Opening View: DJIA Pointed Higher Despite Fitch Warning, AMR Bankruptcy

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U.S. stocks are pointed higher once again today, despite a debt warning from Fitch Ratings and a high-profile bankruptcy filing. Specifically, Fitch last night maintained its triple-A credit rating on the U.S., but lowered its outlook to negative from stable, citing the congressional supercommittee's failure to agree on budget cuts. Meanwhile, airline issue AMR Corp. ( AMR ) is swimming in Chapter 11-related red ink, though Wall Street has adopted a glass-half-full approach ahead of a key meeting of euro-zone finance ministers. Furthermore, traders appear optimistic ahead of the Conference Board's latest consumer confidence report, slated to hit the Street around 10 a.m. EST. Against this starry-eyed backdrop, the Dow Jones Industrial Average (DJIA) is trading about 37 points north of fair value, while the broader S&P 500 Index (SPX) is hoping to ride its record-breaking post-Thanksgiving momentum .

Dow, S&P and Nasdaq futures

In equities news, AMR Corp. (AMR - 1.62) this morning filed for voluntary Chapter 11 bankruptcy protection in New York. The company listed assets of about $24.72 billion, liabilities of $29.55 billion, and $4.1 billion in cash. Furthermore, the American Airlines parent also named Thomas Horton its chairman and chief executive. "We plan to initiate further negotiations with all of our unions to reduce our labor costs to competitive levels," the new CEO said.

In earnings news, Thor Industries, Inc. (THO - 24.34) said fiscal first-quarter profit dropped to $22.4 million, or 41 cents per share, down 5.6% from last year's profit of $23.7 million, or 44 cents per share. Gross margin was also on the decline, contracting 1.5% to 11.1%. On the other hand, revenue was on the rise, jumping 11% to $673 million. The results came in below expectations, with analysts, on average, projecting a profit of 42 cents per share on revenue of $673.7 million.

Earnings Preview

Today's earnings docket will also feature reports from OmniVision Technologies ( OVTI ), Tiffany & Co. ( TIF ), Beacon Roofing ( BECN ), Fifth Street Finance ( FSC ), and KongZhong (KONG). Keep your browser at SchaeffersResearch.com for more news as it breaks.

Economic Calendar

The S&P/Case-Shiller home price index is scheduled to hit the Street today, along with the Conference Board's monthly report on consumer confidence. Employment data starts to trickle in on Wednesday, with the release of the Challenger, Gray & Christmas report on job cuts, and ADP's private payrolls number for November. Also on tap are the Chicago PMI, pending home sales, and the Fed's Beige Book. Thursday features the ISM manufacturing index, as well as construction spending data and the usual report on weekly jobless claims. The week wraps up with a bang on Friday, when the Labor Department unveils its monthly nonfarm payrolls report.

Market Statistics

Equity option activity on the Chicago Board Options Exchange (CBOE) saw 854,932 call contracts traded on Monday, compared to 557,146 put contracts. The resultant single-session put/call ratio arrived at 0.65, while the 21-day moving average was 0.73.

NYSE and Nasdaq summary

Volatility indices

Overseas Trading

Asian markets ended higher today, following suit with Monday's strong rally on Wall Street. Technology issues helped pace the regional advance, boosted by reports of solid post-holiday retail sales in the U.S. Meanwhile, traders were also optimistic ahead of a meeting of euro-zone finance ministers, where officials are expected to finalize their plans to leverage the European Financial Stability Facility (EFSF). By the close, Japan's Nikkei and South Korea's Kospi each added 2.3%, while Hong Kong's Hang Seng and China's Shanghai Composite tacked on 1.2% apiece.

Stocks in Europe are mixed at midday, as traders have curbed some of their enthusiasm pending the outcome of today's highly anticipated meeting in Brussels. Plus, an unconfirmed report out of France suggests that Standard & Poor's may lower its outlook on the country's triple-A credit rating, which has kept some bulls on the sidelines today. At last check, the French CAC 40 is up 0.1%, Germany's DAX has gained 0.2%, and London's FTSE 100 is 0.2% lower.

Overseas markets

Currencies and Commodities

The greenback has continued its slump this morning, with the U.S. dollar index down 0.5%. Meanwhile, crude oil futures have extended their upward momentum, with the front-month contract last seen 0.2% higher at $98.40 per barrel. Finally, after enjoying its best session in about three weeks , gold is trading modestly higher, with the malleable metal up 0.1% to flirt with $1,716.40 an ounce.

Currencies and commodities

Unusual Put and Call Activity:

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This article appears in: Investing , Options

Referenced Stocks: AMR , BECN , FSC , OVTI , TIF

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