Opening View: DJIA Pointed Modestly Higher as Wall Street Eyes Euro-Zone Developments


U.S. stocks are pointed modestly higher ahead of the bell, as Wall Street digests the latest developments out of the euro zone. Most recently, Finland's parliament approved a proposed expansion to the European Financial Stability Fund (EFSF). However, the changes require the go-ahead from all 17 euro-zone members, fueling cautious optimism ahead of Germany's vote on the measure tomorrow. On the home front, meanwhile, investors will evaluate the Commerce Department's report on durable goods, with most economists expecting orders to remain unchanged in August. At last check, the Dow Jones Industrial Average (DJIA) is headed for a 63-point gain, while the S&P 500 Index (SPX) is lingering about 6.5 points north of fair value.

Dow, S&P and Nasdaq futures

In earnings news, Jabil Circuit, Inc. (JBL - 17.38) unveiled a fiscal fourth-quarter profit of $114.3 million, or 52 cents per share, up 95% from the year-ago quarter. Excluding items, JBL said it banked a profit of 62 cents per share. Meanwhile, revenue climbed 11% to $4.28 billion. Analysts, on average, were anticipating an adjusted profit of 56 cents per share on sales of $4.19 billion. JBL also highlighted a 126% increase to its fiscal-year earnings, as well as an increase of 23% for its fiscal-year revenue. "Posting a record quarter and fiscal year in the present environment is remarkable," said JBL CEO Timothy L. Main. "Demand for our expertise in managing global supply chain networks remains robust, especially now as customers increasingly focus on growth in developing economies," he added. Looking ahead, JBL predicted an adjusted per-share profit of 52 cents to 60 cents for the fiscal first quarter, and said it expects revenue of $4.3 billion to $4.5 billion. Wall Street, meanwhile, had forecast adjusted earnings of 61 cents per share on sales of $4.41 billion. At last check, JBL is headed for an 8% lead out of the gate.

Meanwhile, Sealy Corporation (ZZ - 1.79) reported a fiscal third-quarter profit of $6.6 million, or 4 cents per share, compared to a loss of $15.8 million, or 4 cents per share, in the year-ago period. Revenue increased 4.2% to $334.1 million. Analysts had expected a profit of 4 cents per share on revenue of $342 million. "We continued to reap the benefits of both our recent Next Generation Posturepedic launch and our new advertising campaign in the third quarter, as we delivered year over year sales growth [and] sequential gross margin improvement," said President and CEO Larry Rogers.

Finally, Family Dollar Stores (FDO - 54.18) said fiscal fourth-quarter profit grew 8% to $79.8 million, or 66 cents per share, topping expectations for a per-share profit of 63 cents. Revenue, meanwhile, rose 9.1% to $2.13 billion, in line with Wall Street's forecast. For the current quarter, FDO projected earnings of 65 cents to 73 cents per share, compared to analysts' expectations for a profit of 66 cents per share. For the fiscal year, the discount retailer expects earnings between $3.50 and $3.75 per share, with same-store sales expected to rise 8% to 10%. Analysts, on average, were anticipating a fiscal-year profit of $3.58 per share on an 8% sales increase. In addition, FDO unveiled plans to open 450 to 500 new stores in its new fiscal year, marking an increase of more than 50% from the previous year. In pre-market action, the shares of FDO are headed 1.5% higher.

Earnings Preview

Today's earnings docket will also feature reports from Darden Restaurants ( DRI ), Mosaic ( MOS ), and Texas Industries ( TXI ). Keep your browser at for more news as it breaks.

Economic Calendar

Last month's durable goods data will be released today, along with the regularly scheduled crude inventories report. On Thursday, the economic agenda heats up with the final second-quarter gross domestic product ( GDP ) figures, pending home sales data for July, and the usual weekly jobless claims on tap. Finally, we'll wrap up the week with reports on personal income and spending for August, the latest Reuters/UMich sentiment index, and the Chicago purchasing managers index ( PMI ).

Market Statistics

Equity option activity on the Chicago Board Options Exchange (CBOE) saw 974,479 call contracts traded on Tuesday, compared to 605,616 put contracts. The resultant single-session put/call ratio arrived at 0.62, while the 21-day moving average was 0.70.

NYSE and Nasdaq summary

Volatility indices

The summer 2011 issue of SENTIMENT magazine is now available here.

Overseas Trading

European benchmarks are wobbling around breakeven at midday, with strength in defensive stocks helping to offset weakness in financials. Lawmakers in Finland approved a proposed expansion to the EFSF, but traders are on edge ahead of a similar vote in Germany tomorrow. At last check, the German DAX is up 0.5%, the French CAC 40 is down 0.1%, and London's FTSE 100 has lost 0.3%.

Overseas markets

Currencies and Commodities

The greenback is trading modestly lower this morning, with the U.S. dollar index down about 0.1% at last check. Crude futures, meanwhile, have given back a portion of yesterday's gains, with the front-month contract down 37 cents, or 0.4%, to trade near $84.08 per barrel. Likewise, gold futures are also fractionally lower after yesterday's advance, giving up 80 cents, or about 0.1%, to flirt with $1,651.70 an ounce.

Currencies and commodities

Unusual Put and Call Activity:

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This article appears in: Investing , Options

Referenced Stocks: DRI , GDP , MOS , PMI , TXI

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