U.S. stocks are set to erase
Tuesday's modest gains
, as the fiscal crisis in Europe once again takes center stage.
Most notably, concerns about contagion are weighing on Wall Street
ahead of the bell, after the Bank of England warned that the U.K.
is on the verge of economic contraction due to the broader
euro-zone debt drama, and after Bank of Japan Governor Masaaki
Shirakawa said Europe's issues have been felt as far as Japan.
Further reflecting those fears were the yields of even triple-A
government bonds, with notes from France, Austria, and the
Netherlands rising in tandem with
Italian and Spanish bonds
. On the home front, meanwhile, investors are digesting the latest
earnings from Dell (
) and Target (
), the latter of which kicked off a session peppered with quarterly
reports from the retail sector. Against this backdrop, the Dow
Jones Industrial Average (DJIA) could find itself testing the
waters in the 12,000 region, while the S&P 500 Index (SPX) is
bracing for an 11-point dip out of the gate.
In earnings news, Dell (DELL - 15.63) said its third-quarter
profit grew 8.6% to $893 million, or 49 cents per share, from $822
million, or 42 cents per share, in the same period last year.
Excluding items, earnings increased to 54 cents from 45 cents per
share. Revenue was essentially flat at $15.37 billion. The
Texas-based tech company's results were mixed, as Wall Street
predicted adjusted earnings of 47 cents per share on $15.65 billion
in revenue. For fiscal 2012, DELL believes its revenue will arrive
at the lower end of its growth forecast of 1% to 5%, thanks to an
industry-wide hard-drive shortage. At last check, DELL is headed
Meanwhile, Target (TGT - 53.18) reported third-quarter earnings
of $555 million, or 82 cents per share, up from the $535 million,
or 74 cents per share, earned a year ago. Excluding items, the
retailer logged a per-share profit of 87 cents. Total revenue for
the quarter jumped 3.7% to $16.4 billion. Analysts, on average,
were projecting third-quarter earnings of 74 cents per share on
revenue of $16.28 billion. Looking forward, TGT forecast adjusted
fourth-quarter earnings of $1.43 to $1.53 per share, encompassing
Wall Street's consensus estimate for current-quarter earnings of
$1.47 per share. In pre-market trading, TGT is pointed 2.5%
Elsewhere, Agilent Technologies (A - 38.25) reported a fiscal
fourth-quarter profit of $289 million, or 82 cents per share, down
1% from $292 million, or 83 cents per share, in the year-ago
period. Excluding items, A earned 84 cents per share, up from 65
cents per share in the previous year. Meanwhile, revenue rose by
9.6% to $1.73 billion. Analysts, on average, were expecting an
adjusted profit of 81 cents per share on revenue of $1.75 billion.
Looking ahead, the company is predicting an adjusted fiscal
first-quarter profit of 67 cents to 69 cents per share, with
revenue ranging between $1.65 billion and $1.67 billion. Analysts
are expecting a first-quarter profit of 70 cents per share on
revenue of $1.65 billion. For fiscal 2012, A is forecasting
earnings of $3.00 to $3.35 per share, excluding items, on revenue
of $6.85 billion to $7.15 billion, which is roughly in line with
the consensus estimate for a profit of $3.14 per share on revenue
of $6.97 billion. At last look, A is bracing for a 2% drop.
Finally, Bob Evans Farms, Inc. (BOBE - 33.70) reported fiscal
second-quarter earnings after the bell sounded last night. BOBE
recorded a profit of $12.7 million, or 42 cents per share, up 64%
from last year's profit of $7.8 million, or 26 cents per share.
Excluding items, earnings arrived at $23.4 million, or 47 cents per
share. Revenue, on the other hand, decreased 2.4% to $407.2
million. The results fell well below analyst expectations for a
per-share profit of 53 cents on sales of $411.5 million. In spite
of a revenue dip and continued cost and sales challenges, BOBE
maintained its fiscal 2012 outlook for a profit of $2.36 to $2.44
Today's earnings docket will also feature reports from
Abercrombie & Fitch (
), Applied Materials (
), Hot Topic (
), NetApp (NTAP), NetEase.com (NTES), PetSmart (PETM), and Tyco
International (TYC). Keep your browser at
for more news as it breaks.
The consumer price index (CPI), core CPI, and NAHB housing
market index are on today's docket, as well as the latest stats on
industrial production and capacity utilization. Thursday brings us
the regularly scheduled weekly report on jobless claims, the
Philadelphia Fed manufacturing index, and housing starts. The
economic calendar concludes on Friday with the Conference Board's
index of leading indicators.
Equity option activity on the Chicago Board Options Exchange
(CBOE) saw 876,327 call contracts traded on Tuesday, compared to
617,732 put contracts. The resultant single-session put/call ratio
arrived at 0.70, while the 21-day moving average was 0.69.
Stocks in Asia slipped today, pressured by pervasive fears about
Europe's sovereign debt crisis. With bond yields on the rise in
Italy, Spain, and even France, banking issues helped lead the
regional decline -- particularly after the International Monetary
Fund (IMF) warned of potential systemic risks within China's
financial system. Meanwhile, the yen continued to gain ground
against the downtrodden euro, which kept major Japanese exporters,
such as Sony, firmly in the red. By the close, China's Shanghai
Composite fell 2.5%, Hong Kong's Hang Seng dropped 2%, South
Korea's Kospi gave up 1.6%, and Japan's Nikkei lost 0.9%.
The major European indexes are mixed at midday, after Bank of
England Governor Mervyn King and European Commission President Jose
Manuel Barroso both offered some gloomy commentary regarding the
dire debt situation. However, cooling euro-zone yields have helped
equities climb out of the basement, with traders hopeful that the
European Central Bank (ECB) is scooping up bonds. At last check,
the French CAC 40 is up 0.1%, London's FTSE 100 has shed 0.7%, and
the German DAX is off 0.9%.
Currencies and Commodities
The greenback is on the rise this morning, with the U.S. dollar
up 0.4%. On the other hand, crude futures have pulled back from
multi-month highs, with the front-month contract down 0.4% at
$99.04 per barrel. Finally, gold futures are also in the red, with
the malleable metal last seen 0.3% lower at $1,777.60 an ounce.
Unusual Put and Call Activity:
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