average was 0.75.
The summer 2011 issue of
SENTIMENT
magazine is now available here.
Overseas Trading
Asian markets ended mixed today, as traders weighed conflicting
signals over the fate of Europe. German Chancellor Merkel on
Tuesday batted down speculation about a potential Greek default,
but beleaguered French banks Credit Agricole and Societe Generale
were hit with a Moody's downgrade today. Not surprisingly, the
ratings agency cited "sizeable exposures to the Greek economy" as
the impetus behind the negative notes. However, Chinese Premier Wen
Jiabao gave credence to reports that Beijing might be willing to
lend aid to cash-strapped euro-zone countries. "We have repeated
our willingness to extend a helping hand and increase our
investment," noted Wen at the World Economic Forum. Against this
uncertain backdrop, South Korea's Kospi lost 3.5%, Japan's Nikkei
gave up 1.1%, Hong Kong's Hang Seng added 0.08%, and China's
Shanghai Composite rose 0.6%.
Meanwhile, traders in Europe are taking a glass-half-full
approach, with the major regional indexes broadly higher at midday.
The aforementioned Moody's downgrade seems to have been priced in
already, with Societe Generale and Credit Agricole enjoying modest
gains at last check. Plus, investors are hopeful ahead of the
aforementioned conference call between Merkel, Sarkozy, and
Papandreou. Even more encouraging, European Commission President
Jose Manuel Barroso suggested that progress is being made on the
concept of a joint euro-zone bond. At last check, the German DAX is
up 3.1%, the French CAC 40 is 1.9% higher, and London's FTSE 100
has gained 1.8%.
Currencies and Commodities
The greenback is trading fractionally lower this morning, with
the U.S. dollar index down about 0.1% at last look. Elsewhere,
crude oil futures have pulled back from six-week peak territory,
with the front-month contract down 35 cents, or 0.4%, at $89.93 per
barrel. Gold futures, on the other hand, have extended yesterday's
upward momentum, tacking on $7.90, or 0.4%, to flirt with $1,838 an
ounce.
Unusual Put and Call Activity:
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