Opening View: DJIA Ready to Rebound as Wall Street Awaits EU's Plan of Action


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U.S. stocks are set to bounce back from Tuesday's drubbing , as Wall Street awaits a concrete fiscal plan of action from the euro zone. Specifically, today's summit of European Union ( EU ) leaders is expected to produce a detailed strategy to tackle the region's debt concerns, including a bailout of Greece and a bolstered European Financial Stability Facility (EFSF). Ahead of the highly anticipated announcement, speculators are busy digesting the latest batch of corporate earnings reports, with Ford Motor ( F ) and ( AMZN ) among the many notables of the day. In pre-market action, the Dow Jones Industrial Average (DJIA) is trading almost 80 points north of fair value, while the broader S&P 500 Index (SPX) is headed for a 7-point lead out of the gate.

Dow, S&P and Nasdaq futures

In earnings news, Ford Motor (F - 12.43) reported a third-quarter profit of $1.65 billion, or 41 cents per share, down from $1.69 billion, or 43 cents per share, a year prior. Excluding items, the automaker said it earned 46 cents per share. Meanwhile, revenue rose to $33.1 billion from $29 billion. The results exceeded expectations, as analysts were anticipating an adjusted per-share profit of 44 cents on sales of $29.9 billion. However, the firm said it will not address resuming its dividend at this time. Ahead of the bell, F is trading 1.2% lower. (AMZN - 227.15) saw its third-quarter profit plummet 73% to $63 million, or 14 cents per share, from $231 million, or 51 cents per share, in the year-ago period. Revenue, on the other hand, surged 44% to $10.88 billion. However, the results failed to meet expectations, as analysts forecast a profit of 24 cents per share on revenue of $10.95 billion. For the current quarter, the retail website operator predicts revenue will range between $16.45 billion to $18.65 billion, straddling Wall Street's target of $18.15 billion in revenue. Furthermore, AMZN warned that its fourth-quarter bottom line could range from an operating loss of $200 million to a profit of $250 million. At last check, AMZN is set to open with a 12.4% drop.

Elsewhere, Panera Bread (PNRA - 115.72) reported a third-quarter profit of $28.8 million, or 97 cents per share, up 27% from $22.8 million, or 75 cents per share, in the year-ago period. Meanwhile, revenue climbed 22% to $453.1 million, from $371.99 million in the previous year. Analysts, on average, were expecting a profit of 94 cents per share on revenue of $446.97 million. The company said it now expects fourth-quarter earnings per share to hit between $1.39 and $1.41, fiscal 2011 earnings per share to range from $4.63 to $4.65, and fiscal 2012 earnings per share to dock in the $5.38 to $5.48 ballpark. For comparison, analysts are expecting a fourth-quarter profit of $1.37 per share, 2011 earnings of $4.58 per share, and 2012 earnings of $5.29 per share. In pre-market trading, PNRA is headed for a 10.3% lead.

Finally, Human Genome Sciences (HGSI - 12.73) reported a third-quarter loss of $88.4 million, or 45 cents per share, compared to last year's loss of $40.9 million, or 22 cents per share. Revenue fell 33% on a year-over-year basis to $34 million. Analysts, meanwhile, were expecting a slimmer loss of 39 cents per share on revenue of $37 million. HGSI attributed the year-over-year revenue decline to $36.1 million in upfront and milestone payments on the now-defunct hepatitis C treatment, Zalbin, which were booked in the year-ago quarter. HGSI also admitted to softer-than-anticipated sales of its lupus drug, Benlysta, which totaled $18.8 million - just shy of Wall Street's forecast of about $20 million. At last look, HGSI is bracing for a 14.4% drop out of the gate.

Earnings Preview

Today's earnings docket will also feature reports from Boeing ( BA ), Aflac ( AFL ), Akamai Technologies (AKAM), Agnico-Eagle Mines (AEM), ConocoPhillips (COP), Dr. Pepper Snapple Group (DPS), Brinker International (EAT), Exelon (EXC), General Dynamics (GD), Corning (GLW), Goldcorp (GG), JetBlue Airways (JBLU), Lockheed Martin (LMT), Logitech International (LOGI), Novellus Systems (NVLS), NASDAQ OMX Group (NDAQ), O'Reilly Automotive (ORLY), Sprint Nextel (S), Tupperware Brands (TUP), WellPoint (WLP), and Visa Inc. (V). Keep your browser at for more news as it breaks.

Economic Calendar

The Census Bureau is slated to unveil its latest figures on new home sales and durable goods, while the Energy Information Administration (EIA) will release its regularly scheduled report on crude stockpiles. Thursday will bring us the latest gross domestic product (GDP) estimates, as well as the weekly jobless data from the Labor Department. The economic agenda will wrap up on Friday with the personal income and spending figures for September, the government's third-quarter employment cost index, and the final Thomson Reuters/University of Michigan consumer sentiment index for October.

Market Statistics

Equity option activity on the Chicago Board Options Exchange (CBOE) saw 881,882 call contracts traded on Tuesday, compared to 681,255 put contracts. The resultant single-session put/call ratio arrived at 0.77, while the 21-day moving average was 0.69.

NYSE and Nasdaq summary

Volatility indices

Overseas Trading

Most Asian markets ended higher today, despite significant uncertainty regarding the outcome of an EU summit. Chinese Premier Wen Jiabao helped stocks climb out of the basement, after he said the government "should make timely and appropriate fine-tuning and preemptive adjustments to maintain reasonable growth in overall credit." The comments were interpreted by many to suggest that Chinese policymakers may ease the throttle on their tightening regime, potentially cushioning the "hard landing" that market-watchers have feared for the key emerging market. By the close, China's Shanghai Composite rose 0.7%, Hong Kong's Hang Seng climbed 0.5%, South Korea's Kospi tacked on 0.3%, and Japan's Nikkei diverged from the pack by dropping 0.2%.

The major European benchmarks are just north of breakeven at midday, as traders seem cautiously optimistic that significant progress will be made on the euro-zone debt crisis. Heads of state from the 27 EU countries are scheduled to meet today in Brussels, as are the leaders of the 17 euro-zone nations. Among the issues on the table are the proposed recapitalization of European banks, the leveraging of the bailout fund, and potentially hefty Greek debt writedowns. As traders await the outcome of these critical meetings, London's FTSE 100 is up 0.1%, while the German DAX and French CAC 40 have each gained 0.4%.

Overseas markets

Currencies and Commodities

The greenback is relatively flat this morning, with the U.S. dollar index fractionally lower at last look. Crude futures, meanwhile, are extending their quest for multi-month highs, with the front-month contract up 0.3% to flirt with $93.45 per barrel. Finally, gold futures have also continued yesterday's journey into the black, with the precious metal last seen 0.7% higher at $1,712.60 an ounce.

Currencies and commodities

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This article appears in: Investing , Options
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