Opening View: DJIA Set for Triple-Digit Start as Bulls Applaud EU Deal

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After at least two summits and much speculation, European Union ( EU ) leaders finally announced a plan for the fiscally beleaguered euro zone. Under the terms of the deal -- which calls for the recapitalization of a slew of European banks -- private investors will take a 50% write-down on their holdings of Greek bonds, and the European Financial Stability Facility (EFSF) will be upped to roughly $1.4 trillion. Plus, according to the latest reports, French President Nicolas Sarkozy and Klaus Regling, head of the aforementioned rescue fund, will call on China to drum up financial support from the nation. Against this backdrop -- and ahead of the latest gross domestic product ( GDP ) estimates from Uncle Sam -- the bulls have breathed a collective sigh of relief, with the Dow Jones Industrial Average (DJIA) on pace to open with a triple-digit lead.

Dow, S&P and Nasdaq futures

In earnings news, Procter & Gamble (PG - 64.95) reported fiscal first-quarter earnings of $3.02 billion, or $1.03 per share -- down 1.9% from the year-ago quarter, but in line with Wall Street's expectations. Net sales, meanwhile, rose 8.9% to $21.9 billion, just topping analysts' predictions for revenue of $21.53 billion. For the current quarter, PG forecast per-share earnings of $1.05 to $1.11 on sales growth of 3% to 6%. Analysts, on average, are calling for a healthier profit of $1.16 per share on sales growth of 6%. For the year, the blue chip maintained its per-share profit predictions, but said it now expects net sales growth of just 3% to 6%, compared to its previous projections for 5% to 9% growth. Nevertheless, the shares of PG are pointed 1% higher ahead of the bell.


Elsewhere, Visa (V - 92.02) said its fiscal fourth-quarter profit increased 14% to $880 million, or $1.27 per share, from $774 million, or $1.06 per share, in the year-ago period. Meanwhile, revenue jumped 12.6% to $2.38 billion. The credit card company's results were slightly better than anticipated, as Wall Street projected a profit of $1.25 per share on revenue of $2.39 billion. For fiscal 2012, V reiterated its expectations for net revenue growth in the high-single-digit to low-double-digit range. The San Francisco, Calif.-based business also hiked its quarterly dividend by 47%, and raised its share buyback program up to $1.6 billion. At last check, V is down 0.7%.

Akamai Technologies (AKAM - 23.78) reported a third-quarter profit of $42.3 million, or 23 cents per share, up 6.5% from $39.7 million, or 21 cents per share, in the year-ago period. Normalized net income was unchanged at 34 cents per share. Meanwhile, revenue increased 11% to $281.9 million, from $253.6 million in the year prior. Analysts, on average, were expecting a profit of 33 cents per share on revenue of $278.9 million. Looking ahead, AKAM forecast adjusted fourth-quarter earnings of 37 cents to 41 cents per share on sales of $303 million to $315 million. For comparison, Wall Street is calling for a current-quarter profit of 39 cents per share on revenue of $310.5 million. In pre-market trading, AKAM is poised to pop 12.7%.

Finally, Equifax (EFX - 33.84) reported a third-quarter profit of $66.7 million, or 54 cents per share, representing a drop from last year's profit of $76.5 million, or 61 cents per share. The company is citing acquisition-related expenses into new markets for its decline in earnings. Excluding items, profit rose to 65 cents per share from 60 cents per share. Revenue, meanwhile, increased 3.5% to $490.4 million. The results were slightly better than forecast, as Wall Street was anticipating a third-quarter profit of 64 cents per share on sales of $487.2 million. Looking ahead, the company is expecting fourth-quarter earnings to range from 65 cents to 68 cents per share. For comparison, analysts were projecting adjusted earnings of 66 cents per share.

Earnings Preview

Today's earnings docket will also feature reports from Exxon Mobil ( XOM ), Barrick Gold ( ABX ), Advanced Micro Devices ( AMD ), Aetna (AET), AstraZeneca (AZN), Baidu (BIDU), Bristol-Myers Squibb (BMY), Coca-Cola Enterprises (CCE), Coinstar (CSTR), Colgate-Palmolive (CL), Deckers Outdoor (DECK), Dow Chemical (DOW), Electronic Arts (ERTS), Expedia (EXPE), Elan Corp. (ELN), Goodrich (GR), Hercules Offshore (HERO), Hershey (HSY), International Paper (IP), Johnson Controls (JCI), Legg Mason (LM), Royal Caribbean Cruises (RCL), US Airways Group (LCC), Altria Group (MO), OfficeMax (OMX), P.F. Chang's China Bistro (PFCB), PulteGroup (PHM), Potash Corp. of Saskatchewan (POT), QLogic (QLGC), Time Warner Cable (TWC), and United Continental Holdings (UAL). Keep your browser at SchaeffersResearch.com for more news as it breaks.

Economic Calendar

Today brings us the latest 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 979,200 call contracts traded on Wednesday, compared to 692,415 put contracts. The resultant single-session put/call ratio arrived at 0.71, while the 21-day moving average was 0.70.

NYSE and Nasdaq summary

Volatility indices

Overseas Trading

Asian markets rallied today, after EU leaders reached an accord on a critical debt deal. Meanwhile, the Bank of Japan upped its bond-buying efforts, with policymakers keeping one eye trained on the surging yen. Thanks to these developments, along with well-received earnings reports from China Citic Bank and Agricultural Bank of China, financial stocks spearheaded the day's advance. Tech issues were a weak spot in Korea, after Hynix Semiconductor confessed to a third-quarter loss -- but strength in economically sensitive stocks, such as steelmakers, helped pull the market to a positive finish. By the close, Hong Kong's Hang Seng rallied 3.3%, Japan's Nikkei rose 2%, South Korea's Kospi added 1.5%, and China's Shanghai Composite gained 0.3%. Indian markets, meanwhile, were closed for holiday.

Stocks in Europe are solidly higher at midday, boosted by enthusiasm over the newly announced debt deal. EU officials agreed to a 50% haircut on Greek bonds, as well as a substantial increase to the size of the EFSF. While some of the details of the plan have yet to be finalized, traders definitely seem pleased with the progress made at Wednesday's summit. At last check, the French CAC 40 is up 5.6%, the German DAX has jumped 5%, and London's FTSE 100 is 2.9% higher.

Overseas markets

Currencies and Commodities

The greenback istrading lower this morning, with the U.S. dollar index down 0.8% at last check. Crude futures, meanwhile, have bounced back from yesterday's supplies-related drop, with the front-month contract up $2.21, or 2.5%, at $92.41 per barrel. Gold futures, on the other hand, are on pace to snap their winning streak, with the yellow metal last seen $2.30, or 0.1%, lower at $1,721.20 an ounce.

Currencies and commodities

Unusual Put and Call Activity:

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This article appears in: Investing , Options

Referenced Stocks: ABX , AMD , EU , GDP , XOM

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